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OfflineTerillius
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Registered: 07/21/06
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Bond Rage
    #21761650 - 06/04/15 01:09 PM (8 years, 7 months ago)

What the hell just happened to bonds? (~April 27th)  :mad2:

Bonds are safe they said.  Nice and stable they said.  Boring and low yield, but you won't lose 8% poof just like that.  Fuck.

Rage aside... what happened?  Bonds were overpriced?  Flood of new bonds?  Interest rate worries?  WHAT?!?!

http://finance.yahoo.com/echarts?s=BLV+Interactive

http://www.wsj.com/articles/u-s-government-bonds-weaken-with-new-debt-sale-1430227247


Edited by Terillius (06/04/15 06:51 PM)


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Invisiblememes
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Registered: 01/11/05
Posts: 27,785
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Re: Bond Rage [Re: Terillius]
    #21761852 - 06/04/15 02:09 PM (8 years, 7 months ago)

i noticed after i got home from my concert last night that europe was acting weird, and the bunds were ragin'

passed out, not thinking much of it.  woke up, went to work, did the day, was reading cnbc on the way home and was like "oh yeah.  bonds were fucked last night, weren't they?"





They've been talking about bond liquidity for a minute now.  In these super-perverse situations it's not surprising to come into contact with a circumstance where there just ARENT buyers (or sellers).  It's like "no, why would I be on the other side of this trade?  I wouldn't."

And they aren't.  And when the market is leaning that hard, prices move far, fast.


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InvisibleLunarEclipse
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Registered: 10/31/04
Posts: 21,407
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Re: Bond Rage [Re: memes]
    #21762676 - 06/04/15 06:34 PM (8 years, 7 months ago)

The fact that the 10 year Bund hit 0.05% interest rates at the recent low yields and actually negative out to 8 years was absurd.  Now it's a big deal that the Bund was testing 1% yesterday.  Sure it's a big move from a ridiculously low rate.

Liquidity is an issue when the central banks do most of the buying, selling is another thing entirely, and you don't have a lot of volume on both sides like you used to.  For such a big market, it's become relatively thin, and like last October, can be driven around big time in a day and then back the other way the next day.  That ain't good as they say.

One would "have to" believe the 2.4% rate yesterday on the US 10 year might be the high on it's way maybe back to 2%?  Even though "real" inflation particularly the Obamacare "inflation" that doesn't get figured into core CPI along with food or energy is more like 4% a year and not under 2%, growth is horrid.  The economy is in the toilet, seriously.  We are already in a recession.


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Anxiety is what you make it.


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InvisibleStonehenge
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Registered: 06/20/04
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Re: Bond Rage [Re: LunarEclipse]
    #21766994 - 06/05/15 06:04 PM (8 years, 7 months ago)

We never got out of the last recession, not really. The unemployment figures are a pack of lies, jiggered every which way to make them look better. Inflation is much higher than stated and this is the end of the good times. Bad times lay in wait and will make you think now was great. I've been talking about a financial meltdown for a while, lots of others have been too.

I saw a funny thing in the paper. They said people were trying to talk yellen out of raising interest rates later this year. The are putting on a puppet show for our amusement. Yellen has no intention of raising any rates, all she does is talk about it. Later, she will agree with those saying to hold the line. Otherwise, the house of cards falls apart. Reasonable interest rates will doom the debt economy. The sad thing is most of that debt went to stupid overseas wars that the American public was against and which did us no good at all. Now they are trying to start a war with Russia or china.


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“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835)

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