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Why Treasuries Are Selling Off

Submitted by Tyler Durden on 02/02/2015 10:24 -0400

One word - Apple. Not only is Apple single-handedly moving S&P 500 earnings, it is now - thanks to the planned issuance of $5 billion of debt to fund moar buybacks - shifting the US Treasury market as rate-locks slam yields higher in an illiquid market...

Charts: Bloomberg

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Mon, 02/02/2015 - 10:26 | 5734512 ShorTed

time to buy more TLT calls

Mon, 02/02/2015 - 10:31 | 5734530 Looney

Here’s another piece of useless news.

According to the Turkish Todays Zaman, two homemade explosives went off in the courtyard of a building located in the Çankaya neighborhood of Ankara, one a half-hour before and one 15 minutes after President Recep Tayyip Erdogan passed by the building.

Just wondering… Who’s next on the “TO DO” list? Greece’s Tsipras? Hungary’s Orban?

Exceptional, ain’t we?

Looney

http://www.todayszaman.com/latest-news_2-explosives-go-off-along-erdogan...

Mon, 02/02/2015 - 10:45 | 5734581 Payne

The tide has already turned for the US/CIA, they will continue on course but the waters that lifted all the boats is receding. Too much pain felt by US policies worldwide to continue with business as usual.

Any deviation from US plan is considered terrorism. So the plan is not to have useful discussion but to bludgeon the entire world into submission. The US does not have that kind of power anymore if it ever did.

Mon, 02/02/2015 - 10:27 | 5734515 AustrianJim

I fail to see the point of misspelling "more" all the time.

Mon, 02/02/2015 - 10:29 | 5734525 Archetype

Because "more" simply isn't enough...

Mon, 02/02/2015 - 10:58 | 5734620 11b40

Too much is never enough!

Mon, 02/02/2015 - 10:28 | 5734528 ShorTed

Apologies, will try to be moar diligent next time.

Mon, 02/02/2015 - 10:34 | 5734545 Tinky

If you have to aks...

Mon, 02/02/2015 - 10:36 | 5734547 NotApplicable

Well, 13.6M hits could rectify your failure.

https://www.google.com/search?q=moar

Mon, 02/02/2015 - 10:55 | 5734616 Bangalore Torpedo

Andrea True Connection ~ Moar, Moar, Moar

https://www.youtube.com/watch?v=JpDqExNfKsM

Moar, moar, moar
How do you like it?

Moar, moar, moar
How do you like it?....

Mon, 02/02/2015 - 10:29 | 5734522 wmbz

Thank god for Foxx Conn and it's well paid slave labor! Hopefully Apple gets their way and they replace most workers with robots. Then the stawk price can really soar!

APPL is the only stawk anyone needs to own!

Mon, 02/02/2015 - 10:28 | 5734526 all-priced-in

From 2.25% all the way up to 2.28%

How will the bond market survive.

Mon, 02/02/2015 - 10:38 | 5734551 Philo Beddoe

Once Obama reveals the budget details...spend spend spend spend. The Yields will tank. How the fuck are we going to pay for all this shit? Oh yeah, at zero.

When you are going to spend 4,000,000,000,000 for fiscal 2016 it is best to shop around for the best rates. Zero should do the trick.

Mon, 02/02/2015 - 10:41 | 5734563 LawsofPhysics

LOL!! Yes, and if zero is good negative rates must be even better!!!

But I digress, bond "market", LOL!!

Mon, 02/02/2015 - 10:42 | 5734575 Philo Beddoe

“We believe this budget shows how we can implement the president’s vision…while also continuing progress on restoring fiscal discipline,” a senior administration official said.

Somebody actually said this. I repeat...somebody actually said this.

http://www.wsj.com/articles/obama-to-detail-nearly-4-trillion-budget-for...

Mon, 02/02/2015 - 10:48 | 5734593 LawsofPhysics

Still those are some mighty optimistic projections on future tax revenue.

Mon, 02/02/2015 - 10:52 | 5734604 Philo Beddoe

When the glass if half full it is best to cut off the top half of the glass. The glass is full I tell yah!

Mon, 02/02/2015 - 10:51 | 5734606 BurningFuld

That's about as stupid as calling a pass play at the one yard line with three downs left.

Mon, 02/02/2015 - 11:08 | 5734659 Philo Beddoe

The smartest guys in the room like small rooms with very people.

Mon, 02/02/2015 - 10:38 | 5734559 oudinot

How will the bond market survive?

Mon, 02/02/2015 - 10:44 | 5734582 JRobby

Survival? (laugh track deafening)

When has a bubble been deflated without economic fallout?

