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Treasury Yields Near 2014 Lows As S&P Hits Record Highs
Today's dislocated markets are brought to by the number 4,398,201,000,000 and the word "Yellen"...
Chart: Bloomberg
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Price fixing fucks the fixer in the ass ....eventually.
RIPS
So does the math work like this?
Step 1: The Federal Reserve creates roughly $3.5 trillion out of thin air ($4.3 - ($800 billion before the crisis).
Step 2: Fed takes said $3.5 trillion and buys bank's bad assets (e.g. mortgages) and exchanges them for Treasuries.
Step 3: Bank can use treasuries as collateral to purchase/lend whatever?
I will become a Keynesian when they can make bond prices rise alongside rising bond yields. That is when we know the oceans have turned to lemonade.
No that's wrong. The Fed swaps treasuries and MBS for bank reserves which cannot leave the banking system unless converted to physical cash.
Banks now have the newly created reserves as an asset and a deposit as a liability. The newly created deposit is an asset to the party (e.g. pension fund) that sold its treasury/MBS to the bank.
All explained here: http://www.bankofengland.co.uk/publications/documents/quarterlybulletin/...
Nice link, thanks.
All that inflation... oh wiat.
The Big Short will be back again! Be patient traders!!
The "BIG" short is in the equity markets..... Bond yields just reflect to truth to this economic scam.
If you like selling em here @1980 you are going to love selling em in a couple years @4000.
How many times do I have to say it?? This is minor inflationary noise that I can take care of with a bunch of macroprudential scientific steps within 15 minutes. Said Yellen.
Admiral Ackbar knows what is up with the S&P 500.
"It's a TRAP!"
"It's a TARP!"
Fixed for ya!
It just occurred to me that a tarp, in real life at least, is something used to cover up something else. Pretty appropriate now that I think of it.
You just now realized why they called it the troubled asset relief program? You didn't realize that was intentional?
Duplicity
the 30yr has firm support at 0
if you give the government money for 30 years with eventually no coupon... is that considered a Tax? Just wondering..
or is it only a tax when the loving government converts your IRA into them?
Good question. I think if you are a bank, and you use the treasury you purchase as collateral for 30 years, and you lend 10X the amount to customers, and your trading desk leverages the collateral 100x for 30 years, and the government agrees to bail you out if you should ever lose money, then it is not so much a tax as it is a token price to pay to keep up appearances that the US Treasury and the banks are not running a racket, pure and simple.
If the Government charges you 18 percent interest on your back taxes is that usury?
Back in the late 70s/early 80s, when treasuries were paying double digit yields, people in the investment business referred to them as "instruments of financial confiscation" (I'm not joking, they did). At the time it looked like inflation would continue to go nowhere but up and eat those things alive. Why not? Nixon had closed the gold window only a few short years before and it looked like the old Dollarino was headed for an inflationary spiral/devaluation. None of the "experts" would advise people to buy Treasuries.
And then something happened.
If it breaks zero to the downside I will start pissing while doing handstands.
Same place the dollar has firm support at too on a long enough timeline.
oil and gold tripled over the past dozen years but the cpi stays at 2.1% always. lulz
Because households cosume a basket of goods only comprised of oil and gold. Isn't that what CPI is? Just oil and gold???
capitalist? what a funny name. like bigfoot, the mythical yeti.
I will be eventually shorting TLT.
and i will be handing your ass to you
As the saying goes: like trying to pick up supermodels in front of a steamroller.
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Bully for you AccreditedEYE,
Finally someone who understands the action. One more thing though, the algorithm's are programmed a day in advance. Then, a "classifeid memo" is sent to those in the inner circle, at days end for tomorrow's action.
Futures and option action in "after and pre market" tell the story...Explains the NO VOLUME ramps during trading hours.
Bubbliicious!
This flavor I'm pretty sure:
http://lululuber.files.wordpress.com/2011/01/paradise-punch.jpg
(link opens in new window/tab)
Golem xiv has an interesting post ( http://www.golemxiv.co.uk/2014/07/small-thoughts-go/ ) today. One of his main points is that financial markets no longer measure economic fundamentals, they track political ones. Stock markets are measuring the "grip of the global overclass on the levers of politcal control," not the health of the economy. Since the markets are now managed to PREVENT true price discovery, stocks and bonds can both rally, utterly divorced from economic fundamentals.
There was a article on here yesterday from another site, saying roughly the same thing. It's all about the top 10% "management class" now; and how well they manage the economy to enrich themselves.
So when their hands slip off the Levers. What Happens ?
wait don't they call that a Dead man's Switch... :)
Hey Buzz.....did not mean tomorrow or next month. But it will be a great short!!
You will never make any substantial money shorting this market. You must understand that when the rug is pulled or a few insiders will be able to capitalize. For the rest of us proles the shorting of stocks will be outlawed.
When this thing comes apart it's going to be E P I C!
Why did stocks, especially small caps, correct smartly in the time it took for Tyler to post this? Well, the answer is . . . the nearly $6 BILLION in collective QE$s over today and tomorrow, which I believe is the largest two-day candy machine in months, that had goosed stocks this morning, wore off. As no one wants to open new longs given events, primary dealers are being bribed by our Fed to tickle shorts, cuz that’s where the most money is presently (they own too much to tank it just yet). So, shorts before 11 aren’t advisable when POMO > $2B, but quick post-POMO crashes are common (I just covered a noon Russell short, missing the ride up). With the RUT at its HRLY 20-MA, machines are no doubt battling to bounce strongly, let's see what they've got under the hood.
Thats 4,300,000 Million Dollars...
Insanity Rules!!
Today and tomorrow are large POMOs. Once that's over we may see a reversion to yields.
Treasuries are not edible, neither can they be used to fuel a car.
Triple Lehman will be manually triggered, sooner or later, otherwise world dumps USD and goes barter as it is slowly occurring
How did your shoes taste?
Yellen is a banksters best friend.
yellen is a bankster - and has no interest in benefiting anyone other than a fellow bankster
yellen could care less about jobs and the economy - its modus operandi is to juice the banks and juice the markets
Dow 200,000
Bread $50
Gallon of Gas $400
Gold - still stuck at $1,300
When the whole thing comes crashing down, don't ask me why
Who is buying treasuries? Seriously...
If I were Goldman, and able to get a billion at whatever the fuck - free... and get a 2% return, which isn't even beating inflation, even for honest Keynsians, I'm still essentially getting paid to accept free money... there's really no relative risk at all.
but if you're some guy making 100k, why go treasuries instead of some money markets/cds, or I dunno... something else? In other words - who, who doesn't have access to the discount window, is buying these fucking things these days. I'm really asking - not even sure how to google this clusterfuck of a question to you fine folks of Das Hedge...
Well, i could sell BUNDS and buy Treasuries, resulting in a fucking bulshit non risk profit.
At least, that`s what market is thinking.
What is curious is that if everything colapses (And i`m not talking about european geopolitical crisis, i`m talking about equities) everyone will start pushing yields down. So, at the same time people are buying equities they are seeking for a so called safe guard assets, commonly knowned as Treasuries...
So, there is only one way yields could follow regarding an early hike (and if that occurs, it would be awesome from a buyer perspective), up and above.
I`m just kiding, just wanna se things blowing up.
And even if they notice, they just do not give a shit. Up we go, beyond words. The twilight zone.