Goldman Stopped Out Of 10 Year Treasury Short

Tyler Durden's picture


Yesterday we predicted it was imminent, and sure enough, adding insult to injury for any muppet who rode the "once in a lifetime" opportunity to buy stocks and sell bonds, Goldman just hit the stop loss on its 10 Year Treasury short, after getting stopped out in its Russell 2000 long two days prior.

Concerns over a slower pace of US and Chinese growth have compounded an escalation of tremors in the Euro area’s sovereign and banking space, with Spain this time at its epicentre. Dragged lower by the strong ‘flight-to-quality’ rally in their German counterparts, US 10-yr nominal government rates are back at 2% - a level below the central bank’s CPI inflation objective. Our tactical trade to be short 10-yr Note futures (TYM2), initiated on March 14 at 129-17 for a target of 126-00, hit last night the stop-loss at 131-16 (the position had reached a low of 127-23 on March 20). We are therefore recommending closing the position with a loss of around 2 points.


Looking ahead, we continue to forecast US bond yields heading higher. Our view is supported by our valuation work, suggesting that even on our macro forecasts calling for a modest recovery, and accounting for the Fed and BoE’s direct interventions, intermediate Treasury rates should be trading at 2.5%, led by a steepening in the real term structure (10-yr real rates are trading again close to their all-time lows of -30bp). Our measure of the global bond risk premium is now extremely depressed. Euro area tensions undoubtedly continue to represent an important headwind to our directional stance. Yesterday, however, we recommended to take profits in short positions in Spain against Italy. With the price action exhibiting all the hallmarks of a self-reinforcing pessimistic dynamic, the chances of a policy reaction have in our view increased.

It is only logical that the 10 Year can proceed to collapse now as Goldman is finally actually selling.

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Wed, 04/11/2012 - 08:53 | 2334095 slaughterer
slaughterer's picture

Goldman is simply the best at what they do.  Do not make fun of them.

Wed, 04/11/2012 - 14:31 | 2335289 PayneNita
PayneNita's picture

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Wed, 04/11/2012 - 06:53 | 2333927 VonManstein
VonManstein's picture

Astonishing, Really. How does this go on time and time again?

I mean, it’s so obvious now, how can anyone be so blind as to the squid methodology. Goldman clients really are Muppets.



Wed, 04/11/2012 - 07:24 | 2333956 ghengis86
ghengis86's picture

(the position had reached a low of 127-23 on March 20)

It was good for almost a week. I bet they were almost, almost, almost worried that their muppets would a actually make money and their prop desk wouldn't feast on empty foam carcasses. hahaha, J/K - the muppets always lose!

Wed, 04/11/2012 - 07:58 | 2334004 ndotken
ndotken's picture

More and more people clue in daily to the farce that is today's stock market ... so obviously the number of "muppets" is getting smaller and smaller ...


Pretty soon, the only people Goldman will be advising will be their own employees.

Wed, 04/11/2012 - 06:54 | 2333928 Dick Darlington
Dick Darlington's picture

Goldman, muppets, fraud, LOL! Never gets old!

Wed, 04/11/2012 - 08:28 | 2334052 BoNeSxxx
BoNeSxxx's picture

It could not have happened to a nicer sack of assholes.

Wed, 04/11/2012 - 06:57 | 2333930 ZippyBananaPants
ZippyBananaPants's picture

Goldman and Zero Hedge, friends forever!!

Wed, 04/11/2012 - 07:02 | 2333933 vmromk
vmromk's picture

Fuck Goldman and more importantly FUCK Bernanke.

Wed, 04/11/2012 - 07:04 | 2333935 j0nx
j0nx's picture

Fuckin goldman. I remember 20 years ago if you told someone you worked for goldman they were in awe of your greatness. Now if you tell them you work for goldman they just fucking laugh at your ass and wave you away like you were a fly circling a dog turd. What a mess Blankfein has made of their reputation. It boggles the mind that these guys haven't been torn down and sold for scrap yet.

Wed, 04/11/2012 - 07:18 | 2333949 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Thou shalt not take the name of the Lloyd in vain ...

Dude, these guys are connected!

Wed, 04/11/2012 - 10:50 | 2334455 ZeroPower
ZeroPower's picture

I wasnt around 20 years ago to reminisce on old times, but today it's all about the circle you're with.

Traders don't give a fuck, as its all about PnL and whatever desk gives them more of a takehome and is more flexible on risk taking and positions. If you want to trade at GS vs any other bulge or MM, its all about the money. For banking and M&A, unless youre at MS, GS is still the tops. I am not all basing this on their employees, Lloyd and his God's work, or their culture (well, lack of anyway). Deal flow is all about the contacts you know, and their M&A teams are typically around 1st or 2nd place on the league tables. League tables are all that count.

However, going to occasional 5 to 7s and blurting out you work at GS these days doesn't get you more than an "I want your $$" stare from one of the ladies working the lobby.

Wed, 04/11/2012 - 07:06 | 2333938 cheesewizz
cheesewizz's picture

"Oh man, If I just waited one more day"

Wed, 04/11/2012 - 07:07 | 2333940 The Greater Ponzi
The Greater Ponzi's picture

'an escalation of tremors' - Irony much?

Wed, 04/11/2012 - 07:11 | 2333944 LongSoupLine
LongSoupLine's picture

All I see is a completely manufactured premarket ramp going on. These assholes are extremely desperate. Not falling for it, and in fact will be adding to short positions for a delicious fade.

Wed, 04/11/2012 - 09:26 | 2334181 devo
devo's picture


They need a squeeze to leg higher.

Wed, 04/11/2012 - 07:15 | 2333947 ihedgemyhedges
ihedgemyhedges's picture

"I am long of Goldman's market research."

Sincerely, D Gartman.

Wed, 04/11/2012 - 07:22 | 2333952 firstdivision
firstdivision's picture

Ah-ha-ha-ha-ha-ha-ha!  Muppets closed their short position and Goldman opens theirs.  Love how futures are now up 1%.  QE trade is now off.

Wed, 04/11/2012 - 07:31 | 2333969 peekcrackers
peekcrackers's picture
It's time to put on makeup
It's time to dress up right
It's time to raise the curtain on the Muppet Show tonight.
Wed, 04/11/2012 - 07:26 | 2333960 ivars
ivars's picture

I think first USD will go up and until USA default will remain world reserve currency ( about 2016).

Only after that, the favor will switch to Euro zone. While USD is going up, there will be inflation in Eurozone, after 2016, in the USA etc.

After partial USD defaults or in imminent anticipation of such USD will start to go down, inflation moves to the USA (after/during 2016)

In this scenario, there will never be a time when gold will cost much  less in USD (or EUR)  than in costs today. There is no reason to be.

But, the gold bubble may end in 2017 with some settling price or perhaps some totally different currency system-when Gold/DJIA is around 1.

Gold/DJIA chart has wrong intial part (2011-2012-2013) , to be corrected once we see how deep/long is current stockmarket correction, but it does not matter for the long term forecast.

Even this time schedule might be a bit hurried seeing how long equilibrium can be maintained employing more and more of current paper commodities- currencies which have reserve currency status, especially USD.

That is how I see it, at this moment. May be the whole sequence is not right-perhaps its too simple- but that will be clear before this year ends.

Wed, 04/11/2012 - 09:13 | 2334154 KandiRaverHipster
KandiRaverHipster's picture

those nit wits, of course they are going head head higher!  as to when, thst is anybody's guess.

Wed, 04/11/2012 - 09:24 | 2334175 devo
devo's picture

Is Goldman ever right?

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