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Bullard Again Urges Bondholders To Sell, Stop Fighting The Fed

Tyler Durden's picture




 

Two months ago, Fed's Bullard went full hawktard and implicitly told bondholders to "sell, sell, sell." As we explained here, there was a hidden motive for his demands - the bond market was breaking bad. So, perhaps it is not a total surprise that on the week when Treasury "fails to deliver" break back above $1bn to 2-month highs (broken market), that Jim Bullard is back:

  • *BULLARD SAYS MARKET TRADING 'TOO DOVISHLY' COMPARED TO FOMC, TIPS REAL RATE `SHOCKINGLY LOW'
  • *BULLARD SAYS HE SEES FIRST RATE RISE AT END OF 1Q 2015

As Renaissance Macro's Neil Dutta adds, confirming Bullard's meme, while recent moves in 10Y USTs have been driven mostly by geopolitical concerns and softening global economy, "we suspect that there may be a misreading of Fed policy." Or 'the market' knows full well how this ends?

 

Bullard:

  • *BULLARD SAYS HE SEES FIRST RATE RISE AT END OF 1Q 2015
  • *BULLARD SAYS CASE FOR END-1Q RATE RISE IMPROVING AS JOBS GAIN
  • *BULLARD SAYS MARKET TRADING `TOO DOVISHLY' COMPARED TO FOMC
  • *BULLARD SAYS MARKET STABILITY AMID QE TAPER HAS BEEN SURPRISING
  • *FED'S BULLARD SAYS 10-YEAR TIPS REAL RATE `SHOCKINGLY LOW'

AndRenaissance Macro's Neil Dutta confirms The Fed's narrative...

“If you take the bond market’s message at face value for most of this year, it’s basically telling us the Fed is going to start tightening policy long before the economy heats up. This is why the short end of the curve has been selling off even as the long end has rallied”

The bond market is now fighting the Fed

“That is at odds with the Fed’s guidance. The Fed wants to see the economy heat up and the bond market is not aligned with the Fed’s views”

But the real reasons... surprise...

The Bond market broke again... (via Bloomberg)

Repo 10Y Fails to Deliver Rise to Two-Month High

 

 

10Y fails to deliver rise to $1.09b vs $55m in week ended Aug. 6, highest since June 11

 

3Y fails to deliver $689m vs $10m, highest since Dec. 11

And in another odd deja vu moment... stocks and bonds have massively diverged (just as they did last time Bullard spoke)

*  *  *

So bonds (rallying) are 'fighting the fed' and small-cap tech stocks (rallying) are 'fighting the fed' - seems like the fed communications channels are breaking...

 

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Fri, 08/15/2014 - 14:12 | 5098742 stinkhammer
stinkhammer's picture

Fuck the fed; this bullshit institution belongs on the dung heap of humanity

Fri, 08/15/2014 - 14:19 | 5098777 Divided States ...
Divided States of America's picture

Its obvious that people are misreading the signals from the Fed because these messages may be misleading on purpose OR a BULLshitting fucktARD aka BULLARD (and the rest of the FOMC monkeys) dont know what the fuck is going on themselves.

Fri, 08/15/2014 - 14:23 | 5098804 hedgeless_horseman
hedgeless_horseman's picture

 

 

When your only tool is a Heidelberg, every problem is deflationary.

Fri, 08/15/2014 - 14:49 | 5098938 Save_America1st
Save_America1st's picture

And in silver news...here's Bix Weir's latest email blast regarding the new silver fix...same shit different day (and system):

 

Ok. So it was only the first day of the JOKE of a benchmark the "London Silver Price" but already the data is trickling out.

  Thompson Reuters said

  "Volumes stood at 525,000 ounces on sell side and 325,000 ounces on the buy side"

  Huh?? 525,000 ounce on the sell side and 325,000 ounces on the buy side?

  ARE THEY KIDDING???

  The AVERAGE daily volume on the LBMA is the following:

  Net 140,000,000 ounces transferred PER DAY!!!

  Gross 420,000,000+ ounces transferred PER DAY!!!

  So that means that the "London Silver Price" is determined by 3 banks that traded 00.08% of the average daily LBMA Silver volume!!! (325,000/420,000,000)

  The latest silver con is being exposed very quickly!!

