Long End Decouples On Risk Of Constant Central Planning Failure

Tyler Durden's picture

Treasuries have rallied on the hope being handed out by Bernanke, recovering overnight losses after gains from last week moving more Goldman muppets back into pain. What's different this time from last week's rally is the notable underperformance of the long-end relative to the front-end. While still red from Friday's close, 2s through 7s are almost back to unchanged and 4-5bps off overnight high yields. 30Y however is still +4.5bps and only 1.5bps off the high yields overnight. 2s10s30s has fallen notably (which should be risk-negative) but for now - all the equity market can see is a centrally planned equity market rally to float all boats. It seems to us that the long-end remains stuck in the mud on long-run worries over the print-big-of-go-home attitude that was just reaffirmed.


Chart: Bloomberg

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GetZeeGold's picture



I must be doing this wrong.....that wasn't suppose to happen.


It was definitely suppose to couple.


Sudden Debt's picture



Badabing's picture

on the brighter side gold has a nice pop this morn.

GetZeeGold's picture



Stop trying to make me feel better. :)


fonzannoon's picture

Am I reading this right that the Spanish Pres who defied the ECB with their budget cuts just had some elections go the other way because he was TOO stringent with their budget cuts?

monopoly's picture

The bull market in gold and silver is so far from over for me there is not even a need to talk about the end game. This is just getting started.

Notice, none of the idiots on TV are talking about Spain. Just a little corner in southern Europe. No big deal. And will the bastard Corzine finally get indicted? Maybe One will go to jail. I was hoping for about 300 banksters but at this stage 1 is a start.

Jake88's picture

Corzine go to jail?? What are you smoking!

Snakeeyes's picture

Talk about Central Planning. Between The Fed and the Administration, they are trying to Centrally Plan a housing recovery and economic growth.

<a href="http://confoundedinterest.files.wordpress.com/2012/03/wbm032612.gif"><img src="http://confoundedinterest.files.wordpress.com/2012/03/wbm032612.gif" alt="" title="wbm032612" width="645" height="461" class="aligncenter size-full wp-image-12908" /></a>

This is insane.

Village Smithy's picture

You know what, we would all be a lot happier if we just got on board this ridiculous CB manipulated rally and made some money. Yes its going to crash someday but when? At Dow 14,000 or even higher? Who fuckin' knows? One thing is for sure, thanks to Tyler and his/her obsession with that little thing called the truth, even if we play from the long side we are going to realize that the downstroke has begun before 90% of the world. That should be worth something. Until then BTFDs.

xela2200's picture

The Long Ends just doesn't react so well to the carrot and stick strategy. It is more of a show me the money scenario.

It doesn't matter if gas and commodities go to infinity or we get better economic indicators. If treasuries yield goes up, the FED will act. Twist is coming to an end in June, and its effect is already wearing out. An increase in interest rates right now would be devastating too the economy and to Obama's re-election chances. Worst yet, when the rates gaining momentum they quickly spiral up, and CB need to through the house at them to stop them just like the ECB did.

If you want to know for sure if the FED will print, then you should watch the treasuries.

Watson's picture

Much harder for the Fed to control the long end compared to the short.


viahj's picture

not a good start to the auction week for ol Timmah


10YN   -40.6 BPS   @   97.515

30YB   -125 BPS   @   95.312