With 5 Year Trading -220 bps Special In Repo, 5 Year Drops Sub-1% Following Record Auction

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Wed, 09/28/2011 - 13:22 | 1718887 Sudden Debt
Wed, 09/28/2011 - 13:32 | 1718903 sqz
sqz's picture

Probably some end-of-quarter debt hedge unwind. Perhaps vs CDS, swaps and corps where 5-yr and 10-yr points are common.

Nothing to see really. Need this kind of blow-out reflected closer to the short end to be interesting, especially since that's where the Fed is supposedly targetting.

Wed, 09/28/2011 - 13:33 | 1718926 redpill
redpill's picture

PMs just took another dump.  Anyone know why?

Wed, 09/28/2011 - 13:56 | 1719031 Going Loco
Going Loco's picture

Liquidity. Credit Crunch re-run. Complete and totally devastating worldwide shortage of cash.

Me, I don't even hold bonds any more. I have gone for the ultimate in short-term paper: banknotes in safe deposit boxes.

Thank goodnes I saw this coming (thanks Tylers, I mean THANK YOU Tylers). Donation coming.

Wed, 09/28/2011 - 14:33 | 1719176 Byte Me
Byte Me's picture

Second that.

Cash in a deposit box. But shortly to be withdrawn for safer domestic redoubts prior to any 'Bank Holiday' nonsense.

Wed, 09/28/2011 - 14:16 | 1719113 Boston
Boston's picture

Platinum $100 below gold.  I just bought platinum.

Wed, 09/28/2011 - 13:33 | 1718927 SheepDog-One
SheepDog-One's picture

LOL every FED bond targeted action has been a total fail.

Wed, 09/28/2011 - 13:46 | 1718990 Pegasus Muse
Pegasus Muse's picture

Brought a tear SD.  Good song.

Wed, 09/28/2011 - 13:24 | 1718891 Village Smithy
Village Smithy's picture

Isn't this the opposite of what happened this morning with the German 5 year ? 

Wed, 09/28/2011 - 13:29 | 1718910 disabledvet
disabledvet's picture

Yes. And is there a difference between "very bad" and "other"?

Wed, 09/28/2011 - 13:29 | 1718911 GeneMarchbanks
GeneMarchbanks's picture

Are you suggesting correlation? Short bunds long bonds, eh?

Wed, 09/28/2011 - 13:24 | 1718892 SheepDog-One
SheepDog-One's picture

People with 'smart money' now rushing to park it at guaranteed negative return? This is about to get real shitty. No one with BIG money would be doing this if they knew some bailout was right around the corner, and they all do know whats coming. 

Can I please park $1 billion with you if your guarantee me back $990 million in a few years? Sick.

Wed, 09/28/2011 - 13:39 | 1718956 LawsofPhysics
LawsofPhysics's picture

Hey SD, in a hyperdeflationary world this is still better than "Hey can I give you a billion now to collect a few thousand in a few years - sicker.

Wed, 09/28/2011 - 13:48 | 1719000 SheepDog-One
SheepDog-One's picture

Yea no doubt!

Wed, 09/28/2011 - 13:25 | 1718894 gojam
gojam's picture

Nevermind, everything will look completely different in 5 year's time. You'll see. ;-)

Wed, 09/28/2011 - 13:25 | 1718897 SheepDog-One
SheepDog-One's picture

No doubt in 5 years everything will look very different. Ever seen the movie 'The Road'? Or 'The Road Warrior'?

Wed, 09/28/2011 - 13:28 | 1718902 Village Smithy
Village Smithy's picture

As Shakespeare said " first, we eat all the bankers".

Wed, 09/28/2011 - 13:53 | 1718950 fuu
fuu's picture

Then we kill all the lawyers?

So hard to work on a full stomach though. We should do the lawyers first then snack on the bankers.

Wed, 09/28/2011 - 13:28 | 1718907 gojam
gojam's picture

We'll all be driving hover cars.

Wed, 09/28/2011 - 13:31 | 1718919 SheepDog-One
SheepDog-One's picture

Hover carts?

Wed, 09/28/2011 - 13:36 | 1718936 Smiddywesson
Smiddywesson's picture

Pulling carts.  We will have eaten the horses.

