Santelli On Capital Flight And Bond Contagion

Tyler Durden's picture

While it will be no surprise to any ZH reader (with our attention to Swiss 2Y rates) the world is undergoing a massive capital flight to safety. Rick Santelli gave this topic his special treatment today, pointing out that "capital is detouring - to avoid risk", and outlining just how big a 'crash' lower in yields we have seen among many of the supposedly safest sovereigns as money floods to safe-havens (including UK, US, Japan, Germany, and Holland). What is most important is that Rick outlines why we should care - when all around are yawning on about how cheap 'dividend' stocks must be given low interest rates - since it changes the nature of capital (the life-blood of our markets) from risk-taking to absolute safety-seeking - as he points out that "it isn't necessarily about our own economy's numbers, it isn't even about who we export to; it's the fact that if capital continues to get somewhat impaired, you'll have more data points as investors not only rethink about their capital but everybody rethinks everything in the capital structure that makes business go round."



10Y Yields across many majors (and Spain)...

Chart: Bloomberg

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Sircornflakes's picture

This isn't news, we've been waiting for it since 2008.

Convolved Man's picture

Fortunately, I TiVo'd 2008 to 2012 and can now fast forward through all the crap to get to "The End".

Sancho Ponzi's picture

Bernanke: "I'll do everything in my power to force people into equties"

The whole freaking world replies: "Fuck you, Bernanke"

Manthong's picture

“everybody rethinks everything in the capital structure that makes business go round”

It is not at all hard to model capital flow in the new Fed and central bank distorted economy

janus's picture

in case you ran out of space on the ole tiVo, here ya go:


this is the end

beautiful friend,


financial apocalyptic contagion's picture

Aside from a few big fights, very rarely do I see these CNBC faggot anchors debate Rick Santelli over the economy and the topic he discusses.

It's always, "Good Job Rick" or "very interesting, Rick" or "Nice to hear from you, Rick Santelli from Chicago"

These Pieces of Shit treat Mad Ricky over there like Ron Paul was a few months back, FIRE EM ALL

I'd wouldn't mind getting all the news from him, we can keep Becky Q to suck Buffett's dick every once in a while so we can get a good laugh out of his bullshit recommendations


DonGenaro's picture

Bloomberg's no better.
If Buffett farts, they all line up in hopes of getting a whiff.

smb12321's picture

I wish folks would calm down.  For christ sake, you'd think CNBC has committed the unpardonable sin by not extolling the exact economic philosophy as Tyler.  It's an entertainment show that contains (at times) interesting and oertinent data and market sentiment.  I like the give and take between hosts (Rick is by far my fave) but you do get different points of view AND it's the only place besides FOX that dares speak ill of POTUS.

SOme folks have some real issues if they get worked up to fever pitch over a damn TV show.


financial apocalyptic contagion's picture

its supposed to be america's premier FINANCIAL NEWS channel not entertainment, but sadly it is

although its not your fault--- with all the stupid advertisments, lame stoner documentaries at night and clowns as anchors, anyone could mistake it for an entertainment source.

Robot Traders Mom's picture

@ Tyler-any idea why the Jan 14 TBT leaps just spiked?


Very unusual to see a jump like that.

101 years and counting's picture

dividend paying stocks offer safety.  as long as you ignore the potential for 50%+ losses on capital just to get the whopping 3% yield.  and the inevitable cancellation of that 3% yield when things get bad.


disabledvet's picture

Banks were the highest dividend yielders going into the market collapse of 2008. Hmmmm. What are the highest yieldeds this time? Let me guess: "gold miners."

The Monkey's picture

Agency real estate investment trusts.

prodigious_idea's picture

So you're guessing?  Why waste your time posting?

duo's picture

why save and accumulate capital if you can't save it anywhere you to beat inflation without the risk of being Corzine'd?  Capitalism without capital is dead.  Thanks, Ben.

brooklynlou's picture

Nothing like picking pennies from the front of a moving steamroller ...

Zero Govt's picture

The Fed and US Govt killed capitlism (working) in 2008 with the bailouts

you don't get a recovery if you prop up the old dinosaurs and you don't get green shoots if the dead-rotten wood is still clogging up the forest canopy

Bubble Ben 'studied' the Great Depression, what part did he look at soup kitchens?!!