  New LBMA"Silver Price" Still Not Transparent

http://www.goldcore.com/goldcore_blog/new-lbma-silver-price-still-not-transparent


Stay tuned as the World discovers they've been had all these years!

  May the Road you choose be the Right Road

  Bix Weir www.RoadtoRoota.com

Fri, 08/15/2014 - 15:12 | 5099051 knukles
knukles's picture

If you want me to sell my bonds?
Sat what again, motherfucker?
You don't want me to buy Treasuries?
You don't own enough?

OK... I get it....

Then take them from my cold dead hands.

What the fuck is this guy talking about?
Anybody tells me not to own something like this, there's something grossly amiss.

BTW    How you 30year shorts doin' today, huh?

Fri, 08/15/2014 - 15:19 | 5099090 nope-1004
nope-1004's picture

I stopped listening to Bix Weir when he stated a few years ago that "the Fed and big banks are preparing to put Palin in office as President.  I am almost certain of this."

After that idiocy, I don't acknowledge anything Bix Weir says.

 

Fri, 08/15/2014 - 15:17 | 5099078 Stoploss
Stoploss's picture

LOOK!! A three headed Dragon!!!

Fri, 08/15/2014 - 14:25 | 5098810 Aknownymouse
Aknownymouse's picture

Remember the FED said they could start raising rates even betore QE is totally withdrawn. A rate rise in septembervwould be lots of fun

Fri, 08/15/2014 - 15:20 | 5099092 Bossman1967
Bossman1967's picture

You stole my first thoughts so....

Fri, 08/15/2014 - 18:49 | 5100101 wisefool
wisefool's picture

That agreed, I always thought Bullard was the one stinking nerd in the whole mess worthing debating.

Fri, 08/15/2014 - 14:11 | 5098745 101 years and c...
101 years and counting's picture

Bullard just another stupid cunt.  thats right.  i said it.

Fri, 08/15/2014 - 14:14 | 5098753 Squid Viscous
Squid Viscous's picture

more like token goy in a firm run by Zionistas... kind of sad really, like Fischer and Yellen and their handlers could give a flying fuck what he thinks

Fri, 08/15/2014 - 14:27 | 5098824 TheRideNeverEnds
TheRideNeverEnds's picture

Well shit Idc someone needs to sell bonds with me I'm short from138 and these fuckers have been going up a point a day.....

Fri, 08/15/2014 - 15:12 | 5099053 Squid Viscous
Squid Viscous's picture

your back! how was the ride down from 1990? fun?

Fri, 08/15/2014 - 15:58 | 5099332 TheRideNeverEnds
TheRideNeverEnds's picture

Yea my deltas got nearly flat on the way down since I trade a book of mostly options against each other with some future for their delta efficiency and liquidity so I sold bonds against my existing short positions when we were trading around 1900 thinking the bottom was in but figuring I wouldn't cover my e-minis just yet but use short bonds to lock in some gains. .... It didn't work. ... At all

Fri, 08/15/2014 - 16:12 | 5099387 Squid Viscous
Squid Viscous's picture

wow - so in you were still leaning long (based on your posts here) yet almost fully hedged for 90 points in the face, amazing! you should change your ZH name to Houdini?

Fri, 08/15/2014 - 16:37 | 5099449 TheRideNeverEnds
TheRideNeverEnds's picture

We'll I was naked short ES from 1950 to compliment my short premium long vix against the short premium in the rest of my book which was fairly delta neural in and if itself and sold puts against them at 1920ish then bonds one to one at 1900 because in this market 4% down is drastically oversold.

Fri, 08/15/2014 - 14:11 | 5098748 digitlman
digitlman's picture

Bullard is as full of shit as the rest of them.

 

Rates will rise much sooner than 2015.

Fri, 08/15/2014 - 14:15 | 5098762 Eyeroller
Eyeroller's picture

If rates rise in 2014, then the Zombie Apocalypse of the markets will ensue.

Fri, 08/15/2014 - 14:36 | 5098861 aVileRat
aVileRat's picture

Yup. Nothing but 5%+ yield to worst will escape the sucking sound of nominal inflation against a negative real yield and no backstop (Fed can't do another 6T program). The new question will be not that Rates need to rise, but what effect will rate growth have on US Fiscal policy. And what will rate market operations do in a market where no collateral is ready to repo ?

