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"Good" Housing News Spark Stock/Bond Selling, USD Surge
It appears 'great' housing data is bad news for stocks. In what can only be seen as the rate-hikes-are-coming trade, as soon as the starts and permits data hit, the USDollar rally accelerated, bond yields spiked, and stocks tumbled... why oh why can't we get some more poor data...
EURUSD retumbled... (USD index is now up 2.25% since Friday's close)
Charts: Bloomberg
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What I said
Rate hike dead ahead now
Oh the bad news will be out in a few weeks about all the real estate contract cancellations.
Just lit a Swisher Sweet with a $5 bill, bitchez!
I just burned up a $5 joint taking a one hitter.
We shall see Headbanger. I still stand by my conviction that the Fed stooges cannot and will not raise rates.....Maybe test the waters with .25 basis points which is nothing, watch the stock market do a swan dive and promptly reverse course.
Agreed monopoly.
DavidC
Keep in mind as the economy worsens, the ass hats in DC will be out in force with their pitchforks hunting for witches to blame
Demands to audit the Feral Reserve will increase dramatically
So the Fed is under pressure now to reduce its balance sheet
Which itself amounts to a rate hike.
Demands will be ignored, Fed hard line action will continue, restlessness continues as patience with the mkt boils over and crashes threaten the Feds survival, everyday gets a little worse until, surprise, time to end the Fed and teach the congress critters how to do their own taxes, isn't the suspense just killin ya?
Fed will probably tinker with Excess Reserves interest payments or raise the Fed Funds rate range to 0 to 50 bps from 0 to 25.
Folks - this simply impacts the daily rate or the shortest duration & has nothing to do with durations of 7 years and out to 30.
Reral Estate will not crash nor will mortgage lending activity. If anything, a rise in ST rates will likely flatten the yield curve. The 2 - 10yr settled at 1.67% yesterday. A rise in rates will push that spread down by the amount of the increase.
But lately the longer duration Treasuries have trade very closely with the Bund.
NoVa
Cool.
But me thinks the """market"" may become moar alarmed by the fact that the Feral Reserve is even raising rates now.
It'll be scary for equities.
The failed Fed experiment can not raise rates, it was proved a while back.
Sure, 0.25% rate hike, then QE4 launched.
Retirees to celebrate with a can of beans and a 12 oz. Olympia beer.
let me take a wild guess, PM's are getting donkey punched?
Let me be clear. The "official" price of PMs is heading to zero. Unfortunately, you will not be able to take delivery at any price.
There is not, nor has there ever been an eCONomic, fiscal, monetary, or political solution to scarcity. A few people will have access to the resources to maintain a high standard of living, most will not.
same as it ever was.
June rate hike announced this week. Watch.
Yep, they need to raise now so they can lower them later.
In a fiat world, perception is everything. Unfortunately, while the universe is infinite, the biosphere is not.
tick tock motherfuckers...
perception is everything
exactly........thats all they got, no way the US will let EUR get away with a big up day without making chase.
sell in may lolololol........not in central bank land
raise rates to .50 so they think have ammo
^^^this, maybe, and it will still fail. Faith, and the political "middle", is being lost.
if they raise the ff rate to 0.50% so much money would come flooding into money markets it wouldn't even be funny. yield starved bank and credit union deposits would come en masse to suckle off yellen's, (ugh, had to go there) shriveled hairy breasts.
Wasn't there talk in D.C. about a new tax on money market flows? Shit, you might be on to something buzzsaw.
i remember the bernank complaining bitterly about those money markets. when they got scared he had to help with liquidity or else break the buck. when he raised the ffr to 5.25% everyone and their dog was flocking into them lapping it up. i know i was.
Yes, so was I. The conclusion that I keep coming to is that the world is about to re-learn what things like real work, real capital, real collateral, and real VALUE are.
Far too many god damn over compensated useless middlemen between the producer and consumer in the real economy.
loose lending fixed housing, YAY!
Hem. It's housing bubble 2.0. Raise them rates, Housing bubble 2.0 malfunctions. I think even the Fed knows they created a bubble, they just don't want to admit it. Janet Yellen steers clear of saying there is a bubble and even denies there is a bubble instead opting for soft words like "potentially valued on the high side", or something to that effect.
Banks just shit themselves knowing they have positions that need dumped. There is no doubt in my mind that the person hitting every ask is K-Hen. The next bailout will be to bailout the FRB from all the worthless equities they own in bankrupt companies. Don't worry, they'll sell it to the taxpayers at $1.20 : $1
QE/ZIRP unintended consequences. Good is bad; bad is good. Ridiculous it is.
Never mind the rate hike. Who in the fuck is buying new homes?
College students have got their fill of using loans to buy Ishit. Now switching to real estate. Should be bullish unless they get a job and are expected to pay back.
10Y T is dangerously close to losing its support since 2007.
Mama Yellen's going with shock and awe at 100 bps.
Stocks TUMBLED? PLEASE. S&P is down $2.18
Enough already
When good data is bad and bad data is good you know things are totally screwed up.
In light of all the talk about rate hikes, it would be prudent to keep in mind that the Fed is not about to allow a 'cascading effect' to take place in the market as a result of their actions either to raise rates, or to wait until the house-of-cards collapses as a result of waiting too long before putting a '$floor' under the market with continued 'open market' operations, should a 5% correction quickly unfold into a 10%, 15%, 25%, etc., correction and a new economic 'trend' thus begin. No...
Recovery Summer VI