Boilermaker's picture

Capital is avoiding risk???!

I just saw the equities markets have a massive reversal even in the face of abysmal data.  That's not avoiding risk.  What is Rick smokin?

duo's picture

you have to accumulate capital safely.  Try opening a McDonalds by paying them $1500 a month.  You can't.  You gotta have $250K of CAPITAL.

Baron Robber's picture

Santelli is a schill for the banks and he certainly won't discuss exactly who the ECB is bailing out in Europe - the TBTF banks.

The Monkey's picture

Everyone in equity land is waiting for the big Euro bounce (since everything is nearly 100% correlated on FX).  Healthy market for sure.

geewhiz190's picture

seen on the new arrivals desk in a bookstore- "How to make money in Junk Bonds", right next to discount rack selection "Flip This Condo".

Cognitive Dissonance's picture

I love the "Safe is a Relative Term" in the video still.

How exactly do you define "safe" in a world of risk assets run amuck........starting with the so-called lowest risk asset, USA sovereign debt?

LoneStarHog's picture

Jim Willie gives an excellent explanation of why there IS NO FLIGHT TO SAFETY < > I would love to listen to Rick and Jim debate this issue.

Dr. Engali's picture

When all this money starts flying out of this bond bubble it's going to shock the world. It will make the equity bubble look like a pimple.

Bastiat's picture

If 10% more went into gold it would rock the world.

CommunityStandard's picture

Time for everyone to get Proactiv and buy phys.

slackrabbit's picture


The black hole begins....more and more 'investors' move closer to the event horizon to avoid the outer risk chaos....or more and more sheeple head to the big opium den in the city to avoid the outlying gang wars in the burbs....the only way is down, either way


Dr. Richard Head's picture

When you get to the fork in the road, take it. - Yogi Berra

Piranhanoia's picture

I grabbed the fork and ate.  It was a simple solution and I was hungry.

azzhatter's picture

I hope Rick sealed off the hot tub in his back yard. He's way to truthful for CNBC. He was dissing the fed this morning and I swear LIESman had tears in his eyes.

BTW- Mandy is flashing the Druries again today, I'm guessing ratings really suck. Next week they are installing a pole for her to broadcast from

Roandavid's picture

That was Bernanke cum in Liesman's eyes.

smb12321's picture

Liesman has the advantage of hogging all the time and STILL can't hold a candle to Rick.  I love Santelli when he gets going!

zerotohero's picture

There isn't anything that is truly safe - just perhaps "safer".

slackrabbit's picture

i have a gold  tooth that says  'bite me' :-)

zerotohero's picture

don't smile around the wrong people.

StychoKiller's picture

Or, just start chowin' on their facez!

Seasmoke's picture

just buy all the van Goghs you can people !

Mark123's picture

The basement is on into the attic!!

slackrabbit's picture

dude, you have truely summed it up!

Mark123's picture

I recall that Rogoff/Reinhart study saying that about 3 years after a banking crisis you have the sovereign debt crisis....hmmm....are we there yet?  You can hear the supports creaking as the stress overwhelms the duct tape holding this together.


If this rigged market does fall apart it will be wild.  All the pension funds, government services, everything will be destroyed.  That is why it can't happen!!!  Bernanke et al won't let it!!

slackrabbit's picture


Print Ben print....print the economy back.


This is like a real game of Alan Wake - 'If I believe hard enough, I can write my dead wife back'....and if it works - its pet cemetery time for the dollar

Temporalist's picture

Lemmings led by sheep who are owned by wolves.

yabyum's picture

The blind leading the nekkid.

StockHut's picture

No way Santelli gets a bonus from CNBC this year. He tells the truth way too much.

ArkansasAngie's picture

I have cash.  I want to invest it.  I've looked at my local real estate and can't find anything that is priced at what I consider its economic vale.  I'm not in the market.  I'm not going to buy bonds for any duration and short term stuff is irrelvant.  Seriously ... I'm thinking that I'll lose less money sitting out by my pool this summer than anything else I can do.