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Massive Short Squeeze, Flight To Safety Pushes 10 Year Yield To 2011 Low 2.77%
The unprecedented moves in the yield curve continue: even as the blow out in (ultra) short term liquidity persists, notably in GC and in Bills maturing just after the August 2 D-Day, the scramble to cover long-dated shorts has collapsed the 10 and the 30 Year by an epic amount in the last few days, with the 10 Year trading at 2011 lows of 2011. Why is this number relevant? Because the last time we saw it was in August 2010, a few weeks before Ben Bernanke announced QE2. In other words, history is repeating itself verbatim from last year. As to whether the move is due more to a flight to safety or a short covering crunch we will know only next week when the CFTC releases its latest COT spec short data. One thing can be ascertained, however: the Fed models that look at rate-implied deflation indicators are currently screaming bloody QE. And it will come... As soon as the stock market finally realizes that it has to tumble before it surges to new and Weimerian highs. In other news, keep an eye out on the USDJPY: we may see a flush there any second.
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Flight from Ponzi - The Great Escape
10-Year has to go to 2.4% before BB makes his move. 10-year is not really that bad yet.
No QE3 in 2011.
No announcement in Jackson Hole this year.
Wait and see until 2012.
Fed needs to observe the growth rates after debt-ceiling rise and under non-QE conditions for the next few months. Two regional Feds even said so today, while everybody was so focussed on the puppet show in the House.
Misguided Keynesians they may be but if they are serious, rigorous Keynesians that’s what they should do...although I think they already know what the results will be.... which will make (in their eyes) waiting around to make observations seem not worth the dely in policy action.
I guess we’ll have to see how fast things get bad and how much external influences tip the scales in their economic laboratory…
who the fuck owns gold but not treasuries? u fuckin retarded? people who don't think things out deserve to lose hella money asap
Weimerian highs....that's epic
Zibabwe high isn't that recent.
I can only think of that China will get less interest payment, is that a good thing?
So tired of the same old song and dance. How can a country with 14.3 Trillion in debt and a sinking economy be a safe haven? How can an economy with a 1.3% GDP growth rate after the Govt deficit spent and additional 400 billion in the Qtr have a stock market down by only 70pts!
Well thats why Im sitting it out on gold and silver. Hell with this clownshow.
And if everyone did that, just stopped playing and cashed out their paper, the Ponzi would implode in on itself quickly.
I think peole are..key word is people.....they are pulling money out of MM accounts big time...I think the volume we see is just day traders and HFT computers..
"Disturbing" Rumblings Of Panic Begin As Investors Pull Almost $40 Billion From Money Market Funds
http://www.businessinsider.com/debt-ceiling-stalemate-causes-a-run-on-us-bonds-treasuries-short-term-credit-2011-7
This article states that treasury-investing MMF's had significant outflows - ie, lots of treasuries being sold, presumably. And yet, they keep crawling ever upwards.
Tell me the logic behind this, if this indeed is a "free market".
"This article states that treasury-investing MMF's had significant outflows - ie, lots of treasuries being sold, presumably."
I am financially illtiterate, but, doesn't the term "outflow" as it is used here mean that investors are pulling their money out of the targeted money market fund? If so, then I can see how this would cause a massive selling of the funds assets (in this case, Treasuries) in order to provide those investors with their "lovely departing gifts".
Maybe the run on short-term Treasuries that mature in the next three months is due to the implied guarantee (full faith and credit of the U.S.) coming into question in the near future? In other words, get your money while there is time?
Exactly. Lots of treasury sales, which should cause their price to go down (yields up). But the reverse is happening.
Isn't the demand for USTs due to variation in Repo discounts?
what you're not asking it "what are the MM's buying"? They are the ultimate yield hungry "investors" as we all now know from Lehman's collapse. A collapse in the debt market will be preceded by soaring treasury prices since "the perception of safety" is in fact the reality. thrown in a DC hissy-fit and you have the recipe for a total "disturbing" of a market that is twice the size of the equity market "on a normal day" and in an age of QE probably more like 10 times the size. these Money Market folks have no idea what to do with money--more than likely they've been buying euro-debt up the ass. now the "bill is coming due" and the euro itself is destroying the European debt markets and more importantly trade itself is seizing up thus putting the ironically responsible European Union in "total and instant economic hell." this has already been manifested with unpayable debts in Ireland, Greece and Portugal. Now the economies are in full free fall which is leading to an immediate and forced return to "europe before the euro." all that debt is worthless. it is spreading to the USA...although Japan has been a fascinating exception--so insofar as the USA is concnerned what for "Sudden Default" of a state or large municipality--probably the failue of a major bank like BofA. nothing that the Fed can do about but follow Gresham's law of "don't throw good money after bad" and hope it works out.
http://www.space.com/5292-darpa-works-perfect-forging-high-velocity-spea...
