I think treasuries must be benefiting from people bailing out of these things. Monster rally the past two days.
This is why I've had so much trouble being bearish on treasuries -- when people start bailing out of hundreds of billions (trillions?) of dollars in garbage debt and grossly overinflated equities, where do they go?
At least you know the government can pay it's debt off by printing money.
That's better than nothing -- you can start a fire and keep warm, or take notes with a Sharpie in the worst case scenario.
You seem to have caught a case of black sarcasm recently dryfly. Anything in particular the cause?
Andrew - I felt the same way working rural Minnesota & Iowa in the run up to and through the farm crisis... you knew it was getting bad, you just didn't know how bad or how long it would last. There wasn't much else you could do other than laugh at it.
mp, Devlaney is trying to beat the ratings agencies' downgrades to the market. Lookin for another GF bagholder to be the last to hold the hedgie's bag, so he doesn't get caught holding it at the end. This won't be the last weasel selling radioactive waste...
The yield on the benchmark 10-year bond slid 6 basis points to 1.9 percent in Tokyo as of 11:01 a.m. at Japan Bond Trading Co., the nation's largest interdealer debt broker.
Funny to hear about people lining up to buy bonds that yield 1.9%
That said, I could see converting dollars to buy these things.
The Yen could rally God knows how much against the dollar when the carry trade undwinds.
OT: Bloomberg reports that Australians have purchased $7.7 BN in US real estate in the past year. Comment was they go for non-trophy properties in places like Pittsburgh.
"The consumer continues to be plagued by pressures on discretionary spending from gas inflation and housing deflation..."
I think this is why some analysts claim that rising oil prices are deflationary - they take money away from discretionary spending, and we're a discretionary spending kind of economy.
"June results sound like they're tracking on the lower end of expectations on the heels of a lackluster May," according to Goldman Sachs analyst Adrianne Shapira.
"While the weather has been accommodating, it seems as if the customer has taken a pause," she said.
In stressful times like these, it's often beneficial to pause for a moment of reflection. Here's David Lereah, advising us last year to buy condos in Florida.
Heavy Fuel time- when my ugly big car won't take this hill I'll write my suicide note on the hundred dollar bill...how many hedgies are thinking that line might just be their fate- screw the investors, the lenders are starting to snatch and shop the collateral.
I see the nikkei has lost one percent before lunch and the yen is lurching higher...
Well, even Shrub is saying it-
Someday this war's gonna end...but first we have to go all the way up the river....
tj, the show is more than interesting. I just hope it doesn't become too interesting. Maybe that's why my conjure bag is cowering in the corner, trembling.
fafhrd - did you notice in that article on Japan Reserves - Ito suggested they go into stocks & corporate bonds? After than diversify into euros & Aussies & such?
You ever get the idea that some folks just love to chase a peak and can't resist the opportunity to sell low so they can buy something else high?
``The business cycle has bottomed out, mainly because the U.S. economy is improving,'' said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo. Shirakawa was formerly a Bank of Japan official.
U.S. economic growth probably rebounded to a 3 percent annual rate in the second quarter from 0.7 percent in the first three months of 2007, the weakest in four years, according to the median estimate of 70 economists surveyed by Bloomberg News.
The prospects of a credit crunch are now beginning to look more serious,'' wrote Rob Carnell, chief international economist at ING Wholesale Banking in London, in a report to clients today.If the current sense of panic lasts more than just a few days, then we will probably have to scale back our expectations for growth over the next 12 months.''
Inevitably there is nervousness about who is going to end up holding the toxic waste in the fallout of the subprime market,'' said Jeremy Batstone, an analyst at Charles Stanley & Co. in London.We are not particularly comfortable with banks.''
Later, guys. I'm off to feed that damned conjure bag a martini. It deserves it.
Actually Hiroki looks like a guy that hasn't slept well since the dollar started it's descent in 2001 and hasn't slept at all since CDO's started getting marked to market...
We are absolutely in crisis mode,'' said Fred Goodwin, a strategist at Lehman Brothers International in London.The patient has been sick for a while and perhaps the subprime problem sort of disconnects the respirator.''
