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What Are Bonds Worried About That Stocks Aren't?

Tyler Durden's picture




 

Equity markets remain exuberantly willing to carry risk into the weekend on the "it's discounted" argument or the "Central Banks will save us" scenario. However, it appears investors are more anxiously buying Treasury bonds into the weekend as safe-haven flows continue (and Spanish bond yields press back up to 7%) and Swiss 2Y rates hold at -32bps. Euro strength on repatriation flows and stocks diverging from risk-assets in general make us nervous for this rally holding (especialy given the underperformance of financials from the open).

Treasury yields tumbling as stocks soar

but financials plunging...

 

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Fri, 06/15/2012 - 10:45 | 2529280 Calidreaming
Calidreaming's picture

The Central Banks can fuck themselves

 

Fri, 06/15/2012 - 10:46 | 2529282 vast-dom
vast-dom's picture

yes but not before they fuck the populace good and hard.

Fri, 06/15/2012 - 10:51 | 2529300 StackAttack
StackAttack's picture

and dry

Fri, 06/15/2012 - 11:03 | 2529345 tocointhephrase
tocointhephrase's picture

don't forget fat end 1st

Fri, 06/15/2012 - 11:14 | 2529384 distopiandreamboy
distopiandreamboy's picture

All central banksters should be eunuchs

Fri, 06/15/2012 - 11:18 | 2529396 Global Hunter
Global Hunter's picture

they are

Fri, 06/15/2012 - 12:55 | 2529730 THX 1178
THX 1178's picture

They will be when we're done with em

Fri, 06/15/2012 - 13:09 | 2529679 Kopfjager
Kopfjager's picture

I've long thought that central banks and sex toys have a lot in common.  Both require a little imagination to work and even at it's best, it's never as good as the real thing.  In fact, the only thing its good for is fucking people faster than humanly possible... Which makes gold the throbbing cock of civilization.  

Fri, 06/15/2012 - 23:42 | 2531357 jackbooted gauleiter
jackbooted gauleiter's picture

"throbbing cock"...

...not ususal for intercourse, indicative of blood poisoning, perhaps?

Fri, 06/15/2012 - 23:40 | 2531353 jackbooted gauleiter
jackbooted gauleiter's picture

That's a clever trick. They must have studied yoga extensively.

Fri, 06/15/2012 - 10:47 | 2529286 kindape
kindape's picture

might not be 'safe haven flows'. might be anticipation of some interest rate lowering directive by central banks

Fri, 06/15/2012 - 11:25 | 2529303 fuu
fuu's picture

I dunno but gold looks pretty happy right now, but not now.

Fri, 06/15/2012 - 10:54 | 2529311 fourchan
fourchan's picture

gold is going to rip with world wide qe.

Fri, 06/15/2012 - 10:55 | 2529314 junkyardjack
junkyardjack's picture

US equities are pretty weak as well. We're mostly being lead by consumer staples it seems VZ, PEP, KO, etc.  Tech is lagging and so are financials.  I think we're seeing the same rotation into safety in stocks

Fri, 06/15/2012 - 11:16 | 2529393 distopiandreamboy
distopiandreamboy's picture

The past two days reek of short covering.

Fri, 06/15/2012 - 11:00 | 2529337 kahunabear
kahunabear's picture

The only investor buying bonds is the Fed.

Fri, 06/15/2012 - 11:04 | 2529349 q99x2
q99x2's picture

Rare occurance that the Vix is up as stocks are up. Lookin green as the back of a tree trimmers pickup out there.

Fri, 06/15/2012 - 11:05 | 2529352 A Man without Q...
A Man without Qualities's picture

The markets are essentially broken.  Bonds are the place people invest, stocks are where they trade.  The banks are squeezing equities higher, as they believe (or know) that the central banks will bail them out if the shit hits the fan.

The view is, either pro-bailout parties get in - bullish, or Syrzia gets in leading to a massive stimulus boost - bullish.

Funny thing is, nobody is counting on the most likely outcome, which is the same as last time, i.e. no workable majority formed. 

Fri, 06/15/2012 - 11:31 | 2529444 Mark123
Mark123's picture

Good points, but I think most people are also traders in the bond market these days too.  The only investors left are pension funds, mutual funds and insurance companies....and they only invest because they are captive and they manage other people's money.

Fri, 06/15/2012 - 12:07 | 2529581 Plausible Denia...
Plausible Deniability's picture

Well said. I couldn't agree with you more. I am a money manager and I have never seen the market this incapable of discounting future events. CB intervention the world over has grossly distorted equity markets. Two weeks ago, the markets plunged, and rightly so, on a horrible jobs report. Since then, not one signigificant piece of data or news that has come out has not been negative. Not one. Look at the markets. The light volume and continual up bias in this market is incredibly suspicious. I laugh every time a bull makes "its baked" in argument. Just look at the euro. The euro launched at .78. The entire region is on the verge of collapse and its trading at 1.26. I also love the "markets cheap" guys. I urge everyone to go take a look at individual stocks. First, take a look at shit stocks, like Rim, nokia, BofA. Their PE's are shit, as they should be. Then, Apple excluded (which is a different story) go look at good companys with positive outlooks. Starbucks, johnson and johnson, Mcdonalds, Wal-Mart, Costco. Go look at the PE's and tell me the markets cheap. I'm at complete loss. My portfolios have been very conservative for a year and a half now, almost all gains coming from Vix contracts and oil and gas pipeline plays. But we have underperformed badly. Still, no way in hell I'm getting back in on any level until these prices come down drastically. The world, and the market, has truly lost its mind.

Fri, 06/15/2012 - 12:58 | 2529713 RiverRoad
RiverRoad's picture

"The world and the market" are playing a hot game of poker this Sunday, to be continued in Los Cabos.  I wonder who the patsies are?