That's how. Molten spears bitchez.
Brilliant!
http://www.youtube.com/watch?v=NLxN0wpFoP8
Arch,
Your question is a good one.
"So tired of the same old song and dance. How can a country with 14.3 Trillion in debt and a sinking economy be a safe haven?"
Because these non-bankers bankers, believe it or not, are stupid as is 'big money'. These guys are not bright at all. That's why after three years of study the brightest minds in US academia came up with Glass-Steagall in the '30's: they discovered that american bankers are socio-paths and that the only way to protect the citizenry is to outlaw them from the markets and have very strict controls over each transaction at all times.
This is not a joke, my friend sadly enough the goldust twins came along and bought the country om
Kind of like a tsunami, the tide receeds and all the dumbshits wander out into he seabed to take a look, then oh shit, a big wave wipes them out.
Also, don't expect Obama to do anything next week but play big in the crisis and let things get worse as they are terrible things to waste.
USD/Yen @ 76.94.
Flight to dogshit quality. Who the hell buys these treasuries, when the Dollar meanwhile is collapsing?
Ultimate safety is in dollar denominated debt? Makes no sense to me at all. And this rush to bonds because last time a year ago it was a good idea is likely to faceplant this time.
Exter's pyramid.
Indeed. Exeter's pyramid and Irving Fisher's bifurcated credits. Very predictable.
That's a really good question ... it is hard to know for sure but violent swings in US bonds since end of 2010 looks to me like start of wave 3 upwards. Knowing what banksters did to all other markets and free trade - could be some form of manipulation which they are practsing while they can.
Expect USD to start rising when bonds resume wave 3 of 3 - very soon I guess. That will come as some compensation to poor VIP bond customers, dictators, oil sheikhs etc.
This is the weirdest thing going on right now. Bond yields not only going down but cratering....in the face of macro economic news, political news, and basically all common sense that SCREAMS higher yields. I can't help but think that either the FED and TBTF banks are secretly manipulating the bond market to prevent the U.S. from suffering the same fate as the PIIGS (and to rip the face off the bond vigilantes and everyone going short, including PIMCO), OR the HFT algos are not programmed to trade on a potential U.S. default. They are blindly buying U.S. bonds (secondary markets, for safety) because a U.S. default has was never considered during their programing. Just grasping at straws trying to figure out why bond yields are not rising. It is the strangest thing.
Violent swings are visible so there must be some massive unloading followed by sharp yields surpression, short sqeezing etc. Yields surpression was used last months for new debt issuance.
Considering global size of bond market , I do not expect powerz can easily or quickly start full manipulation with algos like it has been done with stocks, PMs and parts of commodity markets.
Bond holders troughout the world will be waking up at different "speed" ... Gross and Rogers can be considered as "smart money" IMHO here even if many ZH readers will joke with them for few days.
Question: will powerz force cash funds, TBTF banks and other pools to enter falling bond market?
According to timeline of announced events , next UST10y stop may be at 2,66% and probably reversal into wave 3 of 3 higher
@EscapeKey
The only thing saving the FRB and the banksters is the low rates. If they lose the curve, all is lost. This makes a surge in yields anytime soon very questionable.
Who is buying these treasuries? Simple, anyone who does not have access to insider information or enough capital to trade and invest in privileged arenas. Basically, anyone with a 401K, 529, or locked into the ponzi via their institutional investor. God only knows where gold would be if I and all my employees could actually make 100% of our own investments. This is financial repression to maintain the status quo. Settle in everyone, this winter will last 50 years.
The fact that 'the bond market' is as huge as it is, speaks volumes on the mess we are in, and the diversion of capital that does nothing else but 'gamble' on the direction of government debt on a day-by-day basis. I'm do ready for the implosion to happen already
GOLD *** HUGE COMEX Commercial (i.e. Big Banks) Paper Gold SHORTFEST ...
