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"That's Not Supposed To Happen" - Yield Curve Slumps To Flattest In 9 Months
The Fed hiked... and the Treasury market threw up all over it, flattening the curve over 10bps in the last 16 hours (to 9 month lows). The reaction screams "policy error" as rate cut odds for January remain above rate-hike odds. Financials - who will benefit greatly from this rate hike if all the talking heads are to be believed - appears not to have got the flattening curve joke yet.
Not exactly an overwhelming vote of confidence!!!
Smashing 2s30s back below 200bps to 9-month lows...
Financials remain bid (just like they were in August...)
It's different this time.
Charts: Bloomberg
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it doesn't make sense. :snark:
Edit: The reaction screams endless "policy errors"
It makes perfect sense. Once again Tyler doesn't know wtf he's talking about. Is this the same Tyler who said "the Fed can't tighten?" Or a different one? Is this the same Tyler who said the dollar was going to go in the tank? Or a different Tyler?
My recommendation would be to just stop writing because it just makes you look like a dumb ass.
I find the info useful, in a Gartman sort of way. Speaking of which, has he been stopped out of his equity long yet? Its about time for him to short the snot out of the market and the $ so they can tear higher. Maybe he'll go long gold too.
dude. ok, its only $100B not the 'up to $700B - however this is only the first repo - more may come
Anyway, even $100B less liquidity leaves one to wonder about the leverage on the $1Q derivatives - this drains all the liquidity needed to pay 0.1% of possible derivatives triggered (and i think a good $500T of them are interest rate related)
" Oh we are laughing "
https://media.giphy.com/media/vWDrezW0rMjmM/giphy.gif
LOL!! Called by the many on the hedge. Yes, those spreads are not sustainable, but any means...
definitely going to be a merry X-mas around here...
janet is going to shoot her eye out with that red ryder bb gun
I want to see her shoot that toupee off her head
Just don't say anything about her merkin.
https://en.wikipedia.org/wiki/Merkin
The Brutal War Troll does not need a bb gun to destroy
Meanwhile, it's after 11:30 ET. Europe is now closed. On queue, US equities are now ascending "off the lows".
Maria, I beat you to it!
Yes of course, everyone is piling back in stocks! laughable how courrpt thiis is.
The only part of the Federal Reserve plan working is the Gold and Silver markets getting crushed. Hope the economy tanks ( already has) and the people finally realize these jackoffs have no idea what the hell they are doing.
I just accidentally bought some more physical silver. Well, it was no accident. If they insist on pounding the PMs, and they do, then you have to buy. I may not be done for the day. I might need to go feed my little hoarding OCD issues. I think I need more gold.
One day we shall reassess banking practices.
Maybe I'm just a big dummy but seems like some peeps are tossing the USD in the garbage because "the trade is so crowded". What I am seeing is that USD did NOT fall back inside that bullish triangle/wedge consolidation pattern it was in since March and instead may have just executed a healthy pullback. Furthermore, for the FA people the mechanics alone on the differential between NIRP in euroland and the FFR now along with the unwinding of 9T+ in USD based carry trades and incineration of USD deonomiated "assets" globally is shall we say some potent ammunition. oh, and that whole Yuan deval thing as well. If the charts show me the USD is broken then I'll gladly concede that. Still looks to me like a grind up to 108ish and 120ish over the next handful of months.
It is about need to hold long treasuries, in short supply, not loss of confidence in FED, which has always been low.
Historically a bag of shit is lain on the doorstep of the next president.
Yes, this is about coaxing the dying horse the last mile to the knacker's yard.
What Fed Increase? Top Treasuries Forecaster Is Bullish for 2016
16 December 2015, by Susanne Walker Barton (Bloomberg)
http://www.bloomberg.com/news/articles/2015-12-16/what-fed-increase-top-treasuries-forecaster-is-bullish-for-2016
LeBas at Janney sees 2.22% 10-year yield at end of next year.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!