• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

GDP 'Good News' Sparks Bond Buying & Stock Selling, Treasury Curve Crumbles Further

Tyler Durden's picture


US GDP beat expectations 'proving' that government data shows the recovery meme is on track (as long as it doesn't snow ever again). The market's reaction... intriguing - stocks shrugged even as a USDJPY pump tried to get things going; gold and silver moved modestly higher; and Treasury yields... fell notably at the long end. 30Y is now trading with a 3.06% handle and 5s30s is back below 145bps...!

Bonds are rallying on the GDP beat...


The yield curve continues to collapse...


And stocks are shrugging..


Chjarts: Bloomberg

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Thu, 08/28/2014 - 09:02 | 5153285 digitlman
digitlman's picture

Chjarts are the bestest!

Thu, 08/28/2014 - 09:10 | 5153306 GetZeeGold
GetZeeGold's picture



It's cool cause you can make them show almost anything.


When the statues of limitations run out.....remind me to tell you a funny story.

Thu, 08/28/2014 - 09:22 | 5153344 Headbanger
Headbanger's picture

Tha tha tha tha tha...  THAT'S ALL FOLK'S!


Thu, 08/28/2014 - 09:36 | 5153388 Xibalba
Xibalba's picture

Always amused to see charts of rigged markets. 

Thu, 08/28/2014 - 09:40 | 5153402 Doubleguns
Doubleguns's picture

Like showing off counterfeit art. 

Thu, 08/28/2014 - 11:05 | 5153812 WarHorse
WarHorse's picture

Oh look.  We're starting to rally.  HOw does this work again ... Bad news = mkt higher,  Good news = mkt higher .... I'm just happy we aren't in a bubble

Thu, 08/28/2014 - 09:06 | 5153287 buzzsaw99
buzzsaw99's picture

the 30y calls bullshit on the entire recovery meme. this would be a good time for the fed to unload some of the crap mbs on their books since things are so great. /s

Thu, 08/28/2014 - 09:03 | 5153290 RattNRoll
RattNRoll's picture

Gold got a woody this morning!

Thu, 08/28/2014 - 09:08 | 5153304 Bossman1967
Bossman1967's picture

give it a minute and we see headlines stocks pump gold dumps on this killer recovery. common Putin show Obama what a real set looks like

Thu, 08/28/2014 - 09:10 | 5153310 GetZeeGold
GetZeeGold's picture



I'll give you 60 seconds.....and no more.

Thu, 08/28/2014 - 09:04 | 5153292 Dr. Engali
Dr. Engali's picture

Oooopppps, that's not supposed to happen.

Thu, 08/28/2014 - 11:04 | 5153804 29.5 hours
29.5 hours's picture



Another thing not supposed to be happening, the dollar giving a Galt shrug...the NYTimes printing an opinion against the dollar as reserve currency.

Dethrone ‘King Dollar’
Thu, 08/28/2014 - 09:06 | 5153297 Devotional
Devotional's picture

any dip in the stock market is always bought. 

October 2014 stock market peak? 


Thu, 08/28/2014 - 09:05 | 5153298 taketheredpill
taketheredpill's picture



Once upon a time the Yield Curve led the Economy.


Now the Economy is leading the Yield Curve.



Thu, 08/28/2014 - 09:08 | 5153305 dontgoforit
dontgoforit's picture

Inevitable results of inscrutable actions.

Thu, 08/28/2014 - 09:10 | 5153309 himaroid
himaroid's picture

Massive tbond short capitulation coming soon.

Thu, 08/28/2014 - 09:28 | 5153324 LawsofPhysics
LawsofPhysics's picture

Many have been saying this since the mid 90's.  Good luck with that.  We might get haircuts and "bail-ins" but no one will be allowed to profit from those moves.

Thu, 08/28/2014 - 09:11 | 5153312 Seasmoke
Seasmoke's picture

It seems they are truly trapped, with no more ways out.

Thu, 08/28/2014 - 09:13 | 5153316 monopoly
monopoly's picture

I don't know about you guys but this constant melt up in bonds really has me concerned. There is no reason why so many are moving into the safety of bonds and treasuries. So, there must be a reason and we will probably get some insight next week after the holiday. These yields are absurd and yet they keep going lower and lower. There is a big black hole out there somewhere, I just cannot see it......yet.

Thu, 08/28/2014 - 09:14 | 5153323 LawsofPhysics
LawsofPhysics's picture

There is a reason, specifically, the liabilities on the balance sheet of those governments, period.

Now shut the fuck up and pass the cheese...

Thu, 08/28/2014 - 09:13 | 5153317 LawsofPhysics
LawsofPhysics's picture

...because "rates are going up"...



Thu, 08/28/2014 - 09:15 | 5153331 GetZeeGold
GetZeeGold's picture



Heh heh......good one!

Thu, 08/28/2014 - 09:26 | 5153350 buzzsaw99
buzzsaw99's picture


Thu, 08/28/2014 - 09:15 | 5153325 madbraz
madbraz's picture

You should show that 5s30s chart since 1970 to give some perspective of where it should be.

