I don’t know about you, but I smell the odeur of week old fish in what happened to the stock market Friday.
Since I don’t do well posting illustrations within an article, you’ll just have to take my word for it.
tyx-30-year-treasury-bond-yield-long-term-chart.jpg
I note that it didn’t post (which I figured) but at least you can get to it to see it.
Note that the 30 year Treasury bond has been steadily appreciating (in cash value) and yield decreasing for 16 years or so and suddenly, has , in the short term, steadily been losing dollar value as yields creep up – first 2.8%, then 2.9% and as of Thursday PM, the 30 year bond stood at 2.99%, just about as close to 3% as it has seen in months. Day before yesterday, intraday, it yielded over 3% for a few minutes.
I don’t think Bendover Bennie wanted the long term rates to close at or above that 3% or it might look like it would go to 3.2%, then 3.4%, 4.1% and so forth and so forth, upward and onward into the realm where interest payments on the U.S. Debt approach or exceed GDP and then “Game Over” . Not to be allowed; but it will eventually happen in spite of his best efforts to suppress it!
I think the Feds and the Banks engineered a Market selloff of 200 points in order to drag things back down a bit, sinking everything including gold, silver, commodities and long term bond yield in the process.
Downdrafts like Friday tend to take everything down with them, regardless of whether it deserves to be taken down or not. Traders and hedge funds run for the exits and with the crony banks and the Fed selling into the already nervous stock market, it guaranteed a breather for long term rates. For a short while. It’s always a short while and then they will have to do it again.
If you or I were rich enough or connected well enough to do that, they’d toss us under the jail, pour cement to block all exits and feed us every other day through a straw in a crack of the concrete.
So, I suggest we lean back, hold the defensive positions you have and wait for things to reverse and come back. Your defensive holdings will come back faster than the general markets so just sit tight.
I’ll guarantee you one thing, if this was not an “on purpose” sell off engineered by the Fed and crony banks and brokers, on Monday, Bennie the Boob will start open the QEternity valves and by flooding the market with buy orders, drive it back up. Since that didn’t happen at the end of session Friday, I doubt it’ll happen Monday. I think Bennie and his Printer Players would like to see a minor crash, just to relieve pressure on those Long Bonds and Bills. I think 3% Long Treasurys are a line in the sand he does not want to see crossed and will fight tooth and nail to try and prevent it.
He will eventually lose, but never underestimate the power of the least worst currency to be a safe haven of last resort, especially as things continue to go to pot and credit and exchange controls are slipped into place as time passes to force U.S.citizens to hold a dying currency and prevent foreigners from running away.
The stage is set, the actors have been practicing their lines for years and we may be about to see the play begin.
MuckAbout says:
dammit.. That’s “time passes” not “tie passes”…. Note to self: either learn to proof better or quit posting! dammit.
MA
Like or Dislike:
4 
0
20th October 2012 at 6:22 pm
Administrator says:
Muck
Fixed it.
Like or Dislike:
2 
0
20th October 2012 at 6:41 pm
Muck About says:
Admin:: tanks..
MA
Like or Dislike:
3 
0
20th October 2012 at 8:16 pm
Eddie says:
“never underestimate the power of the least worst currency to be a safe haven of last resort”
You said it, not me. But I’ve had it beaten into me by the markets over the past two years, and I believe it.
Like or Dislike:
3 
0
20th October 2012 at 9:02 pm
Leobeer says:
My take on it. The USD was due for a mild bounce which we got. USD up, then everything else is usually down. There is a FMOC meeting on Wednesday. Around then we should see the dollar tank again. DJIA and gold will have a big jump up going into the election (for obvious reasons) and will hit new highs before New Years.
Like or Dislike:
0 
0
20th October 2012 at 10:07 pm
Muck About says:
@Leobeer: Making predictions with a time attached is prohibited here on TBP. We make open ended predictions that one cannot prove or disprove or we predict the same thing over and over until it actually happens and then crow how RIGHT we were!
Get with the program!
MA
Well-loved. Like or Dislike:
8 
0
20th October 2012 at 10:11 pm
Colma Rising says:
It’s going to be the big moves which will allow one to jump the seesaw between the stock markets and the bond markets…. and maybe scoop up some bling bling in between.
(ie: selling a portion of SH and picking up some TBF on days like Friday, and vice-versa….)
The ridiculous part is that shit like this may be the only way to secure some sort of real yield from these fixed-markets. Obviously, with high P/E’s and overpricing in stocks fucking their yields, a 3% Treasury looks attractive to hold so one doesn’t have to hawkeye the market all day and day trade inverse-leveraged funds.
Is it me, or is the effort like chancing rides in a broken elevator and hoping to jump a millisecond before impact when the fucking thing breaks?
Thanks for the input, Muck…
Like or Dislike:
0 
0
20th October 2012 at 10:27 pm
Colma Rising says:
Muck’s mysterious image….
Like or Dislike:
1 
0
20th October 2012 at 10:28 pm
Leobeer says:
Very funny Muck, I made a closed ended prediction and it is very unlikely I am wrong. Should I be wrong and you or anyone else cares to point it out I will call you an asshole and still be the winner.
Like or Dislike:
4 
0
20th October 2012 at 10:30 pm
Ron says:
Id never imagine any kind of bounce or false reports to make things look good just before an election.
Like or Dislike:
1 
0
20th October 2012 at 11:30 pm
Bob says:
Here’s a quote from a trading blog I respect:
“Traders are getting out of the market ahead of the election and taking their profits for
the year. The top for 2012 is in and if you want to keep anything you made you best
get out of the long side of equities now…”
Like or Dislike:
1 
0
20th October 2012 at 2:10 pm