Market Response: Gold/Silver/Treasury Yields Spike, Equities Less Sure

Tyler Durden's picture

So far it is Gold and Silver that are being bought, Treasuries sold and steepening (as mortgage spreads collapse further). Stocks spiked, fell back to unchanged, have new respiked to new highs, and are leaking back now... Notably, equities are the most knee-jerky whip-sawy - Gold and Silver seems consistent as do Treasury yields. USD is down a little, Oil up a little, and AAPL underperforming the S&P for now...


Gold and Silver Surge...


Treasury Yields spiking and steepening (and MBS Spreads compress to record lows)...


To summarize:

  • The good news: The Fed's NEWER, OPEN-ENDED and NEVERENDING QE is bigger, longer, and has a Retina display (however its battery life is far shorter).
  • The bad news: The Fed has now confirmed it is merely a sad, political, self-frontrunning caricature of what a central bank should be.

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Debtonation's picture

Dollar collapse imminent

takeaction's picture

Honestly....I can not believe Bernanke did this.  Are you kidding me?  We are so f'd.  Wow.  That is all I can say.  Thank God I have been reading ZH all this time.  Love you guys....get in the bunker!

TruthInSunshine's picture

My reply got zapped, but I'm contrary to kneejerk statements/responses.

This is El Bernankio admitting he's out of ammo in no uncertain terms.


Market parasites (primary dealers) expected 90 billion+ monthly in TREASURY buys, and all Bernank committed to was 40 bln in MBS, while merely jawboning Twist some more ("blah blah if need be blah blah").

That's it for the new, larger, super-sized, specifically stated and guaranteed QE regarding treasuries.

Now we know why Gross has been dumping treasuries.

gojam's picture

Yeh, TIS and it was a good reply !

TruthInSunshine's picture


I am about to go short all risk-on. This will be my first significant trade since late 2007/early 2008.

The Fed just absolutely communicated it has nothing left but bullshit.

12ToothAssassin's picture

That uhaul rental is paying off since it got loaded when Ag was $27

Comay Mierda's picture

Amerika, say hello to your new landlord - Da Bernank

DUNTHAT's picture

My Theory is he thinks Obummer is gonna win in November, otherwise he just signed his death warrant.

Essential Nexus's picture

How many times have I heard that?

akak's picture

"Stimulus", bitchez!

TheFourthStooge-ing's picture

Deflation in terms of real money (gold, silver), bichchchchezzzzz!

Not so much in terms of single-ply fiat asswiping paper.

akak's picture


Not so much in terms of single-ply fiat asswiping paper.

A roadside-shitting Chinese Citizenism citizen says "what?"

TheFourthStooge-ing's picture

akak said:

A roadside-shitting Chinese Citizenism citizen says "what?"

Ah, yes, being no transration from engrish to Chinese citizenism citizenese of toiret paper for wiping ass after movement the bowers, due to curturar differences of utirizing not the frush toiret but instead the pubric roadside. This matter of creanriness being in much the difficurty conceptuarry, I'm afraid no transration is possibre without efforting much the strongry.

gojam's picture

I know Gold has spiked but it still looks like cheap gold is being pumped in to keep the spot price low.

obvious_sarcasm's picture

$25 drop in under a minute (before the spike up) says it all

drivenZ's picture

or it's just traders/algos taking quick profit. 

gojam's picture

That is a lot of traders/algos making a very bad trade a few minutes before the Fed announcement.


gojam's picture

Exactly, I think they mis-timed it.

Gief Gold Plox's picture

Knight capital developers got a job somewhere else?

Arcturus's picture

JPM gobbling up their own shorts, before the KNOWN spike after the hint hint announcement.

Hedgetard55's picture

Wow, Ben shot his wad and this is all stox get?

And how did Goldman know exactly what he was going to do?

juwes's picture

Fed says, we will buy every bond not nailed to the floor.


Market sells bonds?  Must be Bill Gross.