Benchmark 10-year Treasuries and German bunds gained for a third day and Japanese government bonds had their biggest rally in more than 10 months on speculation a deepening U.S. housing slump will slow the world's biggest economy.
o one buying, selling or rating the bonds collateralized by these bad debts bothered to quantify the losses. Now the bubble is bursting and there is no agreement on how much money has vanished: $52 billion, according to an estimate from Zurich-based Credit Suisse Group earlier this week that followed a $90 billion assessment from Frankfurt-based Deutsche Bank AG.
Having studied all the major religions of the world I have come to one conclusion and that is they have caused the deaths of more people threw fighting each other threw out the history of man then anything other cause and if they are all going to heaven I think hell will be a lot less crowded.
I do have some of those. But I think our own domestic T-bonds will be more profitable.
I did break down and buy some 20-years at 5.4%. It just seemed like a good idea at the time. Especially with people buying corporate bonds with yields like that not too long ago.
We'll see how that turns out.
It's hard to go bankrupt buying treasuries.
Unless you're buying zero coupon bonds with 10x leverage, of course.
"any chance housing will re-price to 2002 level's?"
Housing will return to the mean. That's probably 1997 prices (Shiller's benchmark) plus inflation, about 25% to 30% added at this point.
It could easily fall below that floor before equalizing.
Mr. Market wants everyone to know that it doesn't care what S&P, Moodys, NAR or Big Ben have to say...keep partying until the music stops and focus on the terrorist threat this summer. Nothing to see here.
Mr. Market wants everyone to know that it doesn't care what S&P, Moodys, NAR or Big Ben have to say...keep partying until the music stops and focus on the terrorist threat this summer. Nothing to see here. - frj
Its like a long distance road race... no one wants to break out & lead yet no one wants to lose contact with the pack... so they all stick close together like a school of sardines.
But once somebody thinks they got the balls to crush the others - they go and then the real race begins.
A lot of these big funds playing the markets are like that... they don't want to run out alone (for fear they hit the wall & crash)... nor do they want to be left 'behind' for fear they will be left out when the real race begins.
So they all hang close together... heavily invested in the markets but with a light trigger finger on the buy/sell button... and the markets trade tightly, volatility is low and nothing appears to be happening. But these big market participants are all watching each other... The pack won't hold tight forever.
The BoJ is going to need those treasuries to pay off the country's massive public debt(bigger than the US)...they ought to sell treasuries and retire JGB's...of course that would foul up the yen/dollar exchange rate and crush their exports...I agree with you that Ito's comments are nuts...
FYI: I've traded AAA securities at prices well below 92, where no one would have suggested they were anything other than AAA. Price alone is not an indicator of quality.
Ha! Given the low quality of these bonds, I'd hardly call those prices a "fire sale." Just wait until they see what's comin'...
No, I don't want any crappy bonds. What else ya got? Where do you keep the good stuff?
OMG, take a look at this new data point,
a new record for foreclosures.
Set the date to 1982.
Last week, I heard that Bear Stearns had no takers when they offered 11 cents on the dollar for their holdings (5 cents for the riskier ones).
any chance housing will re-price to 2002 level's?
"..including $10 million in below-investment-grade subprime mortgage-backed bonds from an Ameriquest Mortgage issuer at 58 cents on the dollar."
With the way-over-inflated Ameriquest appraisals, 58 cents on the dollar should lower the LTVs down to about 105%.
Buy now!
Actually the 92 offer for AAA is more important. That wipes out way more value than BBB or worse.
What a coincidence! flipdetroit.com is advertising a fire-sale on Detroit area homes...
What a coincidence! flipdetroit.com is advertising a fire-sale on Detroit area homes...
Before or after the fire?
A "AAA" security offered at 92? I wonder when
Moody's/S+P will finally get around to downgrading this one. They deserve to get sued.
I think treasuries must be benefiting from people bailing out of these things. Monster rally the past two days.
This is why I've had so much trouble being bearish on treasuries -- when people start bailing out of hundreds of billions (trillions?) of dollars in garbage debt and grossly overinflated equities, where do they go?
At least you know the government can pay it's debt off by printing money.
That's better than nothing -- you can start a fire and keep warm, or take notes with a Sharpie in the worst case scenario.
What a coincidence! flipdetroit.com is advertising a fire-sale on Detroit area homes...