Mon, 02/02/2015 - 10:48 | 5734589 Pool Shark

Indeed.

The 30-Year Treasury yield is almost back to where it was last Thursday.

The horror!...

Mon, 02/02/2015 - 10:30 | 5734527 eclectic syncretist

I thought Apple had a monster shitload of cash beyond anything previously imaginable? Why would they want to take out loans then?

Mon, 02/02/2015 - 10:33 | 5734543 Buckaroo Banzai

The cash is overseas, if you bring it back, it gets taxed.

Sell bonds in US, that's how you can effectively repatriate cash, at a cost of say 3%, instead of paying tax on it at say 30%.

Mon, 02/02/2015 - 11:42 | 5734788 estebanDido

Traitors, worst than terrorists. Bring the guillo or 100 pounds of rope.

Mon, 02/02/2015 - 10:32 | 5734529 tostaky06

USA debt negociation in march ... or the winter come back ...

Mon, 02/02/2015 - 10:30 | 5734535 highly debtful

The way things are going, Apple soon will be the US economy.

Mon, 02/02/2015 - 10:40 | 5734550 ejmoosa

Mon, 02/02/2015 - 11:41 | 5734778 Raymond K Hessel

Seriously the best post on this thread.

Bravo.

Mon, 02/02/2015 - 10:39 | 5734558 ejmoosa

And if you think about how much student loan debt is being used to buy AAPL products, the circle is complete.

I was naive enough to think college loans were for education.

Now they are used for anything that you can spend your money on while getting an education.

Mon, 02/02/2015 - 11:40 | 5734783 Raymond K Hessel

Youre a fucking genius. Also, did you read today's WSJ article on Amazon's push into colleges? You might be on to something.

Mon, 02/02/2015 - 10:32 | 5734537 q99x2

Apple owns the government. Huh.

Mon, 02/02/2015 - 10:32 | 5734538 tarsubil

So Apple has $168 bil in cash, sells bonds to buy its own stock? Sorry, it appears I've gone cross-eyed.

Mon, 02/02/2015 - 10:38 | 5734553 TheSecondLaw

See comment above - cash pile is offshore. Bring it back it will be taxed. Whereas bonds cost 3%.

Mon, 02/02/2015 - 10:43 | 5734554 Dr. Engali

It's away around paying taxes for repatriating capital. Once they issue the debt for virtually nothing they can service it with foreign held reserves.

Mon, 02/02/2015 - 11:44 | 5734797 Raymond K Hessel

Wasn't this the plot in Lethal Weapon 2?

Okay, okay, okay, okay, this is the best part okay? You make a tax deduction on interest payments you don't even make! Am I an innovator? Am I a genius?

Mon, 02/02/2015 - 10:41 | 5734572 JRobby

"Not only is Apple single-handedly moving S&P 500 earnings, it is now - thanks to the planned issuance of $5 billion of debt to fund moar buybacks - shifting the US Treasury market as rate-locks slam yields higher in an illiquid market..."

Price discovery can't happen in this planned environment. Gyrations!

Mon, 02/02/2015 - 10:49 | 5734597 Mike in GA

I don't understand this. How is a $5 billion private company bond issue affecting the Treasury market? What are "rate-locks"

Mon, 02/02/2015 - 12:17 | 5734945 Silver Short Seller

Google it next time! http://www.bmocm.com/products/marketrisk/intrderiv/treasury/

Mon, 02/02/2015 - 12:21 | 5734985 mattgallis

Apple's $5b bond issuing is not impacting the treasury market.

Rate-locks, aka derivative hedges, are not affecting the treasury market either. ZH's 3rd string must be online today.

Mon, 02/02/2015 - 12:21 | 5734986 mattgallis

Double post

Mon, 02/02/2015 - 10:47 | 5734591 buzzsaw99

Brawndo – The Thirst Mutilator – had come to replace water virtually everywhere. Water, the basic component of all life, had been deemed a threat to Brawndo’s profit margin. The solution came during the budget crisis of 2330, when the Brawndo Corporation simply bought the FDA and the FCC enabling them to say, do, and sell anything they wanted... [/Idiocracy]

Mon, 02/02/2015 - 11:09 | 5734662 11b40

2330? WTF, the Koch Bros have been trying that for for years, and they don't have much fruther to go.

http://www.nationalmemo.com/5-anti-science-congressmen-on-the-house-scie...

http://www.theguardian.com/us-news/2015/jan/12/republican-senator-ted-cr...

http://motherboard.vice.com/blog/congress-s-science-committee-doesn-t-ge...

Mon, 02/02/2015 - 10:50 | 5734601 firstdivision