Market Snapshot As 10Yr Drops Below 2%

Tyler Durden's picture

Market update as the BAC/NFP/WTF/QE initiated sell-off accelerates

Buffett about to take a bath (puns can be so delightful):

and the 10Yr decidedly bid

and judging by the fair-value of the S&P in an Operation Torque regime, there is a whole lot more to go...

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Sutton's picture

Big O is gonna give everyone a million bucks.

Oh regional Indian's picture

In this debt is money world, a million bux is actually a million sux.



kahunabear's picture

I have two questions. One for for the Wanker and one for the Messiah.




LongBalls's picture

Dude..... It matters not. They have two choices. An ongoing boom and busting inflationary depression then full depression collapse or raise rates leading to a depression then collapse. The debt is unpayable in a deflationary enviornment. Once QE3 is announced the world will loose all hope of being paid back by fiat pieces of paper worth anything more than its original intrinsic value. It is obvious that they intend to loot every entity holding dollars to include their own citizens through inflation for as long as the ponzi retains the confidence of it's holders. Thus obtaining real assets for nothing for as long as possible. They WILL pay their debt...... but guess what it will be worth?

Start protecting yourself. You are almost out of time.

Western's picture

Hey Tyler, are you no longer using the risk basket and now strictly a 2s10s30s butterfly? I remember the risk basket includes the butterfly plus a few commodities and currency swaps.

Pretorian's picture

This is the "Grand Magic" manipulation of US Majestic 12, so it can afford borrowing more and more,cheaper and cheaper and destroy world capital. The second thing is to cause pain and mess over Europe so more and more people can lend to Uncle Sem for lower and lower interest.

caerus's picture

tuesday should be fun

caerus's picture

still holding a small position...fortunately silver longs and equity shorts making up for it...see how next week turns out

fiddler_on_the_roof's picture

Good luck. I hope(plan) to sell my play money in GLD calls if/ when Gold hits $2100. I could be wrong. then I plan to small portion of it as short and buy GLD puts possibly after Indian marriage season over - middle of October, to hedge my big physical Gold.


I am also short CMG(bought puts) 2 days ago -  small amount, but that Pig did not move much today. I am patient.

Be carefull with your silver. short stocks look good here.


John McCloy's picture

And the stock market will just pretend the bond market is not proving we are in a modern day depression because there is no volume and none of the Big Banks which own the majority of the stock will sell...Sounds like a plan.

Caviar Emptor's picture

I believe we're in a far worse depression than the early 1930s. They had a rest immediately, and double digit growth resumed as early as 1933 and stayed at double digits for 4 years. America was the industrial engine of the world (we outsourced that). We were a net creditor nation. Public debt was low. The demographic was younger. We were energy independent. They had crazier stock market speculation, we had crazier real estate speculation. They cleansed Wall Street, allowed failed banks and brokerages to fail, jailed crooks. We have yet to start. 

John McCloy's picture

Spot on least then we knew how to work and build as a nation. We knew how to build ships, were the greatest lender and still had relative freedoms and minimal government MARRIAGE of business, govt and more importantly media. Should scare all how the horrors of speculation without recourse because of fractional reserve and margin buying of stocks at 10-1 could lead us where we ended but should scare more that the fates are even more intertwined because of naked CDO's and global concertion to pretend "Hey..we do not need to ever work..we can just rely on these other folk in a far off land to work and manufacture for us"

  A nation truly supportive of freedom would not abide using an entire populace for slave labor unless we are willing to face the consequence of decades of this occuring. However most can regurtitate the latest TMZ or Jersey Shore drama with laser precision. 

Caviar Emptor's picture

Agree, John: I still have hope we can wake up. I still believe there's plenty of good and plenty of advantages. But unless the planning is long term and adaptive (and just), it's not really a plan. The age of 'greed is good' is dying, but it's dying hard. 

cossack55's picture

Good points. I've been thinking WPA redux for the Teleprompter next week. Thoughts.  I see some WPA buildings, pools, band shells around here all built in 1938 and in pristine condition and still in use.  I'm intrigued.

Caviar Emptor's picture

For all that people have bashed those ideas, we can all now see exactly how and why they come in handy when TSHFT. That's not something for good times, but reserved for bad times when the alternative is armageddon and despair. 

DefiantSurf's picture


They had a term for this when I lived in Oklahoma, it was called "herding", basically it entailed driving the stupid cows into a funnel, loading them up and hauling them for slaughter.


SheepDog-One's picture

Yep, where I live they use some oats buckets to get the sheep in to shear them, then its up the ramp and onto the slaughterhouse truck...all the while the sheeple dont care they have a mouthfull of yummy oats. Party on in oblivion america.

Ausperity's picture

Oats are yummy... Mmmmmm...


In other news, the NFL season starts in a week!  You have a favorite team, SD?

spartan117's picture

Who is being herded?  Bond holders?  PM holders?  Equity holders?  All of the above?

