30Y Treasury Yield Breaks Below 3.00% - Retraces "Greece Is Fixed" Sell-Off

It appears the "Greece is fixed" exuberant reach for risk is over. 30Y Treasury yields had soared 30bps in 3 days after a disastrous "Greek deal" was announced, has rallied all the way back and now trades back below the crucial 3.00% level...

2s30s is flattening dramatically...

This is the best streak of gains for the long-bond in 4 months.

Charts: Bloomberg

Comments

[KnuckleDragger-X]

Orwell would be proud......

[JustObserving]

To all those idioys rushing into the "safety" of US bonds know this: US bonds will crash - not sure when:

Fed says inflation in USA was 0.8% in 2014.  Chapwood Index says it was 9.7%.  So what are the consequences?

Let's use a Zero Coupon Bond Calculator to see the effect of fake inflation on a $1000 bond  for 30 years:

A zero coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity

With Fed's 0.8% fake inflation, Zero Coupon Bond Value = $787.38

With Chapwood inflation of 9.7%, Zero Coupon Bond Value = $62.20

So with Fed's inflation assumption, you can borrow $787.38 for 30 years and pay $212.62 as interest

With Chapwood inflation, you borrow $62.20 for 30 years and pay $937.80 as interest

With Chapwood Index, if you borrow $787.38 for 30 years, you pay $11,871 as interest.  Or 55.83 times  that with the Fed's inflation  adjustment.

http://www.chapwoodindex.com/

Kotlikoff says forget U.S. Treasury bonds.  “I think they are one of the riskiest securities in the world because interest rates are likely to go up.  I think the Fed is going to have to keep printing money because Congress isn’t paying our bills, and that’s going to lead to inflation eventually.  So, I think long term Treasuries are extremely risky, and they can drop 5%, 10% or 20% overnight.

http://usawatchdog.com/financial-system-will-collapse-just-a-matter-of-w...

[Boston]

To all those idioys rushing into the "safety" of US bonds know this: US bonds will crash - not sure when

Hmmmm, I heard the same thing about the JGB market......almost 20 years ago.

[Iam_Silverman]

"To all those idioys"

Hmmm, a new portmanteau for idiot and goy?

I like it.  Has it been copyrighted yet?

[Gambit]

like "Whore + Idiot" = whorediot 

-Malorie Archer

[LawsofPhysics]

"To all those idioys rushing into any paper/bullshit investment" -- Fixed it for you.

Where you gonna run to motherfucker?  FYI, government paper that is held to term does not lose any principle or interest (assuming it bears positive interest).  Yes, real inflation will eat your shit, but so long as the government stands you will still get the promised interest and the principle back in fiat with less purchasing power.

So yes, while losing against inflation sucks, losing 100% is still much worse.   Love the "idioy" term.  Time for some affirmative action at the Fed.

[malek]

So you mean government paper is almost as good as gold?

[Dr. Engali]

I don not understand why people can't comprehend the lessons of Japan. As long as there is a printing press valuations and markets mean nothing.

[CrimsonAvenger]

Isn't the lesson that you have to have something to devalue against (ie the USD)? What happens when there are no other fiats to devalue against, do they devalue against PMs?

[Prober]

you will be long dead and turned to worm shit while the US treasuries are still paying interest

[Lokking4AnEdge]

US T.Bond futures are tracing a head and shoulders bottom, neckline around 154.10......

Just an observation......

[Kaiser Sousa]

Dow launch initiated...

enjoy the green shoots......