Treasury Yields Tumble To New All-Time Lows

Tyler Durden's picture

Despite some early angst, Treasury yields have been crushed lower today. Down 7bps from their European close levels, 30Y is trading with a 2.45% handle for the first time ever and 10Y now with a 1.39% handle. Both all-time record lows as the 2Y auctions with a 4x bid-to-cover as 2s5s flattens to almost five year lows as the Fed's ZIRP and Europe's NIRP has pushed investors to front-run into preservation of capital instead of pushing them out on the risk spectrum. For those who care (instead of preferring to listen to dividend-stock-touting talking heads), 10Y TSYs have plenty of room to run if rates keep falling (15% upside if Japanification takes hold) - which prompts the question - just what is the interest expense convexity for the Government if rates were ever to rise from here?

10Y Treasury yields with a 1.39 handle...

and 30Y with a 2.45 handle...


Charts: Bloomberg

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battle axe's picture

SAFETY, and a real big bubble that has to burst sometimes. Ironic isn't it. 

Skateboarder's picture

A year ago it was over 3%. It's on it's merry way to 0...

Also, lol when playing the stocks game is safer than bonds...

Precious's picture

This phase will make 2008 look like a kiddie pool.  Dark days of earning announcements ahead ...

boogerbently's picture

This, alone, is a testament to the IGNORANCE of the typical investor.

Buying the "safety" of dollars that are diluted every 4-6 months, in an investment that yields LESS than inflation steals.

All the while treating gold as a commodity, instead of the real "safe haven".

They are CERTAIN the US govt. will pay. I guess they haven't been following any of the stories about public pensions, Soc. Sec..........

ITrustMyGut's picture

greenspan alledgedly told us.. housing was the next to last bubble.. bonds would be the LAST


and goldenjackas a month+ ago suggested that once 1.5 breeched.. it would be the BLACK HOLE


stand by



Snakeeyes's picture

Yes, but everyone is seeing a "Sea of Red" in sov yields. Just hum along to "Sea of Love."

Rusticus's picture

Borrowing sans usury, there's your exceptionalism. 

Temporalist's picture

And gold still hanging in there as everything else gets stomped.  Good signals for gold "competing" with strong dollar.  Much like the "multiplier" not working the "manipulator" effect seems to be wearing off.

ParkAveFlasher's picture

on that note, this is the second day in a row that gold and silver aren't matching tic for tic in the spot price chart...the moves look the same jaggedty-wise (forgive the terminology but I am an amateur) but the pricing level of the moves are shifted, as is the general slope...anyone else seeing that?

jimmyjames's picture

anyone else seeing that?


Typical deflation trade-

Silver still unloading its industrial weighting and gold has diverged from the industrial metal complex and is trading in monetary fashion-although somewhat weak-but very bullish should it continue-

Silver can afford to be late-she's blinding fast when/if the monetary side starts to favor her-

Paul Atreides's picture

Finalize your preps bichez!

Temporalist's picture

No shit my sentiments exactly as I was thinking that just the past few days.  Incidentally the movie "Contagion" is available on-demand which is a good example of how government will lie, people will try to save themselves and their loved ones first, realtive peace turns to utter chaos in days and a list of other disaster scenario themes. 


Rogue Trooper's picture

Well Bitchez... 'cause this could turn into the FUBAR beyond all prevous FUBAR's earlier than we thought.

If you have not started... some introductory training for you city folk... not exactly, I hope, but you will get the drift!

Hope this was helpful....

orangedrinkandchips's picture



holy shit on a shingle....

White.Star.Line's picture

Gotta pay extra now for some of that "relatively" safe US Treasury paper.

Like signing onto the Titanic Lifeboat List.

Lotsa names, not enough boats!

zero19451945's picture

Dividend stocks make sense, just not at the levels they've been bid up to. I'd be buying hand over fist if the Dow ever drops significantly below 10K.

I can own a stock that pays 5+% or a US Treasury Bond that guarantees me a capital loss once inflations eats the coupon and principle.

Conman's picture

Or when that awesome divedend owning stock implodes, are you really getting a divdend or an ass raping? see CHK, ETN,  MCD, etc etc etc for all those safe dividend players that are well off the highs.

zero19451945's picture

Exactly. Just don't buy at these levels.

spine001's picture

Yours is a great strategy! The only problem is that the FOMC with B. Bernanke at its head has set up an unstable system that will not allow the Dow (DJI) to go under 10000 and stay there, the amount of liquidity they have injected in the system is such that a Dow 14000 is equivalent ot a Dow 8000 of 5 years ago, due to extra dollars available in the market. So there are only two possible stable points for the Dow (and sadly, many, many more unstable ones that can lead us to crisis and more wars), way down, to 1000 to to 20000, nothing in between. The reason for the 1000 is that the crisis will be such that the companies will stop producing profits for a long time, since liquidity will keep on accumulating in the the accounts of the top 0.0001% and less and less will be available to the bottom 99% that companies will not be able to restructure enough to survive, at least most of them. The dow 20000 will occur if they keep on injecting liquidity and devaluing the value of the dollar and they simultaneously mandatorily increase wages and rescue underwater homeowners and impose losses on Senior bondholders. Since this is the only way that inflation will occur. So take your pick, but don't believe that buying at a fixed level will help you out. Earnings and dividend distributions depend on people (the 99%) having money to spend... :) Never forget that...

