Seeking Alpha

Gary Tanashian's  Instablog

Gary Tanashian
62,071 Followers
41 Following
Send Message
Gary Tanashian is proprietor of Biiwii.com. Actionable, hype-free technical, macro economic and sentiment analysis is provided in the premium newsletter Notes From the Rabbit Hole (http://www.biiwii.com/NFTRH/subscribe.htm). Complimentary analysis and commentary is available at the 'Biiwii Blog'... More
My company:
Biiwii.com's Notes From the Rabbit Hole
My blog:
Biiwii.com's Notes From the Rabbit Hole
  • This Is Not Good... 10 comments
    Nov 20, 2009 8:39 AM | about stocks: SHV, SHY, IEI, DIA, SPY, QQQ
    Stock promoters do not want you to look at this chart... the government does not want you to look at this chart... As risk rises, the t-bill generally rises (its yield declines) and well, there ain't no 'less than zero' involved and if there was, it would seek it out. You know, frightened money might actually pay for perceived safety.



    Each time the Fed has met (and pretended to have a decision to make) during the supposed recovery, I have posted an updating chart of the t-bill yield ($IRX) with its implications stating that there is no decision to make. There is no real recovery either.

    Unfortunately, all too many just go with the flow. They are the dumb money and that money is dumb for a reason.

    I would like to know who, in this grand rally and economic recovery environment, is so scared they have just got to get themselves more t-bills? The lower panel is the TED spread, between t-bills and eurodollars which NFTRH used as a bullish indicator back in Q4, 08. Now, it is turning up and that squares with the message of the nominal t-bill.
    Themes: t-bills, stock market, us treasuries Stocks: SHV, SHY, IEI, DIA, SPY, QQQ
Back To Gary Tanashian's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

This post has 10 comments:

Track new comments on this article
  •  
    Fear is back.
    20 Nov 2009, 10:36 AM Reply Like
  •  
    Nothing to see here!
    Nothing to see here!
    Move along!
    Move along!
    20 Nov 2009, 10:42 AM Reply Like
  •  
    Hair on fire!
    20 Nov 2009, 10:47 AM Reply Like
  •  
    If the TED spread continues to widen, doom for the stock market.
    20 Nov 2009, 11:01 AM Reply Like
  •  
    Comments on Comedy NBC from several talking heads say it is not a flight to safety. They say the hedgies, money managers et al have had a decent gain this year, their jobs are now secure and they say why risk losing it all by leaving it in equities. So they rotate to various shorter term T-bills. They note that the large volume is in bills that expire /after/ the end of the year.

    So their profits are locked in, they get a small yield for the duration, they sit back and eat candy bars for the rest of this year. When next year starts, they have the sugar high to energize them as they begin the struggle anew.

    Credible? I'm too ignorant to know. But I do like the sound of it. Nobody is going to go for long-term bills with inflation /expected/ by most down the road and nobody with a job on the line would want to risk the /expected/ and /anticipated/ correction killing their performance review in the last 7 weeks of the year.

    It's like being a government employee in a way - do at least good enough to not be fired.

    HardToLove
    20 Nov 2009, 11:14 AM Reply Like
  •  
    HTL: Profit Taking/Tax loss selling and redemptions/dividends. Keep it in cash equivalents for ready use. Another attempt to sensationalize a normal occurance.

    If It actually were to forecast Doom, money would not be flowing here. It would be going into Shorts.

    This is about as Bullish as it gets.
    20 Nov 2009, 11:23 AM Reply Like
  •  
    Thanks Freya! Added a bit to my growing store of tidbits learned!

    HardToLove


    On Nov 20 11:23 AM Freya wrote:

    > HTL: Profit Taking/Tax loss selling and redemptions/dividends. Keep
    > it in cash equivalents for ready use. Another attempt to sensationalize
    > a normal occurance.
    >
    > If It actually were to forecast Doom, money would not be flowing
    > here. It would be going into Shorts.
    >
    > This is about as Bullish as it gets.
    20 Nov 2009, 11:45 AM Reply Like
  •  
    On top of all factors mentioned by the commentators here, there is also lots of balance sheet unwinding from dealers. That t-bill chart posted here is very sensational, simply because the absolute level of rate is near zero. In almost all other rate environments the same pattern held: t-bill rates traded well bellow the generally collateralized (GC) borrowing rates when times approached year end.
    21 Nov 2009, 01:27 AM Reply Like
  •  
    This bullish argument has some logic I suppose. But it sounds to me more like rationalization. A good story for year end compliments of financial news.

    Yes, this bull has been feeding off of bearish sentiment all the way up. That is a sign of the over done extreme of last year's downside. But if the underlying fundamentals were so good, why then has the t-bill yield been in effect, zero all year? As someone mentioned, the chart is sensational. We are just a teeny closer to zero then we were last month... and the month before that... and the month before that...
    21 Nov 2009, 07:46 AM Reply Like
  •  
    I wonder if it has anything to do with a Fed Funds rate varying between 0.0% and 0.25%?

    3 month LIBOR has been going down all year and is approaching 0.25 as well which is probably why we are:

    "We are just a teeny closer to zero then we were last month... and the month before that... and the month before that"
    22 Nov 2009, 01:53 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
Posts by Themes
abby cohen, agriculture, alcoa, almaden minerals, alternative energy, aluminum, apple, asia pacific, au ex ventures, bailout, banks, barney frank, bear, ben bernanke, beranke, berkshire hathaway, bernanke, bkx, black swan, bonds, brent cook, bull, bullionvault, bullish divergence, canada, candlesticks, canroy, carl jung, charlie munger, charts, china, clean coal, cme, commitments of traders, commodities, congress, consumer credit, copper, copper stocks, cpi, crash of 1929, credit contraction, crude oil, currencies, currency, dax, debt, deficits, deflation, democrat,
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.