Note, moving off the liquidity trap only works when market dealers support a rate hike. More than a few countries have found it pretty hard to get bond buyers back into the game once everyone has been forced to vacate their tenor's during a negative rate regime.

To Bill: Good job rocking the tie today.

Edit: Triple Witching day today, so expect a big pump at the end of the day. Bears be warned.

 

Fri, 08/15/2014 - 14:15 | 5098754 ebworthen
ebworthen's picture

FED = Federal Reprobates

Fri, 08/15/2014 - 14:24 | 5098763 Dr. Engali
Dr. Engali's picture

I'll sell when the ten year hits 1% and the thirty hits 2.5%, which at this rate, should be sometime in October.

Fri, 08/15/2014 - 14:40 | 5098881 disabledvet
disabledvet's picture

That's my view. Kocherlakota who's knowing "escape velocity" loonie was pretty straightforward: "no recovery that he can see." Hence "no rate rise for a very long time."

Fri, 08/15/2014 - 15:02 | 5099001 himaroid
himaroid's picture

OK, any bounce and I'm back in with y'all.

Fri, 08/15/2014 - 15:14 | 5099057 knukles
knukles's picture

I'm all in whitch'u, Doc!  :)

Fri, 08/15/2014 - 14:17 | 5098771 Gringo Viejo
Gringo Viejo's picture

More disinfo. There will be no rate rise.
The oligarchs are positioned to ride the American economy right into the ground.

Fri, 08/15/2014 - 14:20 | 5098779 vyeung
vyeung's picture

everyone knows this is total garbage right. When in the world you every raise interest rate on your own debt. Ops sorry, Fed isn't the US and for them to raise it probably is within their agenda to blow the system. Fed is an expired private bank that need to be kicked out of the US. Their frigging charter is up and not renewed. So why the fark are they still there.

Fri, 08/15/2014 - 14:34 | 5098858 Eyeroller
Eyeroller's picture

The Fed makes it possible for companies like Cisco to do stock buybacks (while laying off/firing workers).

The Fed makes it possible for 'investors' to buy the dip (sure in the knowledge that the dip will go back up).

The Fed artificially gives the illusion of stability that Obama so desperately needs.

Only when the system crashes and burns will the muppets who lost everything be out on the streets with pitchforks.

Fri, 08/15/2014 - 14:20 | 5098788 max2205
max2205's picture

Inflation announced be be ultra low till 2018... So duh!

That's what I saw today

Fri, 08/15/2014 - 14:21 | 5098793 nosoeawe
nosoeawe's picture

and what is the debt payment going to be on 5 or is it 7 or is 17 trillion?

 

dumb white haired gremlin can't raise interest rates and won't allow the market to correct

 

can't wait till the useless piece of trash croaks

Fri, 08/15/2014 - 14:22 | 5098797 SilverMoneyBags
SilverMoneyBags's picture

Shut up slaves, do as I say or else!

Fri, 08/15/2014 - 14:23 | 5098799 oudinot
oudinot's picture

If you can borrow short term at 1/4% leverage up 10 times when buying 10 years bond , if you don't think short terms will move up,ever,  its a wonderful, but risky trade.

If rates ever move up, watch the fuck out below.

Fri, 08/15/2014 - 14:27 | 5098827 LawsofPhysics
LawsofPhysics's picture

"If rates ever move up,"..  In an over-indebted country, any over-indebted country (where debt servicing and government liabilites require more debt and cannot be covered by taxes), if you allow rates to rise, you hard default.

tick tock...

Fri, 08/15/2014 - 14:45 | 5098906 disabledvet
disabledvet's picture

Spain had a very good debt to GDP ratio going into 2008.

This is a Wall Street problem not a Fed problem...huge bubbles and a simple ignorance of what happens when these bubbles burst if nothing is done. In Europe's case they actually raised rates..."hit the fuel to slam the Titanic into the iceberg" as it were.

Fri, 08/15/2014 - 14:23 | 5098800 LawsofPhysics
LawsofPhysics's picture

If people are doing what the Fed is doing, how is that "fighting" the Fed?  Those fuckers have got to be simply beside themselves with joy.  Hurray! the debt can be rolled over...