Net 19,000+ new contracts short this week.
3rd week in a row of large new shorting by them. Why? Is this the way to make profits?
Anyone ask themselves where GOLD would be right now if these Fecks didn't Short the Hell out of the Paper Gold Market ???
Anyone spell Manip ???
Oh, the commercials went short for a change, did they?
Oh, don't worry your pretty little head about that. They were just "market making". Market making in PMs means to sell short.
edit: Net short for the week is about 10k. (-18) and (-8).
http://news.tradingcharts.com/futures/7/9/162367997.html
Check Your INFO ...
COMMI Net shorts added as of Tuesday which is the only official data CFTC gives us is:
LONG: -4,135 SHORT: +15,024Net Commis is over 19K like I said.
http://www.cftc.gov/dea/futures/deacmxsf.htm
You Say: ""Oh, the commercials went short for a change, did they?""
==========> I've been tracking these and other stats for long years.
As long as I can remember, The Commi's have always been heavily SHORT, never have I seen them net long, never.
In a normal market, you would expect to see them go actually long once in a while to play the other side for profits.
I think your sarcasm detector is broken.
Your link is futures only, mine is futures+options, so fair enough.
Yes, my sarcasm detector is in the repair shop...
We laid on Spec shorts this week as well.
Spec shorts fine, thats your gamble.
Commi's are perpetually short.
Currently near recorod 28 Million ozs paper Gold, and counting...
well written
How much will it be this time? Oh, and when does instability come into play?
http://www.dailyherald.com/article/20110729/news/707299863/
Wow! Living mortgage free for years, probably also took out a $30k Home equity loan and that's the crappy furniture she ended up with?
Whew. You'd think she'd watch a couple of episode of this old house while home on 'disability'
"Screaming bloody QE!" awesome.
But if QE2 did not help the economy (look at last 6 mos. revisions in GDP today), and the Fed does not target the 70% of economy, "Consumers", how can another massive asset purchase program instill confidence in a Congress who is tackling (finally) the issue of massive over-spending?
(H/T Dylan Ratigan, "Run-on Sentences For Dummies").
Congress is NOT tackling the issue of massive over-spending. Its a dog and pony show, remember. Don't watch too long or you might go into that sheeple-trance and start to believe it yourself.
Exactly, the ponzi puppets are arguing over money that both parties already spent. Sort of like refusing to pay your credit card when the bill finally arrives. Wait what? People are already doing that AND not paying their mortgage? Nevermind...
Everyone Pavlov conditioned to believe next up is another sure delivery of unlimited Hefty bags of free crack to the markets, I wouldnt be so sure, and whatever happens is guaranteed to disappoint. Thats what I see anyway. They might get a QE, but it will be just for maintenance, no $10 billion daily POMO partys, those days are over.
CFTC is out. it's on First Word Fixed.
It's as of Tuesday, hence, irrelevant.
Probably added another 10K contracts since then.
Butt of course, due to the Comex's ARCHAIC Reporting System only they "know"...
http://www.cftc.gov/dea/futures/deacmxsf.htm
Missing this move hurts....kind of. After grabbing 7 full points since Feb. on a blend of Notes (5-10 year), I went flat recently.
But I don't have any regrets: no need to get greedy, and the technicals were very murky (there was no way to argue a strong upward move in prices earlier this week). And if the debt ceiling vote had passed the house, for example, longs would have been smoked.
Now it's time to prepare an equities buy list......shares I'd like to own at 30% off. Wait for the pukefest and then load up.
After QE3 gets announced, it will be time to short Treasuries....again.
I remember all the talking heads congratulating themselves on how Bernake would be tightening monetary policy and start to reign in the stimulus as green shoots were surely signaling that the recovery was well under way. QE3 here we come!
"Green Shoots" are to "Bernanke"
as
"WMD's" are to "Bush"
They must be here somewhere......we just haven't looked hard enough.....keep looking......
you mean "coinage and railroads" here we come. the Fed as is so pompously pointed out here "is a private bank." EXACTLY! They have to make money and pay the Treasury! "Here--have a trillion dollar pair of platinum coins Mr. Fed guy." To date the Fed has financed nothing but a debt crisis. "Here it comes." Hold on to your silver--it could start adding zeros in short order.