Slightly off topic - but this made me think of the fire-sale scene from Arrested Development:
YouTube -
touche,
oof
.
ECONOMIX; Can't Sell Your Home? Maybe It's Priced Too Low - NY Times
You seem to have caught a case of black sarcasm recently dryfly. Anything in particular the cause?
You seem to have caught a case of black sarcasm recently dryfly. Anything in particular the cause?
Andrew - I felt the same way working rural Minnesota & Iowa in the run up to and through the farm crisis... you knew it was getting bad, you just didn't know how bad or how long it would last. There wasn't much else you could do other than laugh at it.
Devaney, Boy Genius, Plunger. He'll have to move back with his Mom.
The End is nigh.
mp, Devlaney is trying to beat the ratings agencies' downgrades to the market. Lookin for another GF bagholder to be the last to hold the hedgie's bag, so he doesn't get caught holding it at the end. This won't be the last weasel selling radioactive waste...
MBIA, AMBAC, could be vaporized. The toad bones and ground-up dog balls in my conjure bag say so.
Detroit Dan- "What a coincidence! flipdetroit.com is advertising a fire-sale on Detroit area homes..."
I saw a documentary on Detroit and its problems. It's called Robocop.
Is there a link to this story?
Japan's Government Bonds Poised for Biggest Rally in 10 Months
The yield on the benchmark 10-year bond slid 6 basis points to 1.9 percent in Tokyo as of 11:01 a.m. at Japan Bond Trading Co., the nation's largest interdealer debt broker.
Funny to hear about people lining up to buy bonds that yield 1.9%
That said, I could see converting dollars to buy these things.
The Yen could rally God knows how much against the dollar when the carry trade undwinds.
OT: Bloomberg reports that Australians have purchased $7.7 BN in US real estate in the past year. Comment was they go for non-trophy properties in places like Pittsburgh.
IF the guy is sharp enough to parlay 5 hundo into 300mm, you'd have to bet he's stashed some abroad...
you gotta love the Bk laws
This is funny in a see-I-told-you-so sort of way:
June gloom in stores
Think May sales were slow? Wait until you see last month's figures from sellers.
"The consumer continues to be plagued by pressures on discretionary spending from gas inflation and housing deflation..."
I think this is why some analysts claim that rising oil prices are deflationary - they take money away from discretionary spending, and we're a discretionary spending kind of economy.
JBA has this one right, though I'd like to know what the interest rate on that tranche is. 28 on the bottom, or near bottom piece? Not pretty.
"June results sound like they're tracking on the lower end of expectations on the heels of a lackluster May," according to Goldman Sachs analyst Adrianne Shapira.
"While the weather has been accommodating, it seems as if the customer has taken a pause," she said.
Well, at least she didn't blame the weather.
In stressful times like these, it's often beneficial to pause for a moment of reflection. Here's David Lereah, advising us last year to buy condos in Florida.
YouTube
- David Lereah from NAR and his dotcondos
Heavy Fuel time- when my ugly big car won't take this hill I'll write my suicide note on the hundred dollar bill...how many hedgies are thinking that line might just be their fate- screw the investors, the lenders are starting to snatch and shop the collateral.
I see the nikkei has lost one percent before lunch and the yen is lurching higher...
Well, even Shrub is saying it-
Someday this war's gonna end...but first we have to go all the way up the river....
dryfly, mp,
You guys are in rare form tonight, but the show is getting interesting, isn't it?
Neil, pass the popcorn!
bye bye support
Japan Should Diversify Reserves, Abe Adviser Ito Says (Update2) - Bloomberg.com
fafhrd, you're right! Hiroki looks pissed. It's time, he says, to use those dollars to buy something besides those dumb U.S. Treasuries.
Hey, Bernanke, you hear that?
tj, the show is more than interesting. I just hope it doesn't become too interesting. Maybe that's why my conjure bag is cowering in the corner, trembling.
Ya tj - its getting interesting.
:::
fafhrd - did you notice in that article on Japan Reserves - Ito suggested they go into stocks & corporate bonds? After than diversify into euros & Aussies & such?
You ever get the idea that some folks just love to chase a peak and can't resist the opportunity to sell low so they can buy something else high?