DefiantSurf's picture

Fed props the market meagerly, waits for a news story and stops propping, retail traders bail out of the market on the slide and hole up in treasuries, rigtht where the FED wants them.


nmewn's picture

Clearly this calls for yet another speech.

IAmNotMark's picture

Oh GOD!  Not ANOTHER speech!!!

Unless it's a resignation speech.  That might do some good.

Oh, wait.  Biden.  Never mind.

nmewn's picture

At least with Biden, one expects something comical every time he opens his

lolmao500's picture

This must be the excitement over America breaking the debt ceiling yet again.

Total Public Debt Outstanding : 14,697,414,789,563.40

Debt ceiling : 14.694 trillion

Debt we can believe in.

buzzsaw99's picture

At Buffett's age he shouldn't even be buying green bananas.

SheepDog-One's picture

lolmao the more debt you have proves how rich you are!.

SheepDog-One's picture

We need more speeches from the 'stewards', lolmao!

'Uh, ladies and gentlemen this is your steward in chief speaking, the wings have just fallen off please return your seats to their upright and locked position and place your head between your legs and kiss your ass goodbye. All is well. That is all.'

Caviar Emptor's picture

Yes. That goes along with the ridiculous "all we need is confidence!" bull. Try riding the bus with confidence. Try running a business. Try getting a job. 

lolmao500's picture

One thing that confidence will get you, even if you are butt ugly, is WOMEN... thing is, the stock market ain't a woman.

Caviar Emptor's picture

Dang! Was that the secret?

narnia's picture

why in the world is the Fed not contracting its 10y positions at this yield?

Subprime JD's picture

Lets see if 1100 will break by the end of the month.


Upside risk: QE3 talk and/or implementation

- economic indicators rebound

- Eurocrats pull the Euro TARP and save the day for a time

Downside risk: bank failure in EUR

- US recession confirmed

- continued job losses

Hannibal's picture

It's Simple:  If you don't hold it, you don't own it!

cossack55's picture

....and if you own it, don't declare it.

NEOSERF's picture

At 35,000 new jobs averaged in the last 3 months, it will take 428 months or 35 years to put the 15M under/unemployed back to work...of course then this requires you take a look at the QUALITY of those 35K per month and see exactly how fully employed that outsourced programmer or real estate insurance exec really would be...

RobotTrader's picture



Flat out the Greatest Financial Feat in World History.

10-yr. at 1.99%

Or as Tom Keene puts it, "the 10-yr is now the new 2-yr."

With deficits exploding towards $17 trillion next year.


mt paul's picture


we don't need 

no stinkin hedges....


long silver

nov 2008

Jannn's picture

Can someone please explain to me how the yield is as low as 2 % while there is no QE. Who the fuck is buying this? Is the FED buying treasuries in secret?


I don't understand..



Blorf's picture

The Fed floods the market with put options on them (aka insurance), and presto, people don't demand as much of a yield.  Basically the same reason people are willing to deposit money at BAC or C (aka loan them money) for ludicrously low rates:  it's FDIC insured.

There was an article on here several months ago about this.  Basically the Fed is AIG on steroids, but with a printing press.



jekyll island's picture

Yes.  The Fed has intermediaries (other banks) that will step in and buy the bonds if needed.  The Fed gives the banks the FRN$ at 0% and then pays them interest on the bonds.  Kinda like how The Fed gives Blythe the money to cover losses shorting the silver market.  It is all manipulation by the "smart people" at the Fed and in the Treasury Dept to serve their masters.  

ozziindaus's picture

With conspiracy aside, the US treasury is still considered as good as gold and the most liquid, stable flight to safety investment. Don't take my word for it, the chart says it all. More importantly, low yields indicate trouble ahead and especially uncertainty. That's why gold performs best during deflation. The key word being UNCERTAINTY.

dcb's picture

Not sure if this is a joke post. But I shall try and answer. QE doesn't lower yeilds, in fact it does the opposite, that's what the charts show, and the timing. Qe moves money into risky assets as the fed overpays for bonds, the primary dealers make a profit trading it, then use futures and leverage to boost asset prices (commodities, etc). this raises inflation expectations, which make yeilds rise. two times at teh end of QE yeilds have fallen. Which despite Bill gross at Pimco, I have been doing very well on a very large position in long term tresuries and muni's for a while now.


But, you need to be careful trading it right now, and it r3eally isn't an easy trade. we shall see what happens next week, but based on speed lines, you'd short it again at the close friday. The daily MACD gives a different story.

Jannn's picture

Thanks Blorf. Thats clear. I knew there was something going on here..

So instead of buying treasuries with new money, the FED buys put options with new money?

Do you have a link to an article about this? 



ozziindaus's picture

Inflationists have some answering to do. Hyperinflationists need to learn how to read yield curves. 

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