Buying bonds of a bankrupt country surely is a "flight to safety"
Maybe they just think the US govt is the least horrible place to be in world meltdown.
Copy that, but as you know, the counter-party risk means that the Ignorati are putting out their financial fire(s) with lighter fluid!
can somebody please explain to me why the Ponzi scheme market isn't encouraged by getting an audit & a balanced budget amendment I don't get it...
Hint: PONZI
I am shorting more.
Subdued parties in the Hamptons this weekend.
Most will be on the phone to DC nearly every two hours this weekend. No time for champagne and canapes in the Hamptons.
They're probably paying their favorite whores to make some surprise visits to DC this weekend.
Or getting fitted for bullet proof vests...
Why would it be subdued? Qe3 and tarp 2 coming soon. Party on like it's 2009.
Should be OK weekend. Food stamp time of the month no?
that girl on Fox News the brunette is SO hot
They all are. That Colwin - yummm!
What they are saying is that you better get out there buying up as much LULU, CMG, CROX, LNKD, PCLN, and AMZN as fast as you can becuase when QE3 hits $500 for Amazon will look cheap!!!
100 P/E hell that is almost like 1:1 we've got to try for 1000/1!!!!
Graham and Dodd are turning over in their grave.
Bob Janjuah On The Trigger For The Next 'Big And Painful' Bear Market
By Gus Lubin
http://www.businessinsider.com/bob-janju...
Nomura's Bob "The Bear" Janjuah says the market will enter a painful bearish period as soon as investors realize what he's been saying all along. That is: post-financial crisis growth in developed markets is fueled by debt, and emerging market growth is slowing too.
Aka "weak trend growth."
He expects this by the end of September.
Read more: http://www.businessinsider.com/bob-janjuah-three-words-2011-7#ixzz1TWg2wYrnSo he's taken back his near term (multi-week) target for the S&P.....~1,400?
That's a lie. We were told of green shoots and recovery summer. Janjuah is a racist
Don't you mean 'Weinerian'?
FBusinessNews, i meant whats her name my talkin' dreamwoman walkin' the pits on NYSE... i'll see u guys @ Happy Hour...god bless
By the way, WHAT THE F JUST HAPPENED AT THE END OF THE DAY???!!!?WTF!!!
I just watched the DOW ticker go from down 99 to down 62 to 71 to 65 to 80. There was a line of massive sells and then a quick major buy and then a massive selloff at close.
ALGOS GONE WILD!!!! I think someone needs to start selling videos.
It was just those 14 million SPYs passing in the last 5 minutes.
Market pegged the fullretard'o'meter. But whats new...
Whats safe about the 10 year bond? Maybe its the confetti machine mentality but, I simply don't get it
It's simple. Are required to pay the interest, and no debt limit raise means no more supply. Get it?
That and, other than the pm's, where else is there?
Guess a lot of financial "wizards" have no safe storage for "barbarous relics!"
2.1 million share block trade on TLT in the last few minutes.
Bond shorts are in huge trouble.
TLT cleared to new highs on huge volume, now breaking out of a huge 8 month base.
Duh. That's why I canceled my TMV bid and started drinking.
MomoFader every time he sees a momo stock pop a point or 2 Monkey Falls out of tree? - YouTube
jim rogers got burned...tbt 2X TMV 3X...
Shorting bonds is risky when the other side has a printing press. Whether they are in trouble depends on what, if anything, they bought from the proceeds.
ZIRP to the moon BITCHEZ
All this crap makes me think everyone is going to be some shocked by how high the price of Gold & Silver are going to go.
Debate has started on Boner 3.0
hat tip to all zh'ers who went home long this weekend. bold play.
SSN and GPL are not bold plays. Boring, yes.
Flight to safety?! Who the fuck buys that Yankee toilet paper. Even used real toilet paper will be soon more valuable than that crap.
Our TP is specially blended, versus your Eurotrash TP made out of recycled Russian newspaper.
The U.S. is still a safe haven because the rest of the world is even more fucked up.
What? You gonna invest in China?
Those motherfuckers can't even produce dog food and dry-wall without accidentally poisoning the product.
And let's not forget their prowess when it comes to high-speed trains.
These are exciting times. If I were single, I'd be enjoying myself.