Cunnial's picture

Pretty lame response for QE... Market is topping commarades... Stadardatini and Poorsky empire about to toppble... Long live the empire 

adr's picture

Did the market retrace 80% of its spike in seconds only to rip back up to the high again seconds later?


That is what my chart shows.


Algos can't figure it out!!!!

The headlines say QE, but the story says agency backed MBS, not bonds, Twist continues.

Hopefully the entire thing flash crashes to zero at exactly 1PM.

fuu's picture

DXY appeared to be pretty twichy there for a few but I don't have good quality granular charts to see how volatile it really was.

edifice's picture

Here we goooo.... :D

The run up to $50 silver and $1900 gold will look like a mole hill, when this next leg up is looked back upon. Are you on the right side of this trade?

Meesohaawnee's picture

mitt romney. .if you have a brain.. youll bow out now. Theres no point. Do the smart thing. make a statement. Its rigged and you should know it

fuu's picture


juwes's picture

Stock market is waiting for helicopter Q&A to ramp the Dow +300.


Cue the buying programs at 1430 hours.

Frank N. Beans's picture

i'm holding tvix until it hits zero, then i'm outta there

: )


Timmay's picture

Brass and Lead Prices about to go parabolic......

fonzannoon's picture

how can bernanke keep mortgage rates down if treasury yields are poppin

ekm's picture

Something fishy, very fishy. I'm waiting for more commentary.


1) Are MBSs used as collateral for CDS bets of primary dealers?

2) No purchase of treasuries, just a twist, hence are Primary Dealers are suffering UST collateral shortage for CDS?

3) What does Open Ended mean? Does it mean that  they may or may not do it?

Tortuga's picture

Out here in the flyover West, "open ended" refers to a sheep, that is available, at the drop of a hat or $10 fiat.

ekm's picture


I'll take your example as a metaphor.

It seems to me that this nothing QE is the last attempt to lure suckers.

Primary dealers are hoping that the sheep will willingly arrive to be slaughtered.


Tortuga's picture

Where you been?


Executive order.


It will be proclaimed throughout the land, after market close, friday.


So it shall be written, so it shall be done. "Uh, pass me another titleist here, mr Love."

Cognitive Dissonance's picture

I just LOVE those old wooden roller coasters. Ultimately you're all alone for the ride.


Have fun

obvious_sarcasm's picture

how many paper oz's did they have to to sell to make it drop $25 in under a minute?

Cognitive Dissonance's picture

Less than it would have required to make it drop $50 in under a minute. :>)

I suspect the tools who manipulate the PMs for the PTB were allowed to knock it down in order to buy a little lower and make some money. Gotta let the henchmen feed now and then.

Gief Gold Plox's picture

Whoever did that has my heart-felt thanks. Managed to dump 70% of cash I've been holding for today at what now looks to be discount price.

Tortuga's picture

Well, you are a patient person. Do you read Santa?

thatthingcanfly's picture

Place your bets for how high gold rises today. I'm guessing we take out $1800 by the close.

Tortuga's picture

Dammit. I was cautious yesterday, only up my ante to 95%. Santa called it again.

lakecity55's picture

Miners and PMs both taking off!

I'm rich!

New i-Phonz for everyone!

americanspirit's picture

How long is it going to take for the Chinese to dump increasingly worthless US treasuries and buy up all the gold they can get their hands on before it goes too high? Or, can it actually go too high for the Chinese? If they see their Yuan as becoming the world's gold-backed reserve currency then its price in dollars (or Euros)  doesn't really matter, does it. Though it sure matters to me. I would love to see $10,000.

Any bets on where Bernanke's next job is going to be? Somewhere across the Pacific would be my guess. Ah yes honorable comrade Bernanke - the People's Republic extends a most sincere welcome to you and your little brother Timmy. Please accept this "Hero Of The People" award for your outstanding work on our behalf.  We know that you will be most successful in your new role as Chairman of the "Department of Central Planning As A Strategic Weapon" at Beijing University.