Thu, 08/28/2014 - 09:28 | 5153358 tarsubil
tarsubil's picture

That's what I'd like.

Thu, 08/28/2014 - 09:15 | 5153330 NoDebt
NoDebt's picture

You guys better be buying 30 year TSYs before 3% is refferred to as "high yield" in a few years.

Thu, 08/28/2014 - 09:26 | 5153352 LawsofPhysics
LawsofPhysics's picture

with negative rates in some areas of the western world already, 3% is in fact alread referred to as "high yeild".

especially if you have a couple billion (nothing by today's standards) earning 3%

Thu, 08/28/2014 - 09:26 | 5153353 buzzsaw99
buzzsaw99's picture

that's what many people still don't get. they think they missed the rally already.

Thu, 08/28/2014 - 09:35 | 5153383 disabledvet
disabledvet's picture

Actually most have missed the rally...well, actually moves like this are far more than just a rally. These are huge capital gains and if US rates start heading down towards German levels the returns on that debt would far outweigh anything in the equity space the last year or so.

Thu, 08/28/2014 - 09:51 | 5153434 NoDebt
NoDebt's picture

The rally in bonds started around 1982.  So, yeah, if you invest today, you proably already missed about half of it.

Thu, 08/28/2014 - 09:53 | 5153445 LawsofPhysics
LawsofPhysics's picture

I don't think I would be so bold as to predict that endpoint.  It took rome over 500 years to destroy itself. 

Thu, 08/28/2014 - 10:37 | 5153628 NoDebt
NoDebt's picture

Things move a lot faster in modern times.  I think we can accomplish that feat in well under 100.

Thu, 08/28/2014 - 13:18 | 5154566 TVP
TVP's picture

The Luciferian plan set into motion on Jekyll Island in 1913 was intended to be a century-long undoing of America.  They are already a solid eighteen months behind schedule.  

These assholes never planned on the masses waking up and screwing all of their plans eight ways to sunday.  

Keep fighting the good fight, ZH posters and readers...we are winning.

Thu, 08/28/2014 - 09:24 | 5153347 loub215
loub215's picture



Thu, 08/28/2014 - 09:32 | 5153378 Wahooo
Wahooo's picture

Not even close.

See here

Thu, 08/28/2014 - 09:52 | 5153436 LawsofPhysics
LawsofPhysics's picture

damn, we do have plenty of room to move...

Thu, 08/28/2014 - 09:27 | 5153355 RiskyBidness
RiskyBidness's picture

BTFD!!  Folks.........Do not think for a moment that this thing wont be bought!!

Thu, 08/28/2014 - 09:28 | 5153361 Keltner Channel Surf
Keltner Channel Surf's picture

Duke Ellington, if alive, would be forced to modify his standard:  "I Got it Bad, and That Ain't Good --- er, Or Is It?"

Thu, 08/28/2014 - 09:48 | 5153427 ejmoosa
ejmoosa's picture

Corporate profits AFTER taxes are now down 3.23% for the last four quaters ending 2nd quarter 2014.  

Whaterver magic they did to the GDP calculation, they failed to do to profits...

Businesses will not expand or continue hiring....look for the sharp adjustments after September 2014, when businesses start to put together their 2015 budgets.


Thu, 08/28/2014 - 09:51 | 5153437 Ness.
Ness.'s picture

Don't fret kiddies.  We'll be green before noon.  

Thu, 08/28/2014 - 11:05 | 5153808 SheepDog-One
SheepDog-One's picture

It's OK, it's only Thursday and S&P is only down -3 so by Friday close they'll easily prop another all time high close I'm sure, it's vital for the ongoing shitshow to keep the general population in a drugged stupor of imaginary good times.

Thu, 08/28/2014 - 11:41 | 5153942 ChanceIs
ChanceIs's picture

It's amazing how many people deny or are unaware of the correlation between the yield curve inverting and stocks collapsing. That 30 - 5 curve only goes back to '08.  Check out the "Dynamic Yield Curve" from Big Charts (I am not spamming):


It features the yield curve and S&P next to each other.  You start it playing (animate) and from '00 to today you can see the slope and what the S&P is doing.  See it go negative (slopewise) in late '00.  Oooooops.  What happened then?  Got petrock.com?  Then see it getting negative in late '06.  Danger! Danger Will Robinson!!!!

But '06 was eons ago in Wall Street time and the cocaine addled brains of the new grads coming in to fill the ranks.  Hey!!!  It's different this time.  One of those pukes said back it '00 - 'We have moved beyond interest rates.'

But a caveat.  The Bernanke and Yellen have so distorted things that even the yield curve might have lost its potency as a forecaster.  That if nothing else indicates the INSANITY of QE.

Memo to Ben/Janet:  Corporate managers need price signals to know when and where to invest.  How does what you are doing fit in with full employment and stable prices?  Do you interact with old people who can't get squat on their CDs anymore?  Are you going to invite them in to sleep on your floor when their stocks collapse?  No?  I didn't think so.  Now go crawl back into your holes and try not to make things any worse.

PS:  I never bought into that Keynesian meme that the Fed had any control over employment.  Thought it was BS from the day I first became acquainted with it.

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