Friday, May 18, 2012

2012's Anti-Bondmageddon!


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Behold the anti-mass exodus into nominal treasuries! (New 1.7% low hit yesterday.)


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Gaze in wonder at the panic into inflation protected treasuries! (New -0.39% low hit today.)


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Gasp in amazement at the violently unchanging inflation expectations! (Inflation expectations locked at Fed's new public target of 2%.)


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Tremble in fear at the lack of uncertainty! (The Fed has the yellow dot pretty much right where it wants it.)


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Stampede in confusion at the new normal's implications! (And/or quietly capitulate.)

See Also:
Bondmageddon Is Here!
2012's Bondmageddon

Source Data:
FRB: Selected Interest Rates
U.S. Treasury: Daily Yield Curve

4 comments:

Troy said...

this newsletter was posted at hcn just now. . .

coulda written every word, except I'm not particularly bearish on China I guess.

Stagflationary Mark said...

Troy,

I think we're pretty much seeing the same thing.

There is one exception though. I am particularly bearish on China (and therefore agree with Jim Chanos).

That said, if we agreed on everything then one of us would be redundant. ;)

Troy said...

Being a good physiocrat, I just like countries that can feed themselves.

China was just such a tough place in living memory that I don't feel comfortable expounding on its prospects going forward.

These people went through hell 1900-1975.

A housing bubble fallout is peanuts compared to all that.

Demographically, their family planning policy is going to put them in a much better situation compared to India (google graph).

They're coming from such a low place that I don't really see any headwinds in their future.

But the rise of a Russian-style oligarchy ripping off the masses is one threat to their general welfare I guess.

Stagflationary Mark said...

Troy,

But the rise of a Russian-style oligarchy ripping off the masses is one threat to their general welfare I guess.

If not for their growing income inequality and ongoing corruption, I would not be as bearish.

Many Chinese people believe the allegations against Bo reflect widespread problems of officials and their families mixing power and profit - using political privilege to accumulate wealth far beyond the reach of ordinary citizens.

Those same things contribute to my bearishness here too of course.