Who say's there won't be jobs?  Start your own business:  "Bring out yer dead!"

Thu, 09/29/2011 - 00:35 | 1720879 FlyPaper
FlyPaper's picture

Obama will be a dictator?

Wed, 09/28/2011 - 13:25 | 1718895 InconvenientCou...
InconvenientCounterParty's picture

Nobody covers shadow banking like ZH.


Wed, 09/28/2011 - 13:26 | 1718896 potatomafia
potatomafia's picture


We expect ongoing such risk transfer from shadow into sovereign debt: a development which as we discussed previously is very bad.

Its not "very bad", instead it is just "less good".

Wed, 09/28/2011 - 13:26 | 1718898 centerline
centerline's picture

Money starting to run scared. Not a good sign at all. Doesn't seem like an avalanche so far. But could be the beginning of a larger move.

Wed, 09/28/2011 - 14:43 | 1719228 Dapper Dan
Dapper Dan's picture

Run where? pray tell

is it lean hogs?


Finally, I'll leave you with a quote from Dr. Ricky Rood's climate change blog, in his recent post,Changing the Conversation: Extreme Weather and Climate: "Given that greenhouse gases are well known to hold energy close to the Earth, those who deny a human-caused impact on weather need to pose a viable mechanism of how the Earth can hold in more energy and the weather not be changed. Think about it."

Wed, 09/28/2011 - 16:34 | 1719603 Larry Darrell
Larry Darrell's picture

In response to your "climate change" quote.

Who gives a fuck?

Not me.

They told us we needed to close the hole in the ozone -- legislation as the solution ahahhaha.  Well, now the southern ice caps are melting multiple times faster than they were, because all the solar energy that reflected off the ice and snow harmlessly back into space is now trapped.  So they bitch about global warming, and then pass certain legislation which speeds up the process.


But there is zero controlling of the planet's atmosphere, and anyone attempting to do so is a COMPLETE FUCKING IDIOT

I'm not saying we go out of our way to trash the planet, but some people's meddling is counterproductive.

Wed, 09/28/2011 - 17:02 | 1719736 Hugh_Jorgan
Hugh_Jorgan's picture

The climate changes, it always has it always will. You are either a sucker or a shill. Either way, go spew your "end justifies the means" sycophantic, eco-drivel someplace else.

Wed, 09/28/2011 - 13:29 | 1718909 kaiserhoff
kaiserhoff's picture

He who panics first...

Wed, 09/28/2011 - 13:30 | 1718918 Tsar Pointless
Tsar Pointless's picture

...poops his pants first.

Wed, 09/28/2011 - 13:30 | 1718916 RobotTrader
RobotTrader's picture

More proof that "Paper" reigns supreme over "Hard Assets"

Wed, 09/28/2011 - 13:31 | 1718923 SheepDog-One
SheepDog-One's picture

Only in your fucked brain.

Wed, 09/28/2011 - 13:32 | 1718924 potatomafia
potatomafia's picture

or are we reaching the final blowoff of one of the greatest bubbles?

Wed, 09/28/2011 - 13:41 | 1718964 fdisk
fdisk's picture

You mean what? GOLD or Silver?

Wed, 09/28/2011 - 13:58 | 1719036 potatomafia
potatomafia's picture


Wed, 09/28/2011 - 14:15 | 1719088 LawsofPhysics
LawsofPhysics's picture

But the whole point here is that someone is buying, not selling.  right?  So this is the peak before the drop then.  Sort of like; "look, your bond investments are doing real well and ... its gone..."


Is this what you are saying?

Wed, 09/28/2011 - 16:42 | 1719625 Going Loco
Going Loco's picture

I don't know whether you are paid to say what you say or whether you are just stupid but if you are going to make a remark like 'More proof that "Paper" reigns supreme over "Hard Assets"' you simply must qualify it by the additional statement 'for now, and for a brief interval hence' or somesuch. We are now inside Jonathan Ruffer's "moment of deflationary fear" and when we have experienced this phase his "inflation of currency compromise" will make PMs the safe haven. Anyone reading you would think you were saying that paper presently reigns supreme over hard assets and will always do so, which is addled claptrap. I have sold my gold and have placed banknotes in safe deposit boxes but this is just a trade, the time is coming when a switch back will be needed. Nobody would ever detect that vital piece of good advice from your asinine dictum.


