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by Ashraf Laidi
Posted: Sep 6, 2012 18:43
Comments: 27
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Draghi Buys Bonds, Fed Buys Time

Draghi's bond purchase plan keeps appetite supported & buys further time for Bernanke to delay its next QE
 
Sahid
ice age, French Polynesia
Posts: 464
2 years ago
Oct 7, 2012 13:39
cat
this is the industrial part of the yield curve.
Sahid
ice age, French Polynesia
Posts: 464
2 years ago
Oct 7, 2012 11:17
for sure bonholder have others objectives by holding treasury. Xi xinping will come in power and most are expected the privatization of state owned company. SAFE and the balance sheet are full of foreign treasuries and the negociation lies in confronting the variation of the yield with the stake of the companies with the transfert of technologies on the side of the chinese state owned companies.
Also holdong treasuries by china and others central bank like korea allow them to play arbitrages in futures buying of bullion.
So fondamentally the yield can rise without affecting the value of the loss of the treasury during this period . Cat, this move are quite rapid so it does not really affect the temporal value over the long term.
JPmorgan and Morgan Stanley manage partially on behalf of chinese companies their holding in treasury. so by hedging and playing put and straddle one can offset the loss of value in treasury.
cat0nip
Frankfurt, Germany
Posts: 1632
2 years ago
Oct 6, 2012 22:07
ah the yield curve long end... but it is astrology because bond buyers - foreign investors such as China-
have other objectives. Given that the Fed can set up a QE4 buying longterm bonds either by op twist or directly , yields cannot go up. Of course economy will not recover, either. This however will result in deflation of available USD. Is it that what the Fed is really up to? Makes sense.
If so the Fed would not want Romney.
GeorgeBensonOldGrey
France
Posted Anonymously
2 years ago
Oct 6, 2012 21:50
chartrology catnip plus the side effect of encounter of 30 years with ten years yield.

erratum catnip for yield capped at 2.94 in 2013 with next resistance at 1.82%

Lets say it still a pipesbag with drumbeats once the cup is full it serves for fullfilling others objects.
cat0nip
Frankfurt, Germany
Posts: 1632
2 years ago
Oct 6, 2012 18:38
the liquidity must find a way into pockets of workers but then we'll have price inflation. If Fed injected liquidity just blows up bank assets no economic growth can orccur. But given the Fed is the biggest buyer and holder of US treasuries, how can yields raise significantly?
GeorgeBensonOldGrey
France
Posted Anonymously
2 years ago
Oct 6, 2012 12:37
the more printing the more inflation creation but there is a but; if growth isn't present at 2013 then we can see deflation of us dollars on an abrupt way. the money printing is expected with global growth meanwhile the fed inject liquidity all across the globe and all across assets that make the prices going higher versus their counterpart in us dollars. we pass from 800 billions to 2.8 trillion in monetary liquidity in four years and it will come a time when the system will have to drain this liquidity from the system. if growth is not here and yield keeps on rising then we see the foreign holding of treasury losing value and thus fed will have to act during this storm by injecting liquidity in treasury then QE4.
if groth is present then yield will keep on rising and at this time one has to understand that Bernanke has stated that until 2015 he will not raised interestrate but doesnt opt out a raise in between at my opinion. this the two swords KENDO application by holding the adversary with the long and striking with the small.
when yield will begin to attain hte 3.25 percent with low interest rate then institution that borrowed at .5% will invest in their own yielding asset and prompting a raoatriation of money flow toward the usa. The Sovereign have already poured money in the american system compared to an outflow from Europe and that shows that some operation and big annoucement are underway in 2013.

like stated last weekend the yield rose and yes daveo the 2% will be attained any time soon.
Since the decision of going long the end curve of the treasury at 30 years , government institution that have access to the fed's window have earned billions. 50 basispoint on the 30 year long treasury.
http://www.youtube.com/watch?v=7U2ModhhI9k
GeorgeBensonOldGrey
France
Posted Anonymously
2 years ago
Sep 29, 2012 20:45
a wedge in formations over the next weeks months on us treasuries yield.
and or already formed waiting for hte ascending pattern to take form.
Sahid
ice age, French Polynesia
Posts: 464
2 years ago
Sep 18, 2012 12:21
daveO
heard jAmes Kotak on bloomberg stating that yield can go up without the interest rate to move and that occurs during the WWII whene the fed yield treasuries were up to 9% while interest rates stayed at 2%.
That means us dollar is the main carry trade currency with the japanese yen which is forming a descending wedge.
one question : when price dynamic is like that where is the need of intervention cause prices automatically respond to a behavourial aspect of the trading. Better save your ammunition.

Print some 20 scottish bill with the Exsangue Cunards.which house is printing it? wiggins teape or a scottish based.
DaveO
N.Cornwall, UK
Posts: 5733
2 years ago
Sep 18, 2012 1:06
George, pattern would suggest resistance at 1.99 and 2.12
GeorgeBensonOldGrey
France
Posted Anonymously
2 years ago
Sep 17, 2012 20:40
something is cooking on CL. another big finger.