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Treasury Yields Are Crashing (Again)
US Treasury yields are plunging again this morning. From 4Y maturities out, yields are around 10bps lower with 30Y under 2.30%, 10Y under 1.65%, 7% under 1.5%, and 3Y under 75bps!! Since QE3 ended, 30Y bond yields are 84bps lower, 2Y 3bps lower.
This week things have escalated...
And since the end of QE3, the curve has collapsed...
It's just a good job consumer sentiment is at 11 year highs or one might suspect we are heading into recession/depression
Charts: Bloomberg
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JUST BUY THE FUCKING DIP
Gold seems to be doing well after yesterday's slam down. Apparently the money from the ECB to naked short gold hasn't leaked over to the US in large quantities yet.
because when you and i dont pay our bills on time, the cost of borrowing money goes up. but.... when the gov does it, it just gets cheaper!! WTF
Their introductory rate of zero percent lasts forever.
And they elude to raising rates in June... And oh how they larfed...
I don't think that the Fed really knows what it is doing anymore. It might very well raise rates in June, then start whining when "it never could have seen this coming."
Rate increases coming in June...
Really...
Even Bullard sez so...
I mean it...
Don't laugh, it's gonna happen...
Seriously...
You just wait...
The Fed isn't kidding...
This time is different...
Increased rates are just around the corner...
Count on it...
Just you wait......
Pretty much every single choice that the Fed has boils down to this: They must kill the dollar to save it. In other words, they have no good options. You can say "but they won't raise raits because of government debt," but if they don't raise rates, we eventually get hyperinflation and a bunch of other things get broken in the meantime. Anything that they do will eventually be fatal, and by eventually, I mean the dollar's jig is up during our lifetimes. To say that they will or won't do something because it doesn't make sense ignores the fact that there is nothing that they can do that makes sense anymore. They are truly fucked. They can do QE4 and NIRP, and that's another step towards a complete loss of confidence in the monetary system, and they're fucked. They can do nothing, wait for things to unwind, and when the slack is finally out of the system, we're right back to 2008, and they're fucked. They can raise rates and cause a wave of defaults, crushing the banks, and they're fucked. No matter what they do, they're fucked, and any of those options could happen.
Just remember, they don't always include debt in their models.
7% under 1.5 %
I'm missing one hell of an arb opportunity there.
Serves me right for going out to lunch.
~"They must kill the dollar to save it."~
And...
~"No matter what they do, they're fucked..."~
You got that right, cowboy. In case any of you missed it, Kieth Wiener's article on the Swiss Franc is a forerunner to what is going to happen to Treasuries and hence the USD.
http://www.zerohedge.com/news/2015-01-28/swiss-franc-will-collapse
A big can of whoopass coming to a town, coming to all towns near you.
And you thought gold bonds was a powder!
It's happening!
http://i0.kym-cdn.com/photos/images/facebook/000/242/631/382.gif
Did the Treasury miss some coupon payments?..
Dude, if "yields are crashing" that means the bond price is "rising".
So, that should be JUST BUY THE FUCKING RIP!!! -- fixed.
Called it.
https://www.twitter.com/Intellikon/status/555370308031377410
Still calling it.
All that hyperinflation..
inb4 my grocery prices are rising.
The shadow of the crisis has passed to be replaced by another shadow much larger and darker than the previous one.
Precisely why the monetary records are so important. There will be serious refunds or retribution. Either way, the good news is all that paper will flood out into the real economy...
...oh wait.
Precisely why the monetary records are so important.
It is a damn shame they will vanish somehow without any backup. However, the amount we owe to the IRS will be engraved in stone in some form of a time capsule.
Well, good luck collecting. We are all Greek now.
At some point shorting T's will lead to financial utopia. But when..... Damned if I know.
Even that may not be so. By the time that happens, it may very well be that you win in nominal terms, but get flogged, raped, and burned at the stake in real terms.
Correct
and the only people in the whole world not surprised in the least are zh readers
You have nailed this call since I was only lurking around these parts.
He certainly has. I never thought this shit was even possible 4 or 5 years ago but they killed the bond vigilantes and anyone short of the market.
+1 for buzz...
~$2.5 trillion in excess reserves + "quality" collateral shortage due to it all being on the fucking Fed's balance sheet + flight to "safety" anytime BTFDing even remotely fails means that UST yields will be suppressed big time until this is all done unwinding. I don't see why people don't get this. When the Fed announced the taper was the time to go long USTs, and I would have back then were it not for the fact that I wouldn't gamble in these "markets" with your money.