Wed, 09/28/2011 - 13:34 | 1718932 Sudden Debt
Sudden Debt's picture



today was forecast and budget meeting with sales.

We have a very optimistic owner who wants 30% growth next year.

there where 14 sales managers in the room and at one point I though they where starting a lynch mob.

they all realized that we're heading into a mayor crisis and as our sales depends for 40% of their salary on bonusses on sales, they just knew they are heading for a very louzy year next year.

We came out, and every SM told me this: We're going to advice all our reps to look for other jobs as fast as possible. And they where going to do the same.

A real moral booster. Next year will be christmass every day......


Wed, 09/28/2011 - 13:52 | 1719013 kaiserhoff
kaiserhoff's picture

But SD, you said just the other day you'd be happy selling hot dogs in the street.  Anyway, everyone is rich in Belgium thanks to the Euro..., oh wait.

Wed, 09/28/2011 - 14:41 | 1719215 wang (not verified)
wang's picture

whining sandbaggers


Wed, 09/28/2011 - 13:35 | 1718934 brodskan
brodskan's picture

By Stone Mountain, do you mean Stone & McCarthy Research Associates?

Wed, 09/28/2011 - 13:37 | 1718940 Vergeltung
Vergeltung's picture

this is the lind of post I need a little more "common man" language to understand it. steep learning curve with this stuff.  :)


Wed, 09/28/2011 - 13:38 | 1718946 pauhana
pauhana's picture

"By the pricking of my thumbs, something wicked this way comes."  Second witch, Macbeth, Act 4, Scene 1.

Wed, 09/28/2011 - 14:26 | 1719149 Poetic injustice
Poetic injustice's picture

Thumbs up for Macbeth.

Wed, 09/28/2011 - 13:44 | 1718978 fdisk
fdisk's picture

Freeport-McMoRan Copper & Gold Inc. (FCX)

Got 3% yield now.

Wed, 09/28/2011 - 14:06 | 1719066 rajc
rajc's picture

does this mean mortgagae rates will go lower?

sorry i am confused as bloomberg said no it won t go lower but fed said it will.....?????!!!!!

Wed, 09/28/2011 - 14:38 | 1719198 RobotTrader
RobotTrader's picture

Nucor and Conoco Phillips now paying over 4% yield, with huge, long dividend track records, but nobody wants them, they would rather lap up more U.S. Treasuries paying nothing.

Wed, 09/28/2011 - 15:19 | 1719351 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Good idea, but if you wait I'll bet you can get over 6%!  I'm waiting for XOM to yield 5%.  

Wed, 09/28/2011 - 15:27 | 1719393 delivered
delivered's picture

RT. Generally don't reply to most posts but I would have to agree with your statements. I've been in CP for years given the solid yield, strong PE, and to use somewhat as a commodity hedge (with oil). Also, I always felt CP would be a good acquisition target for a global player. Duke (DUK) is also in this boat on the yield front (with a 5% yield). Share the same sentiment in relation to how one can buy 5 yr USTs yielding 1% and continue to not only support but basically encourage Washington to keep spending (as if someone offers me 1% money, if would be hard to turn down).

One thing to remember is that the healthiest companies with the strongest balance sheets and earnings may become even more aggressive with stock buybacks as if alternative investments (for their use of cash) are not present, the best choice may be to repurchase shares (which Mr. Buffett just did). With record levels of cash sitting in large corporations around the globe, and assuming the "tax implications" can be managed associated with this cash, I'm wondering if either directly or indirectly (i.e., nudged/pushed by TPTB), that this cash may be put into play in some fashion. Just a thought but with the financial industry/institutions a mess (and needing to recapitalize with fresh cash to cover losses everyone knows are coming), the capital flow the global economy is so dependent on may have to actually come from non financials (via stock buybacks, acquisitions, capital investments, increased dividends, etc.). Let's face it, TPTB are not going to be able to keep their hands off this cash too much longer.

Wed, 09/28/2011 - 14:40 | 1719211 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Market is clearly signaling deflation.  CPI will go negative by January (if not sooner).

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