Fri, 06/15/2012 - 14:17 | 2530097 amadeusb4
amadeusb4's picture

If front running the central bank/govt intervention is what is floating equities higher, then wouldn't the vampire squids of the world want the market to tank in order to bring on said intervention and get in at the bottom? It's hard to make money when you're already paying a premium for the event everyone expects.

Fri, 06/15/2012 - 16:20 | 2530628 twotraps
twotraps's picture

Plausible, great comment, not sure you are back checking hours old commentary but would like your opinion on the whole 'value thing', not on stocks per se, but in general with the high degree of manipulation overall.   So, I accept there is no precedent or easy answer but looking at such high govt involvement at every level, I wonder if they are not abusing the very core of the mkts....to decide the price, or value.  Everything from a student loan to the price of my house hinges on perception of value, mess with it and if there is Any semblance of a mkt left......it usually ends badly with a violent adjustment.  My feeling is that the govt is the biggest player with the most to lose via loan guarantees from the unions to pensions to bank accounts, transfer payments the whole show.   Maybe keeping the peace in the mkts, through intervention, is just cheaper for them in the long run cause they can shape the rules as they need to.  

Other than PM's, in the big picture, how do you protect yourself?  I agree in that I've been conservative and undeperformed feeling that the risk of violent adjustments exists and would rather participate aggressively instead of getting run over with the sheep.  Honestly, watching Dimon testify on a private bank loss??  Does anyone really know what is on the books of any bank??  But they're cheap?  It is so far from reality at this point.....even with a big move down to 800 in the S&P what would it solve?  Nothing, it'll just piss off the govt having to bail everyone out again, the debts of all the states running pretend accounts willl still be there.

 

Appreciated your comments, have a good weekend.

Fri, 06/15/2012 - 11:13 | 2529381 Obnoxio
Obnoxio's picture

Sovereign balance sheets are a horror show. There are some corporations with strong balance sheets. If the super-bailout happens the S&P could spike. I like gold but the Multi-Nationals will be like the cock-roaches surviving a nuclear war. They'll still be around whatever happens.

Fri, 06/15/2012 - 11:14 | 2529386 Mark123
Mark123's picture

The advance/decline is out of whack as well....this must be very specific trades to push up the indices.  Likely will fail later today.

 

Although I think Greece and how they vote is almost irrelevant, you have to be very brave or very well hedged over this weekend.  Better to sit it out in cash me thinks.

Fri, 06/15/2012 - 11:16 | 2529389 monopoly
monopoly's picture

I cannot even remember the last time I bought a main stream stock. Have no interest in this market until it is fixed. And that will be a while. 

Fri, 06/15/2012 - 11:25 | 2529426 HaroldWang
HaroldWang's picture

Does it matter? Stocks are going up as they did on QE1, QE2, Twist, LTRO, and on and on. And they'll go up on all this coordinated intervention announced this weekend or next week. 

No mystery, we've seen it all before.

Fri, 06/15/2012 - 11:32 | 2529450 Spastica Rex
Spastica Rex's picture

I see dead people.

Fri, 06/15/2012 - 11:34 | 2529457 slewie the pi-rat
slewie the pi-rat's picture

the rumors are fading on another week of trading

cash walks and digital bullshit talks

how will the mark-ettes respond when the centralBanksters announce there will be no concerted actions in the near future unless secret and unannounced?

Fri, 06/15/2012 - 11:39 | 2529472 Lucius Corneliu...
Lucius Cornelius Sulla's picture

In a deflation, those who preserve their capital win.

Fri, 06/15/2012 - 11:41 | 2529475 Mark123
Mark123's picture

There is no market.  The bankers have trained us to accept that we can make a living from skimming or front-running better than the next guy.  What a joke...we used to make things, save, invest, learn, train...now we let bankers rule the world and fight over the scraps. 

 

How would you like to know what the Fed will do next week?  That would be valuable info right?  So, they know (and all their crony friends)....and you think you are on a level playing field in this so-called market???

Fri, 06/15/2012 - 11:45 | 2529488 Lucius Corneliu...
Lucius Cornelius Sulla's picture

There are fewer investors willing to swim with the sharks.  But the sharks are still hungary so they will fight for the scraps and then turn on each other.

Fri, 06/15/2012 - 21:19 | 2531156 Bringin It
Bringin It's picture

Thank you Mark for pointing out what doesn't get enough attention.

Of course our country should not have a central bank/Fed/currency monopoly as it is an open invitation to corruption.

With all the obvious fraud and SEC, etc. watchdogs on the payroll and in the trani-porn does anyone really believe the massive power of the Fed is not tipped to FOB's?

If some people got away with front-running 9/11, you can bet your bottom dollar, informed entities are front-running the Fed.

It's all right in everyone's face and yet 99% don't see it.

Fri, 06/15/2012 - 11:42 | 2529480 SKY85hawk
SKY85hawk's picture

Am I missing something?  When yields go down bond prices are rising.  Short term it's a profitable move.

Why are you mixing apples and oranges? 

Sensational headlines s/b used responsibly.

Fri, 06/15/2012 - 11:47 | 2529497 onebir
onebir's picture

But why are 'safe haven' bonds being bought at the same time as 'risk asset' equities?

Generally the smart money is supposed to be in the bond market...

Fri, 06/15/2012 - 12:21 | 2529627 DUNTHAT
DUNTHAT's picture

<strong> M  A  N  I  P  U  L  A  T  I  O  N </STRONG>

Fri, 06/15/2012 - 21:24 | 2531160 Bringin It
Bringin It's picture

Maybe there's no one left in the stock markets?  Maybe it's all just algos on euphoria, while the bond market reflects the flight to safety concern? 

Is that summing up the obvious?

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