 

 

Full faith and credit...

Fri, 08/15/2014 - 14:28 | 5098805 Jack Burton
Jack Burton's picture

The reason Kiev is desperate to draw in Russia and then call on NATO to rescue them from an invasion can be seen in the below battle report from the last few days. And before someone calls it propaganda, it has been backed up by prisoner videos, three in total, and in video on scene of wrecked Ukie tanks and APCs, trucks and transport. The most telling proof are the prisoner videos. The Ukie Fascists are fat, stupid and ugly. And often middle aged! They speak about how they were captured. If you want information like thise "Liveleak" present equal access to Ukie Army and to rebel posted videos. If it ain't on video, then it didn't happen, that's how to judge claims.

This offensive on Donetsk was claimed by Kiev to be the final defeat of rebels. But the offensive is weak and failing, it is still very large and well equipped and making some gains due to that, but it is not the victory Kiev promised. Also of note, Hungary is shipping 60-80 modern battle tanks to Ukraine, the train has been recorded on video. News from Hungary says this is a sale of equipment through a third party [CIA?]. to Kiev. Also MIGS and Helicopters seem to be coming soon. All this shows third nations allied with Kiev, thus Russia has every right to aid the rebels to an unlimited degree. This war is not over, beware, it has just begun. Trade your portfolio with great care!!!

 

 

"The fascists advanced towards Ilovajsk having an overwhelming advantage in manpower, firepower and equipment. “Donbass”, “Azov”, “Shakhtersk” and “Right Sector” battalions went around the town from the North to cut off supplies to the tiny garrison in Ilovajsk.

 However, trying to surround the town, the enemy got into a trap near the villages of Zelenoye and Fedorovka, where they found nothing but death and captivity.

 "The fate of the Ilovajsk offensive was predetermined when an unidentified ambush unit of the militia attacked the village of Grabskoe. This attack cleared the village of enemy forces and cut their supply lines. As a result of the fighting near Ilovajsk, the punitive forces lost 10 tanks, 4 ICVs and 1 multiple rocket launcher “Grad”.

The battle near Ilovajsk clearly showed the complete combat incompetence of the ideologically motivated units fighting for the junta. Unlike regular armed forces, these punitive battalions consist of “Neo-Nazis” and extremists who do not have proper military training. This is the precise reason why Kiev prefers to use them mainly in attacks on unarmed population living under junta occupation, or as anti-retreat forces."

Fri, 08/15/2014 - 14:37 | 5098867 Jack Burton
Jack Burton's picture

Sorry for Off Topic, I meant to post it in the Ukraine post.

Fri, 08/15/2014 - 19:10 | 5100164 Pareto
Pareto's picture

Never tire of your posts Jack - always learn something.  Have a great weekend.

Fri, 08/15/2014 - 14:25 | 5098811 gdiamond22
gdiamond22's picture

Fully Faithless and Creditless

What did we think would happen to getting 12 people in a room to decide the economics of the entire planet?

Fri, 08/15/2014 - 14:27 | 5098821 QQQBall
QQQBall's picture

The FED incredibly didn't see GFC coming, did what they always do, printed money and the dimwits have no idea what will happen in 2014 let alone 2015 and beyond.

Fri, 08/15/2014 - 14:28 | 5098829 QQQBall
QQQBall's picture

Another imapct of FED actions since 2007-2008; the word BILLION rolls right off the tongue

Fri, 08/15/2014 - 14:31 | 5098842 Made in Occupie...
Made in Occupied America's picture

Bullard should just tell Yellen to raise Federal Funds overnight to 5% and keep it there for 5 years.  That will take care of his problem and let him buy all the bonds he wants at these prices.

Fri, 08/15/2014 - 14:31 | 5098843 Dr. Engali
Dr. Engali's picture

If hedge funds can lift markets as far as they have with the Yen carry trade, just imagine what they can do with the USD carry trade when the ten year drops to 1%.

Fri, 08/15/2014 - 14:33 | 5098853 Fuku Ben
Fuku Ben's picture

Stop fighting

Isn't that what a rapist says to the victim?

