“There’s something of a mass psychosis going on related to the so-called starvation for yield,” Gundlach, whose firm manages $102 billion, said during a webcast Tuesday. “Call me old-fashioned, but I don’t like investments where if you’re right you don’t make any money.”
I'll probably replace some of my GTC orders that were hit on DTYS soon--in the 10's--low has been 9.95 so far and my next GTC is 9.79 if memory serves. I've look at some other stuff--don't want leverage--even the charts of SJB and IGS are similar to DTYS and TBF, so will stick to the later 2. Playing the likelihood of the 226 year low in bond rates will hold at some point soon (LOL). No chart, ratio or other nonsense necessary. I will say that silver and gold in lockstep with TLT and long term gov't bonds seems harmful to PM's rally, eventually. Would not touch PMs at this point except to hold some physical.
Here is the broadest definition of the term from Jefferies: "The important distinction of helicopter money compared to QE or conventional deficit financing is that it is a combination of extreme monetary easing and fiscal relaxation."
More from a just released note by Jefferies' Sean Derby titled "Japan: An Equity Investor's Guide To Helicopter Money" (we will say more on this later):
We believe Japan is closer to introducing helicopter money than consensus believes as the tapering of its JGB purchase program forces the BoJ to seek other routes to stimulate growth. Although the BoJ could accelerate buying of asset classes, there are worries over diminishing returns. Moreover, negative interest rates on deposits is deeply unpopular amongst the banks and seems to have been ill thought out.
LOL--yep beat those low yielding bonds back, Benron!!
Great chart at that site showing the Fed's only REAL mandate and how successful they have been especially after Tricky #$%$ took the USA off the gold standard.
That inflation, or devaluation of the US dollar, will eventually lead to a new bear market in treasuries. Nobody is going to ring a bell at the top of the TLT or other Trashury chart. Only way to capture the low is to buy the inverse funds to average into it.
The bear treasury funds, that are not leveraged if possible offer the best vehicle for what is coming. The FED has enjoyed the omnipotence from the 36 year bond bull but the tide will go out and their misdeeds will be exposed.
Gold and silver are mere commodities that will fluctuate on the vicissitudes of hedge fund excesses. Gold and silver miners are STOCKS that offer no security and many could go down just like any other stock. Currencies are confetti that run the strength of one day into the ground the next. But a bond bear of 20 years or more seems guaranteed in light of the constant Fed proclivity of throwing the US buck under the bus to try to stave off disintegration of all its manipulations. Eventually the dollar will revolt and move higher and the bond bear will be ON!
My theory is the general view on how much influence CBs have over interest rates has been greatly flattered by bonds being in a bull market for an epic 36 years. If I'm right, the start of the bear market in bonds, historically likely to last at least 20 years, will lead to a reassessment of which of the bond market & the CBs is the dog and which the tail. Only one way to find out for sure though :-)--Springheel Jack
Also for WE July 8, 2016:
Curiously, at least for the week, economically-sensitive commodities, including energy (crude down 7.9%) and copper (down 4.6%), were hammered, especially in comparison to the precious metals.
Dec’17: first FOMC meeting which market assigns more than 40% probability of rate hike
659: number of global rate cuts since Lehman bankruptcy
$12.9tn: outstanding amount of bonds currently yielding less than 0% (= 29% of total)
$24.6tn: outstanding amount of global central bank holdings of financial assets
-1.1%: the most negative bond yield in the world (3-year Swiss government bond)
107 years: time it takes to double your savings in 1-year US deposit account
1387 years: time it takes to double your savings in 1-year German deposit account
6932 years: time it takes to double your savings in 1-year Japanese deposit account
5.7%: level of investor cash as % AUM (Jul’16 FMS), highest since Nov’01
$1.6tn: level of cash at US corporate sector, near record high
1978: the year US labor market participation rate was as low as it is today
21,084,000: current number of unemployed men and women in Europe
49%, 45%, 39%: youth unemployment rate in Greece, Spain & Italy
0.16%: the infinitesimal increase in Japan’s real GDP in the past 8 years
25%: annualized YTD return from global government bonds in 2016, a 30-year high
July 6 – Wall Street Journal (Min Zeng and Christopher Whittall): “Christopher Sullivan, a money manager in New York, is worried that when he needs U.S. Treasury bonds one day, he might not be able to get them. On the surface, the concern might seem unwarranted: The U.S. Treasury has $13.4 trillion in debt securities outstanding, making the U.S. bond market the largest in the world and Treasurys among the most easily traded asset classes… A buying spree by central banks is reducing the availability of government debt for other buyers and intensifying the bidding wars that break out when investors get jittery, driving prices higher and yields lower. The yield on the benchmark 10-year Treasury note hit a record low Wednesday. ‘The scarcity factor is there but it really becomes palpable during periods of stress when yields immediately collapse… You may be shut out of the bond market just when you need it the most.’”
