The End Game Approaches

[SlowDownFast]

The End Game Approaches

We're about done here folks.

By "done", I mean done with the government's ability to screw around with markets, game the outcome and hide the sausage, if you will, at least to any sort of positive effect.

Today we heard from The Fed that their threatened program to start buying the long end of the Treasury curve will begin tomorrow:

That was, without a doubt, prompted by this:



Notice the highlighted area.

The big drop (this is the 10 year Treasury rate) was when Ben made his announcement. But over the last few days the rate has crept back upward, erasing about half of the drop. While this is expected behavior (higher rates) when the stock market is on a tear (like yesterday) as people sell Treasuries to buy stocks, both Friday and today the market was down - but the Treasury market was also being sold.

That's not supposed to happen, but it did. It denotes selling - on a day when people should have been moving into Treasuries, not out of them. This compelled Ben to stomp on this trend lest he be seen as a toothless tiger, and that just won't do for Sir FedsALot.

Who's selling into Ben's "expectations" and producing this? Good question. I don't know, but Ben does - he has real-time Fedwire information that he doesn't release. I'm willing to bet it is NOT domestic holders, and is likely foreigners - including perhaps, central banks and their minions (Heeeeelllloooo China!)

This "acceleration" is a major problem, as it appears that Ben is losing control - rapidly. If foreigners are selling into the market we are literally nothing more than market recognition away from Armageddon in the bond market.

MORE:
http://www.tickerforum.org/cgi-ticker/akcs-www?post=88591&findnew#new

[formercia]

1. Buying toxic assets

anything is better than dollars. Buy tangible assets, regardless of value, before the Dollar becomes totally worthless and won't even buy a loaf of bread.

[girl gone mad]

2. There were two weak auctions, in the UK and US today.

On the heels of Volcker's comments last week, it's a bit concerning.

[LeftHandPath]

3. This is a good thing in my opinion...

Reward savers and punish increased debt.

Lets get rates up where they belong (for the risk) and lets get rid of all this bad debt.

We have plenty of banks.

We have plenty of homes.

This is one way to end our 2 wars, and pull in our 150 military bases.

[girl gone mad]

4. I agree to a large extent.

I think ending reserve currency status of the dollar would be the best thing that ever happened to us in terms of halting our harmful interventionist policies.

I also believe that attempting to prop up the financial sector and restore home prices back to inflated valuations are fools' errands.

Unfortunately, this administration doesn't want the inevitable decline to happen on their watch. They would prefer a return to the 90s credit bubble economy. So rather than attempt to create a more sustainable economy, they will probably keep doing everything in their powers to get it back to the way it was.

[westerebus]

5. 1990's. No. the 1930's . Yes. n/t

[truedelphi]

6. If only they had offered the inner banking circles another trillion or two today

Maybe the DOW might have broken 100.