Next up: a re-test of the 2012 lows (~1.4%). If that doesn't hold, then 1.25% comes into play, and of course, if that breaks, then 1.0% could be next.
I would have gone long on USTs when the taper was announced, and I would be thinking about exiting within the next month or two had I actually done that. I expect that it won't break for at least 6 months, but without either a) a significant rise in oil prices or b) a priori intervention by the Fed or some other oligarch tool, this shit is going to come unwound very slowly at first, then all of a sudden. When the all of a sudden part hits, if you aren't one of the first out the door, you are fucked. How good is your timing?
The other thing is that by getting out now, you have an opportunity to convert those FRNs to something tangible that you hold yourself. You don't want to try that when shit is hitting the fan. You want to do it in the near future. Gold, lead, farm land, tools, whatever.
I think you're right.....just early, as in 10+ years early. Think Japan.
Japan is a historical outlier. They also had a manufacturing economy that produced stuff for the world. We have about 7 years if everything is done pulled off flawlessly, which it will not be.
a close on 10yr below 1.67% becomes new support.
No measureable, technical resistance below. Look for next stop to be 1.35 in yield, if 167 is breached. if not, then we're heading back to 177 / 183 in yield
NoVa
Technical analysis..what a bunch of garbage. All those guys short treasuries use TA. Easy pickings
Wait ! ... What ?? ... they told me to buy stawks ... the bond bull market was dead !!
Must.. Keep... SPX above... 2000...
they are going to fail. stocks are on the edge of a HUGE drop. very likely gains traction later today and escalates next week. view last week of july, 2011 to see whats coming.....
yeah back in july 11 it was "fiscal cliff" now its just cliff
Pristine credit
But, but, what about the GDP...and, and consumer CONfidence?
Well things are really improving up for the consumer: lower gasoline prices and now, lower home mortgages!!! This is why there is so much confidence and it's only going to get better.
current rate = 3.82%. even with the 10Y < 1% mortgage relief will be modest. there will be no recovery.
Agreed.
3.81% 0/0 30yr fixed is too high relative to 10yr UST index (which is the bench mark rate for mortgages).
3.25% 0/0 should be the rate. Lenders are holding onto higher margins to catch some windfall profitability.
Whoever homeowners can Refi already have or is doing so now. With future LOWER rates, it is incrementally harder for homeowners to qualify for refi. a 3% 30yr fixed will be great for home purchases, but refis just won't be there like in the old days.
NoVa
Oil and treasury yields say the eCONomy is booming. Better have an emergency rate hike.
Yes, because nothing makes more sense than to raise rates while at the same time loading up on MBS's eehm (QE)..
http://www.federalreserve.gov/releases/h41/current/
Business for me has picked up so far this year. Reason...I am cutting prices to pick up new accounts. Just give me lower fucking prices and I will listen is the mantra. Sign of a robust economy if I have ever heard one.
Sounds like fun, Doc. Let's do it!
how come you get up voted for sarcasm and I get down voted?
Probably because people didn't snap that your post was sarcastic.
Me, for example. Some of us are slower. But I got it now. :-)
I like the little :^) faces for sarasm.
GLTB
we are a mere 22 bps on the 10Y from making history bitchez
Look at 7Y. a weatherglass. Think housing and auto loans, {ARP}
housing and mortgage firms use the 10yr as a guide, not 7 or shorter. Actually, GSE MBS prices and coupons are most used.
NoVa
High $US ripping the heart of the last vestiges of manufacturing. Falling currencies making US denominated debt unpayable. Rates need to drop not rise to kick the can a little further down the road.
In a properly functioning market yes. Unfortunately, that does not exist.
Sorry but I don't see how giving bankers and financiers even more FREE MONEY (QE and ZIRP) will help anyone but banker and financiers.
This is soo bullish.
Now THAT's sarcasm. :-) :-) :-) Right?
And today's stock levitation from the bottom begins anew....
Denmark going a bit farther.
http://www.centralbanknews.info/2015/01/denmark-suspends-bond-issuance-t...
Hey ZHers; why don't we ask the Fed itself what the escape plan actually IS ? They must have a real plan. Bernanke said that the Fed would save us from 1930's depression but what is their plan now ?? One or more you writers ( Tyler Durdens ) should start a petition to just ask the Fed for a guide on how to save things.