How come GDP in 2nd Q is 3% (estimates)
``The business cycle has bottomed out, mainly because the U.S. economy is improving,'' said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo. Shirakawa was formerly a Bank of Japan official.
U.S. economic growth probably rebounded to a 3 percent annual rate in the second quarter from 0.7 percent in the first three months of 2007, the weakest in four years, according to the median estimate of 70 economists surveyed by Bloomberg News.
Japan Current Account Surplus Widens on Investment (Update2) - Bloomberg.com
dryfly, it's like a fat man in a bath tub. You can't get comfortable and by the time your settled, all the water's gone.
Detroit Dan,
Liked the site flipdetroit.com... I especially liked the comps for many of the homes being listed at $0, which is likely close to what they'll get.
You ever get the idea that some folks just love to chase a peak and can't resist the opportunity to sell low so they can buy something else high?
You know the end is near when you see them get into the game.
Everyone is concerned about ABX drop of 5%:
FT.com / UK - High-risk loans revealing shaky foundations
Stocks down 400 points in one day !!!
Oh, wait. This was January and February. Since then ABX dropped 50% but stocks are up.
I guess it is different this time.
Hey, y'all, here's a good one
Subprime Losses Drub Debt Securities as Ratings Drop (Update3) - Bloomberg.com
The prospects of a credit crunch are now beginning to look more serious,'' wrote Rob Carnell, chief international economist at ING Wholesale Banking in London, in a report to clients today.If the current sense of panic lasts more than just a few days, then we will probably have to scale back our expectations for growth over the next 12 months.''
Inevitably there is nervousness about who is going to end up holding the toxic waste in the fallout of the subprime market,'' said Jeremy Batstone, an analyst at Charles Stanley & Co. in London.We are not particularly comfortable with banks.''
Later, guys. I'm off to feed that damned conjure bag a martini. It deserves it.
- Bloomberg.com
Finally, Dr. Strangemoney, here's one for Chuck Prince:
YouTube
- Carrie Lucas - I Got To Keep Dancing 1977
Keep on smilin', Chuck, and keep on dancin'. The conjure bag tells me Citigroup's gonna need all the mojo you got.
Hiroki looks pissed.
Actually Hiroki looks like a guy that hasn't slept well since the dollar started it's descent in 2001 and hasn't slept at all since CDO's started getting marked to market...
Ryland Homes doesn't want to be left out either....everyone with bad news is going to announce it now that they have company.
I'm still wondering why two supposedly independent rating agencies downgraded all that junk on the exact day. Like what are the odds?
sorry....exact same day.
We are absolutely in crisis mode,'' said Fred Goodwin, a strategist at Lehman Brothers International in London.The patient has been sick for a while and perhaps the subprime problem sort of disconnects the respirator.''
Benchmark 10-year Treasuries and German bunds gained for a third day and Japanese government bonds had their biggest rally in more than 10 months on speculation a deepening U.S. housing slump will slow the world's biggest economy.
Treasuries Rise, Pushing Yields to Lowest in Month, on Subprime - Bloomberg.com
o one buying, selling or rating the bonds collateralized by these bad debts bothered to quantify the losses. Now the bubble is bursting and there is no agreement on how much money has vanished: $52 billion, according to an estimate from Zurich-based Credit Suisse Group earlier this week that followed a $90 billion assessment from Frankfurt-based Deutsche Bank AG.
Subprime Losses Drub Debt Securities as Ratings Drop (Update3) - Bloomberg.com
HUD Secretary, Jackson, interviewed on Bloomberg about Subprime:
Bloomberg News
I think 2002 sounds about right.80% chance
I do have some of those. But I think our own domestic T-bonds will be more profitable. 77u
BYWWS is a pure play on ayen strengthening. I picked up some yesterday at 2.60
Giant Squid Appears in Australia
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By THE ASSOCIATED PRESS
Published: July 11, 2007
Filed at 7:49 a.m. ET
HOBART, Australia (AP) -- A squid as long as a bus and weighing 550 pounds washed up on an Australian beach, officials said Wednesday.
''It is a whopper,'' said Genefor Walker-Smith, a zoologist who studies invertebrates at the Tasmanian Museum.Giant Squid Appears in Australia
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i'm not sure why i have made the association to finance and markets but i did. maybe its a ghostbusters kind of thing....
