Is today the beginning of the end?

[charliebrown]

I have been watching the interest rate markets for a long time, as I think they are key
to the end game. Once Uncle Sam cannot borrow a truck load of money for sub 3% interest is when the ballgame is over. I am not saying the ballgame is over at 4%, but perhaps this is the turning point for higher interest rates.

Today the 10yr is up 15 basis points, In addition the dollar is down sharply. .57 to 80.74. I have not witnessed this combo of events for quite some time. Is someone dumping treasuries?

In April with rates in the 3's, the dollar was rising. We shall see if this is a single day glitch or the start of a longer trend.

[blazespinnaker]

Re: Is today the beginning of the end?

Yes, they're dumping treasuries to buy the stock market. The two are generally inversely correlated. Nothing going on today is particularly surprising.

[ThePythonicCow]

Re: Is today the beginning of the end?

Once Uncle Sam cannot borrow a truck load of money for sub 3% interest is when the ballgame is over.

That assumes that the Treasury market is still a real market.

[charliebrown]

Re: Is today the beginning of the end?

No, not exactly true. for a long time it was stocks up, treasuries up, dollar down. Today has a different feel than I have felt for many months. I will start keeping a journal of such events instead of trusting my memory.

[charliebrown]

Re: Is today the beginning of the end?

I think the market is being manipulated, but it doesn't matter. Are you hinting that the fed or its minions can force rates lower? Will this work over the long run? As long as the checks the government writes cash, and can buy stuff at walmart all is well. I assume one day, unless interest rates climb that check is going to buy significantly less stuff. If interest rates do rise the gvt will not be able to finance itself through debt any longer.

I have been buying staples I don't need, because I figure soon money is going to be buying a lot less stuff.
The other day I bought 2lbs of screws for a project, I was doing that required 30 pieces. Screws are very useful and have a long shelf life. Ordinarly, these screws may last me the rest of my life. In the past I would have bought 60 screws (some for today and some for tomorrow) and jumped into my car to buy another 60 at home depot, 2 projects from now. I have also been buying a lot of other durables at garage sales and thrift stores even though I don't really need them right now. Isn't this how hyper-inflation happens?
When stuff is a better store of wealth than money saved at zirp?

[charliebrown]

Re: Is today the beginning of the end?

Oh P.S. a technical I use to look for buying / selling signalled sell on TLT on 11/11/10. This model works more often than not, maybe 60/40. So I would not bet the farm on it. I was never in TLT so I had nothing to sell. This does not mean buy TBT as this does not track TLT will over a long time period some kind of decay happens over long holding times. IEF 10yr treas has not signaled to sell yet. I don't own that either. I figured that 10yrs were too pricey a long time ago, bad call on my part. I only followed the itulip theme on gold to my disadvantage. I do own SHY.

[sunskyfan]

Re: Is today the beginning of the end?

For that matter ... is there a "real" market anywhere. Stock? Housing? Dollar? Gold? Silver?

[chedir007]

Re: Is today the beginning of the end?

Here's a technicals blog on "Government Bonds" - 11/30/10

http://blog.kimblechartingsolutions....se-govt-bonds/

I also remember reading some time ago that if the USD $ falls, and interest rates rise, it's a key turning point (implying China dumping treasuries)

[GRG55]

Re: Is today the beginning of the end?

Here's a technicals blog on "Government Bonds" - 11/30/10

http://blog.kimblechartingsolutions....se-govt-bonds/

I also remember reading some time ago that if the USD $ falls, and interest rates rise, it's a key turning point (implying China dumping treasuries)

Given how much the Fed has been manipulating the Treasury markets, how do we know the recent uptick in interest rates is nothing more than the Fed [temporarily?] not buying quite as many USTs?

It does not seem at all farfetched to me that the Fed sucks in the Treasury shorts and then hammers them by increasing its own purchases. Bankrupting, or at least putting the fear of Gawd, into those that dare short the Treasury market would seem a necessary part of the Fed play book...

[don]

Re: Is today the beginning of the end?

I guess we're no longer keeping our finger on the pulse of cardboard container production

[chedir007]

Re: Is today the beginning of the end?

Just an update: I signed up for Chris Martenson's site for a month (per XPAT's recommendation) yesterday while trying to understand all the posts on "oil backwardation".


Chris had a Dec 10th article about "Bond Market Rebels"- his takeaway is that recent bond market signals are certainly worth monitoring closely now but so far, bond prices are going down and US $ has been strengthening- which is not unexpected.

Hence, so far, no signs that USA is being sold although I also just saw Mega's post on Telegraph article.

[jpetr48]

Re: Is today the beginning of the end?

No not yet but the Telegraph article is the first warning shot fired over the bow. This past week there was release of an article from a Chinese official stating in so many words that once we get through the debt problem in Greece Ireland, Spain, Italy,UK then the focus will be on the US. There are too many dishes spinning and our day of reckoning is coming after the Eurozone gets restructured.
IMHO- this is all a process of buying time as the IMF World Bank and other central banks start preparing for a one world currency. As Las Vegas Ben is kicking the can down the road, there is a bigger world play in motion behind the curtains.

[sishya]

Re: Is today the beginning of the end?

No, not exactly true. for a long time it was stocks up, treasuries up, dollar down. Today has a different feel than I have felt for many months. I will start keeping a journal of such events instead of trusting my memory.

Yes that is what I guessed will happen a few
months ago. Dollar and stocks taking dive for the next
2 years. I am maxed in Gold and now saving money to
Buy house at $100/sq. Ft. Otherwise only Gold looks
promising now.

[jk]

Re: Is today the beginning of the end?

No not yet but the Telegraph article is the first warning shot fired over the bow. This past week there was release of an article from a Chinese official stating in so many words that once we get through the debt problem in Greece Ireland, Spain, Italy,UK then the focus will be on the US. There are too many dishes spinning and our day of reckoning is coming after the Eurozone gets restructured.
IMHO- this is all a process of buying time as the IMF World Bank and other central banks start preparing for a one world currency. As Las Vegas Ben is kicking the can down the road, there is a bigger world play in motion behind the curtains.

don't hold your breath for the eurozone problems to get sorted out. it's going to be quite a while. the dollar has what looks like "support" from the euro problems, but all the pieces of confetti are falling, just at different and variable rates.

[thriftyandboringinohio]

Re: Is today the beginning of the end?

Most of our IRA monies are parked in Treasuries (her employer's plan has no cash options, just an assortment stocks funds and bond funds).
They still look like the least ugly option to me, and don't seem shakey enough yet to justify the taxes and penalties for early withdrawal.