SW Richmond

Bond Expert Monday Outlook: Positioning for the Week Ahead

Lots of issue this week. Money out of stocks and into Treasuries. Ho-Hum. Just about the time a bunch of us realize this trend is tradeable, they will change it.

Pass the popcorn.

Bond Expert: Wednesday Wrap

Pump up the stock market so banks can issue new shares at inflated prices and drag mutual funds into the game, then crash the stock market, steal the money and and force what's left into Treasuries. Didn't we just do this?

When did you say the long Treasury issues auctions were? 10-year on June 10th? Citi had better hurry up with their stock sale.

On 26 May I predicted a stick-save in the Treasury market:
seekingalpha.com/autho...

At that time TNX was 3.55 (and headed rapidly north). That's where we are now. The stick-save is forming, we're starting to see it in the PR campaign about Timmy's visit to our new bosses in China and Bernanke's ridiculous statements about fiscal responsibility. I think it was evident, too, in the gold smackdown / USDX boost today.

Since Treasuries are the final bubble, the intervention here MUST be covert, not overt as were the bank and carmaker interventions. On 22 January, before QE publicly began, I wrote this article:
seekingalpha.com/artic...
I made this statement: "Once committed, monetizing Treasuries cannot be taken back. It is a blatant and public admission that the US Government is bankrupt and cannot pay its bills without printing. There is no other logical way to interpret the fact."

"Ben, do not cross the Rubicon."

The Chinese get it.

I'm not even a financial professional, and even a rube like me knows that printing money and loaning it to yourself at interest is idiotic and self-destructive.

One more stick save, then who knows?

Bond Expert Tuesday Wrap: Something's Afoot

Ben is the guy that drove the ten year to 2.5%. The ten year is headed back to 4.5% where it came from. THEN we can start talking about a blowup. THEN we can start talking about "show up or shut up" intervention. Wake me up when we get to 4.5%.

Bond Expert Tuesday Wrap: Something's Afoot

I've been wrong before.

I think they're messing with our heads. We've been through this emotional cycle so many time already. I think they already know what they're going to do next to stick save the Treasury market (I wrote an article just today on this very subject) here
seekingalpha.com/artic...

I had titled the article "Treasury Theater" (you can still see it in my instablog) and for some reason the SA editors changed it to "Steer Clear of Treasury Auctions". I think it IS theater. These episodes are part of the confidence building plan.

As the crisis goes on, the episodes get more and more complex and serious; this is only our first real Treasury dustoff since QE was announced. They have a plan. One of these times the plan won't work, but my gut tells me this ain't it. And after this one is over, everyone will start talking about how the Treasury market survived a crisis, and the doomsayers were wrong, and the full faith and credit of the US government is as good as gold, and the Treasury market is the envy of the planet, and blah blah blah.

Wait and see. Popcorn, anyone?

Bond Expert: Friday Wrap

John,

Isn't the timing of today's revelation by China's of its secret gold buying interesting?

"Hi, this is China. We just wanted to say "Good luck at the Treasury auctions next week."

Bond Expert: Thursday Outlook

Japan is trying to pay foreign workers to leave.

Anyone expecting anything other than a managed successful result for the upcoming, closely-watched $100 Billion Treasury auction is in for a disappointment. Is it even possible to tell who is buying what for whom? Do the primary BD's have to disclose what they buy for clients vs what they buy for "their own accounts"?

A failed Treasury auction is not in the cards.