Until next time,


Benjamin Glutton's picture

Bernanke channeling Lincoln and recreating the Greenback????

Bam_Man's picture

OK, maximum upside from here in a 10 year UST is 15% with 90% of that from possible capital appreciation.

Maximum downside is a potential loss of perhaps 80% or more in the event that interest rates ever "normalize". In an unlimited money-printing and high- (not hyper-) inflation scenario, a 90% loss would be entirely possible.

Buy US Treasuries at these prices/yields? No, thanks.

DavidJ's picture

15% upside?   The yields could go negative!!!!  (jk)

boogerbently's picture

....and the sheep would continue to buy them. LOL

Lost Wages's picture

I'm rich, beeyotch.

monopoly's picture

Not if rates rise but WHEN!!!....Then, game over. Period. Done.

buzzsaw99's picture

If they want another spate of mortgage refis they are going to have to do better than that. It would be ironic if after all this they crashed the market to save the economy.

Cangoroo's picture

They will never rise. Get used to negative yields and a wee bit of inflation. Bondholders are screwed in Europe and the US. Central banks and puppet banks will buy everything. QE forever.

HaroldWang's picture

THE only thing holding stocks up is the Fed. Period. This is a really scary time, kids. I can only laugh at anyone who thinks we're not going to spiral into a nasty recession - Fed intervention or not.

Spastica Rex's picture

I think with simple definition shifiting, perception management, and selective statistical reconfiguration, a recession will be easily avoided. Forever.

ParkAveFlasher's picture

second that.  frontal lobes are overpriced, if you know what I mean.

Sweet Chicken's picture

Serious question.


If you have a new mortage (less than five years) why not refi and save yourself a couple of points?!

Sweet Chicken's picture

Maybe I should have been a little more clear. What would be the downside if there are no closing costs to have the refinance done?!

eclectic syncretist's picture

5 more years until you own the place, unless you refi to a 15yr mortgage and save yourself a bundle.

Sweet Chicken's picture

I'm actually considering this but if I keep it at a 30 (sure I lose the years already paid in) but it will drop my monthly paytments almost 200 which will make month to month finances much easier to manage, plus it allows me that freedom wheile still having the option to pay more towards the principal anyways. Thoughts?!

buzzsaw99's picture

If you are making the payments and plan to continue to do so then there is no downside. Some people have no-recourse loans they don't want to give up and others haven't been making payments so they might not want a refi.

eclectic syncretist's picture

Why not?  Just be sure to refi with a company that won't sell your mortgage and set you up for ultimately getting screwed out of the home.  Third Federal is one that offers good rates and also prides itself on not selling mortgages to third parties.

Sweet Chicken's picture


Can you explain a little further how one could get screwed out of their home if their loan was sold to a third party?! I'm not completely dense but I'd appreciate a simple explanation on how they could achieve this without fraud.

yrbmegr's picture

If you're careful enough to remedy any technical defaults in time (and/or assert that no notice was given of any technical default, which is probably required to start the clock on time to remedy), then you probably can't get screwed out of your house.  But there are a lot of ways to technically default, and if the third party is diligent and litigious, and you're not, they might get a judgment against you.

Sweet Chicken's picture

 Great thank you for the insight, I appreciate it.

yrbmegr's picture

If you are ever threatened with foreclosure, get a lawyer and make the bank produce the properly executed paperwork proving they have the right to collect a debt from you.  Odds are, they can't.

Dr. Engali's picture

The U.S treasury is like the fat lady at the bar during closing time. She looks pretty damn good at the time but when you wake up you'll chew your arm off to get out from under her so you can get away.

doc_in_the_house's picture

Just SHORT COVERED my spx shorts

of 1365, 1370 and 1380...ALL @ 1332 !!! = $$$$$$$$$

don't care if they drop to 1320 tomorrow = START BUILDING long positions !!!

i spend about 2% of the total time of stupid daytraders and others (strategists) that spend 10 hours a day watching casino...i spent about 10 minutes a day...

Conman's picture

So basically you are saying BTFD. Lol amazing.

doc_in_the_house's picture

i coverd ALL spx shorts @ 1332

avg SHORT price = 1370..this DOG AIN'T GOING STRAIGHT DOWN...will happily reshort @ 1360+ and hopefully that will be the last breath b4 spx 1100...

don't understand "BTFD"

also what if aapl beats and casino rises tomorrow? i don't care if spx drops another -0.5%..= buy b4 the deadcat bounce...maybe i should be buying now, but i want lower prices...if pump..don't care, will just wait for 1360 to reshort....i called THE TOP @ 1380 baby!!


Conman's picture

Basically it means you are blindly buying the market just because "it always goes back up". That my friend is a poor trading strategy, although recently its worked if you buy the dip and sell out of your positions daily. It'll keep working until it stops, but when it stops working, look out.

Paul Atreides's picture

This is the part of the night when you are up a couple hundred at the casino and think you are on a roll, few hours later you will be walking out empty handed.

eclectic syncretist's picture

Volume is so pathetic I'd say wait until it picks up substantially before calling any sort of a meaningful bottom to trade off of.  Fundamentals are abysmal for going long here too, although a short squeeze isn't out of the question.  Congrats on the profits.