But I have a family. So I'm shitting my pants.
http://geraldcelente.proboards.com
These are exciting times. If I were single, I'd be enjoying myself. But I have a family. So I'm shitting my pants.
Word.
Someone noticed my snark about pet food poisoning, and laws to prevent you suing over it.
Top tip: Don't fuck with Paris Hilton's lap dog; her angry beaver will get involved1
I'm glad I live in the US where there's never been any train accidents and nobody has ever died of food poisoning or asbestos.
My little boy know the basics of a good deal. Its so simple. Here it is:
By low.
Sell high.
And he is 8 yo.
Now teach him timing, and you're set. He can support you.
What a splendid idea. My "entitlements" handled by an 8yo. Thats safe haven.
How cute! But that model is outdated. Real money comes from buying way too high, making huge losses and getting the profit from government. Or else we blow up the whole system...
I was 8 once. Here's what your poor son has to look forward to:
Buy Low
Sell High
Get taxed on gains.
Watch purchasing power of what's left erode.
Go to store, see higher prices on goods, stand in line behind the guy who dropped out of school at 8, who is paying for his groceries with food stamps. Follow him out into parking lot where he gets into brand new SUV and drives to his cozy home he bought through HomePath and hasn't made a payment on for 6 months. Is that a 52 inch flatscreen you see through the living room window?
Realize the joke is on you.
Unless of course your son works for Goldman, in which case he'll be on the side that's laughing.
Harry Reid has said extremists have locked down the White House.
He says they have vests laden with deficit cutting measures. They are threatening to bring responsibility to our government.
If they succeed, it's the end of life as we know it he says.
hey, bob_d! those deficit cutters are even more rad than box cutters.
i know a guy @ the Raccoons Lodge who has handled them both.
fail to deliver bitchez!
Time to look at a chart of TIP? Past due.
Yeah.....!!! 10s=2.80% and BB King into QE3. Big Blues
FED call public secret meeting with PD banksters
huge bond rally/ short squeeze ensues
???huh???
good observation.
But wait, wait, wait, wasn't Bill Gross massively short Treasuries when yields were 3.75%?!?! ROFLMAO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Didn't he say he had some synthetic hedge in place?
Gross's mattress is stuffed with CASH.
You shouldnt be ROFLMAO at anyone Leo.
Boobs R Us
Didn't Jim Rogers toot his horn two weeks ago how he's short Treasuries once again?
Jim Rogers can be forgiven when he forgets that we live in the Twilight Zone, where a possible US government default is met with an increased demand for US government debt.
At least in Vegas you have better odds of winning a little. Am so glad I gave up on all this crap a long time ago....except for physical and miners. And this market still has a bid. Wait till there is a bidless market. That is when it gets ugly. Believe me. I have been there.
No shorts.
I suppose one has to look at money within the fence and outside. A tell are the high prices for the safer assets.
"Why is this number relevant? Because the last time we saw it was in August 2010, a few weeks before Ben Bernanke announced QE2. In other words, history is repeating itself verbatim from last year."
....and Heli Ben and his minions are now all gathered together again in JH.....just as before the last QE.....
I remember when I thought PMs and SHORTing the 10/30 bond was a no-brainer.
Half right is still half wrong. Will somebody please kick me?
I wouldn't touch those bonds with Sheila Jackson Lee's bloody applicator.
SAC, disable the above account, its spamming every post...
Austerity will lead to a stronger dollar and lower interest rates and cheaper capital and real investment into needed production. The exact oposite of what Krudman thinks.
Austerity will lead to actually having to pay for those already "soared" oil prices along with all the rest of the commodity complex. the immediate danger is in the muni complex and the "dishonest debt" of the various states all of which claim to have "balanced budget amendments" which are enforced and none of which actually are. it's time to start thinking in terms of Bakken Airlines--where the Dakota's, Montana and Alberta suddenly become an economic super power instantly due to "Sudden Debt" issues in the rest of the various "states" and these "little people" having all your food and energy. Minneapolis could easily be "the real Chicago" and Washington DC could be "denuded" of humans. In short "how does creating trillions in debt create more inflation?" Indeed "wait 'till the military decides to act" under this scenario.
Flight to quantity.
S&P500 long term chart shows a series of broadening patterns - aka megaphone wedges.
The three broadening formations reveal an unstable market where buyers and sellers battle for control...
http://stockmarket618.wordpress.com
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