Fri, 08/15/2014 - 14:39 | 5098875 ekm1
ekm1's picture

 

 

 

BREAKING NEWS:

 

-Everybody learned the game

 

-There are no more suckers left

 

-Primary dealers must choose suckers among themselves same as with Lehman, Bear Stearns and MFGlobal

 

 

Fri, 08/15/2014 - 14:40 | 5098883 LawsofPhysics
LawsofPhysics's picture

You remain optimistic I see.

Fri, 08/15/2014 - 14:44 | 5098901 ekm1
ekm1's picture

If not, then there will be assassinations.

Bank lobby will have to pick one, otherwise military can't feed itself if USD is totally dumped due to QE and bank lobby

Fri, 08/15/2014 - 14:47 | 5098931 LawsofPhysics
LawsofPhysics's picture

Interesting.  By the way, most military folks I know are quite capable of "feeding" themselves.

Fri, 08/15/2014 - 14:54 | 5098936 ekm1
ekm1's picture

:-)

There are 900 bases in 130 countries as per one ZH article a couple of days ago.

Insane quantity of energy, food, clothing and future pensions.

If dollar trashed and abandoned, ww3 will come from unemployed US military personnel

 

http://www.zerohedge.com/news/2014-08-14/world-reserve-currencies-what-h...

 

Fri, 08/15/2014 - 14:43 | 5098878 Space Animatoltipap
Space Animatoltipap's picture

Bullard wants to be the great dictator ordering others what to do. Don't fight the FED is like Stalin demanding "follow my dictates otherwise I pulverize you."

Always funny, "democrazy", "humanism" and "the land of the free". Indeed, they are just fantasies. Better become a spiritual scientist. Hare Krishna.

Fri, 08/15/2014 - 14:51 | 5098946 buzzsaw99
buzzsaw99's picture

FUCK YOU BULLTARD

Fri, 08/15/2014 - 14:51 | 5098952 magne13
magne13's picture

I think he means QE4 that fuckin deuchbag

Fri, 08/15/2014 - 14:52 | 5098956 huggy_in_london
huggy_in_london's picture

Why would you ever sell ANY fixed income?  They are NEVER raising rates!!!!

Prove me wrong Bullard!

Fri, 08/15/2014 - 15:02 | 5099002 huggy_in_london
huggy_in_london's picture

And of course if they stopped buying bonds themselves then maybe the market would also.

It really concerns me that these guys think that they "know" where prices should be.  These fukers are the biggest risk and threat to global prosperity.  Unelected bunch of cnts.....

Get out of the way and let the market decide the price.

Fri, 08/15/2014 - 15:06 | 5099021 yogibear
yogibear's picture

The rioters should have traveled to the St Louis Fed and paid Bullard a visit.

Fri, 08/15/2014 - 15:35 | 5099183 Eyeroller
Eyeroller's picture

<--- First interest rate rise in 2014

<--- First interest rate rise after 2014

 

Fri, 08/15/2014 - 15:38 | 5099205 TrustWho
TrustWho's picture

OMG, The FED is losing control of the bond market. Bullard, do you know what this means?

Fri, 08/15/2014 - 16:06 | 5099392 buzlightening
buzlightening's picture

What? No one listening to the lying fed fuds.  Who really bedlieve the fed fuds are tapering and reducing toxic debt buys monthly.  The con con game over?  Wonder how many times the bonzi's have been rehypothecated and sold to different entites of western safe haven idiots.  Failure to deliver says the fed fuds can't even print up counterfeit bonzi's anymore to keep pace with idiots buying the soon to be worthless western debt paper.  I suppose there won't be much left for anyone to litigate when it's discovered bonzi's/DEBT sold and resold likely to 25 or more different parties thinking they had all their fiat secured in capitol guaranteed return of fiat at any yield.  Even negative yield for the Ezero.  This will be more than epic when US bonds blow chunks of criminal fraud from coast to roast.

Fri, 08/15/2014 - 16:23 | 5099492 Eyeroller
Eyeroller's picture

WHEN will this Fed shit show be over????

Fri, 08/15/2014 - 22:10 | 5100804 orangegeek
orangegeek's picture

The Fed doesn't set rates.  The bond market does.

 

http://bullandbearmash.com/about/us-prime-rate/

 

Looks like the bond market is going to teach the Fed a little lesson about who's in charge - in short, the Fed is cornered.

 

This has taken one heck of a lot longer that it should have.

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