Of course the "spending binge" is the bankstas driving down yields and driving up stocks through leveraged derivatives these days :) Government covers it all with massive welfare/redistribution/disability pmts to keep the masses pacified.
That's right, the banks, starting with the Federal Reserve, caused a massive -- credit induced -- spending binge.
The Federal Reserve Governor at the time, Benjamin Strong, administered what he called "a little coup de whiskey to the stock market." He sold the dollar, purchased hefty amounts of Treasuries [think QE], and extended cheap credit to the masses.
Unfortunately this "little coup de whiskey" produced a drunkenly distorted economy. And when the bills came due the banks could not recover their loans. And depositors lost their savings forever.
Adolf Miller of the Federal Reserve Board testified to the Senate Banking Committee in 1931 that this episode constituted "the greatest and boldest operation ever undertaken by the Federal Reserve System and, in my judgment resulted in one of the most costly errors committed by it or any other banking system in the last 75 years."
Looks like we are forming a head on the reverse head and shoulders for DTYS. How low we will go is of course unknown and may become more apparent tomorrow when we get the unenjoyment report that every banksta lives for to manipulate the beejeebers out of us all. the finviz site has a nice chart on the daily of the formation for DTYS--I would suspect the eventual next shoulder to come around coronation time for Killary, when Bill finally becomes our first lady.
The gold:miners ratio has now plunged down toward 12 after being as high as 27 earlier this year. Probably the greatest crash since 1929. My guess would be that a range will be established between 12 and 18 as a "normal" range for the GOLD:XAU for at least a few years--kinda like 4 to 8 used to be before 2008. The MACD is signalling some kinda change that may be initiated tomorrow on the big day for bankstas--who know?
Anyways got orders down to the low 8's for DTYS and low 18s for TBF just in case. Got some DTYS and TBF now and would hope to add. Supply of trashuries will become an issue by the time her majesty is sworn in and another QE will accent the travesty of it all.
The bond market has collapsed so badly in recent months that dealers no longer make any effort to mask their pessimism. Requests to discuss the bond market with traders are met with such responses as: Call back next year. What bond market? Or, are you wearing a life preserver?
''The bond market today is in the greatest bear market in the history of the United States,'' said Seth Glickenhaus, director of Glickenhaus & Company, investment advisers, and a bond trader for 40 years.
''We will not buy a bond beyond a five-year maturity for our clients, except for speculation purposes. Anyone who buys a bond today to hold for more than five years is out of his mind and you can quote me on that.''
"Yields on 10- and 30-year U.S. Treasuries fell to records as bonds surged around the world -- a move Mohamed El-Erian says points to slower economic growth ahead.
The 30-year bond yield dropped as much as 10 basis points to an unprecedented 2.1873 percent, while benchmark 10-year yields slid to 1.3784 percent." --Bloomberg
You can get 24/7 quotes at Bloomberg Markets US Generic Govt 10 Year Yield USGG10YR:IND
It has recovered back to 1.43% at 8:29 7/1--buying opp restricted to the choice few bankstas.
Yields on the 10 year are plunging again--Bloomberg generic ten year yield showed a spike down to around 1.37 in the early AM. That would be a new all time low for the 10 year US trashury yield. So some more happy hunting for the bear funds--next targets 10.49 on DTYS and 20.49 on TBF--enjoy the holiday WE.
Well at least in the early AM this June 29, as it tries to exceed the BREXIT spike. Who knows really and who cares (although I have plenty of silver coins). I see so much about how it was in 1977 or 1979 or 2008. It ain't at those prices has much more risk and no chart tells you anything about the future.
Got my first tranche of DTYS at 10.99 and while it didn't make the barchart site all time low list yesterday (6.28.16), here are some that did, replete with plenty of bond bear funds:
DLBS Ipath Long Bond Bear
DRV Real Estate Bear 3X Direxion
REK Short Real Estate Proshares
SRS Ultrashort Real Estate Proshares
TBF Short 20+ Year Treasury Proshares
TBT Ultrashort 20+ Year Treasury Proshares
TBZ Ultrashort 3-7 Year Treasury Proshares
TMV 20+ Year Trsy Bear 3X Direxion
TTT Ultrapro Short 20+ Year Trsy Proshares
TYO 7-10 Yr Trsy Bear 3X Direxion