By THE ASSOCIATED PRESS
Published: July 11, 2007
Filed at 7:49 a.m. ET
HOBART, Australia (AP) -- A squid as long as a bus and weighing 550 pounds washed up on an Australian beach, officials said Wednesday.
''It is a whopper,'' said Genefor Walker-Smith, a zoologist who studies invertebrates at the Tasmanian Museum.
Black Friday..for sure...My sock draw full of doll heads and cocaine told me so.
Dear Tennis_8
That Jackson interview on Bloomberg is a whopper ! Someone needs to save that for the historical record.
We anticipated this
We realize now that many of the peoples have not reading the fine print.
HUD in Asia trying to talk up the worth of subprime CDOs amazing.
Regards
Kett82- "That Jackson interview on Bloomberg is a whopper ! Someone needs to save that for the historical record."
I'm sure you also heard "the full faith and credit of the United States government" mentioned at least twice.
I've haven't heard that coming out of a government official since the S&L crisis.
Kevin,
I think you should just keep tithing your 10% (AGI, Line 23) or suffer the pains of eternal damnation.
lama
Having studied all the major religions of the world I have come to one conclusion and that is they have caused the deaths of more people threw fighting each other threw out the history of man then anything other cause and if they are all going to heaven I think hell will be a lot less crowded.
I do have some of those. But I think our own domestic T-bonds will be more profitable.
I did break down and buy some 20-years at 5.4%. It just seemed like a good idea at the time. Especially with people buying corporate bonds with yields like that not too long ago.
We'll see how that turns out.
It's hard to go bankrupt buying treasuries.
Unless you're buying zero coupon bonds with 10x leverage, of course.
Dear mp
Exactly, it was less than reassuring to hear a Cabinet-level official say things like:
I am pretty sure we will always have a U.S. government followed by nervous laughter.
Regards,
LBO Credit Quality Falls to Lowest in Nine Months (Update2) - Bloomberg.com
LBO
Nice catch, Yal.
AHM layoffs:
404 - Resource not found
Looks like time to raise the periscope on AHM and take some bearings.
Oh, man! It's already been trashed. Then again, maybe it's time for the kill?
"any chance housing will re-price to 2002 level's?"
Housing will return to the mean. That's probably 1997 prices (Shiller's benchmark) plus inflation, about 25% to 30% added at this point.
It could easily fall below that floor before equalizing.
Real Estate Data, Statistics, Demographics, & Trends: NAR Current News
NAR: prices to decline 1.4% this year (it is burried deep inside)
Mr. Market wants everyone to know that it doesn't care what S&P, Moodys, NAR or Big Ben have to say...keep partying until the music stops and focus on the terrorist threat this summer. Nothing to see here.
fjr, based on the early action, I'd have to agree, although I do think some financials will get thrashed today.
Mr. Market wants everyone to know that it doesn't care what S&P, Moodys, NAR or Big Ben have to say...keep partying until the music stops and focus on the terrorist threat this summer. Nothing to see here. - frj
Its like a long distance road race... no one wants to break out & lead yet no one wants to lose contact with the pack... so they all stick close together like a school of sardines.
But once somebody thinks they got the balls to crush the others - they go and then the real race begins.
A lot of these big funds playing the markets are like that... they don't want to run out alone (for fear they hit the wall & crash)... nor do they want to be left 'behind' for fear they will be left out when the real race begins.
So they all hang close together... heavily invested in the markets but with a light trigger finger on the buy/sell button... and the markets trade tightly, volatility is low and nothing appears to be happening. But these big market participants are all watching each other... The pack won't hold tight forever.
dryfly,
The BoJ is going to need those treasuries to pay off the country's massive public debt(bigger than the US)...they ought to sell treasuries and retire JGB's...of course that would foul up the yen/dollar exchange rate and crush their exports...I agree with you that Ito's comments are nuts...
2002 would be nice. 1997 is more realistic.
FYI: I've traded AAA securities at prices well below 92, where no one would have suggested they were anything other than AAA. Price alone is not an indicator of quality.
ravenor, BOJ creditors live in japan, they want yen