The Market Place Interest Rate On The 10 Year US Treasury Bond Is Rising
Thursday, 11. September 2008, 19:44:10
The Flight To Safety Has Ended ... And Soon, The AAA Rating Of US Treasuries Will Soon Come Into Question
The bond market place is giving a haircut to US Treasuries in response to the bailout of the mortgage GSEs, Freddie Mac, FRE and Fannie MAE.
A credit write down of US Government Bonds is underway, and soon there will be an all out run on the US Treasury bonds as investors gain greater clarity into the cost of nationalizing the US mortgage backed securities, underwritten by these former organizations.
The 10 year US Treasury bonds are topping out as is seen in the Stockcharts.com chart of TLT, manifesting a lollipop hanging man candlestick today having fallen from 96.83 on September 9th, 2008 ... TLT
The zero coupon mutual bonds are topping out as is seen in the Stockcharts.com chart of BTTRX manifesting a gravestone doji in trading yesterday .... BTTRX.
The seizure of the two, was a massive transfer of wealth to investment bankers who had securitized credit default swaps: the seizure privatized profits of risk underwriting to a relative handful of organizations; and socialized losses unto the US Taxpayer, and the bond investment community at large.
The financialization of derivatives is proving so far to be rewarding to those companies who have underwritten them.
The action keeps the sovereign wealth funds and central banks of China, Kuwait and Singapore from foreclosing on their Fannie Mae and Freddie Mac debt.
The bail out "protects debt holders like China's central bank, which holds $400 billion in GSE debt. It protects foreign central banks generally, as they hold $1 1/2 trillion in GSE debt. It protects the likes of Bill Gross, who took a calculated risk in feasting on GSE debt, betting that such a plan was likely to happen", says Edward Harrison. (And who, I say precipitated the execution of the plan by his September 5, 2008, article There's a Bull Market Somewhere?).
"It's socialism for the rich", says Jim Rogers, CEO of Rogers Holdings, in CNBC Europe interview, who is short on U.S. bonds, and probably long gold; with result that his investment portfolio is being destroyed.
The bail out plan is the nail in the coffin for capitalism, which died with the Fed assisted JP Morgan buyout of Bear Stearns. The "moral hazard" issues for me is that it raises state corporatism to an all new level; sets the stage for more of the same; and makes the US Government the "US Public Housing Agency".
The nationalization of the two, actually speeded up the ongoing application of the Liquidation Thesis which holds that government services and payments, service sector jobs, public and private debt of all types, and unfunded retiree benefits are going to be liquidated, that is done away with
Peak Treasuries Occurred On September 9, 2008
The bond market place independent of Federal Reserve action, is calling the interest rate on the 10 Year US Treasury Note, ^TNX, higher, as seen in the Yahoo Finance ongoing five day chart of ^TNX, rising from a bottom low of 3.60, on September 9, 2008 ... ^TNX
The ten year interest rate moving higher, is seen in the Stockcharts.com chart of $TNX, rising from 36 .... $TNX
Conclusion
The interest rate on the 10 Year Note, $TNX, has been rising from 3.6% ever since September 9, 2008.
The bailout of the debt toxic and debt overwhelmed mortgage guarantors was the mother of all credit writedowns: "Peak Treasuries occurred September 9, 2008".
DXKSX, which is 200% inverse of the rate on the 10 Year note, has been steadily rising from its spiked down low of 13.25, and will provide low risk and steadily good growth of investment for corporations seeking to preserve corporate wealth.
The Direxion mutual fund, DXKSX, which is 200% inverse of the rate on the 10 Year note, as seen in The Street ongoing monthly chart of DXKSX will provide low risk and good growth of investment for corporations seeking to preserve corporate wealth ... Chart of DXKSX
For historical note, the spike down bottom low of 13.25 in DXKSX was established September 9, 2008.
Suggested Reading
Calling US Bonds Home - Prelude To collapse? by Kevin
The Worsening Debt Crisis An Interview with Economist Michael Hudson by Mike Whitney
Transcript of Schift And Keen On Dateline
Caveat
Please understand that I am simply a blogger, one who communicates the Liquidation Thesis, and my perceptions as to the value of gold. One should always seek counsel from a licensed investment professional before making any investment decisions.
The bond market place is giving a haircut to US Treasuries in response to the bailout of the mortgage GSEs, Freddie Mac, FRE and Fannie MAE.
A credit write down of US Government Bonds is underway, and soon there will be an all out run on the US Treasury bonds as investors gain greater clarity into the cost of nationalizing the US mortgage backed securities, underwritten by these former organizations.
The 10 year US Treasury bonds are topping out as is seen in the Stockcharts.com chart of TLT, manifesting a lollipop hanging man candlestick today having fallen from 96.83 on September 9th, 2008 ... TLT
The zero coupon mutual bonds are topping out as is seen in the Stockcharts.com chart of BTTRX manifesting a gravestone doji in trading yesterday .... BTTRX.
The seizure of the two, was a massive transfer of wealth to investment bankers who had securitized credit default swaps: the seizure privatized profits of risk underwriting to a relative handful of organizations; and socialized losses unto the US Taxpayer, and the bond investment community at large.
The financialization of derivatives is proving so far to be rewarding to those companies who have underwritten them.
The action keeps the sovereign wealth funds and central banks of China, Kuwait and Singapore from foreclosing on their Fannie Mae and Freddie Mac debt.
The bail out "protects debt holders like China's central bank, which holds $400 billion in GSE debt. It protects foreign central banks generally, as they hold $1 1/2 trillion in GSE debt. It protects the likes of Bill Gross, who took a calculated risk in feasting on GSE debt, betting that such a plan was likely to happen", says Edward Harrison. (And who, I say precipitated the execution of the plan by his September 5, 2008, article There's a Bull Market Somewhere?).
"It's socialism for the rich", says Jim Rogers, CEO of Rogers Holdings, in CNBC Europe interview, who is short on U.S. bonds, and probably long gold; with result that his investment portfolio is being destroyed.
The bail out plan is the nail in the coffin for capitalism, which died with the Fed assisted JP Morgan buyout of Bear Stearns. The "moral hazard" issues for me is that it raises state corporatism to an all new level; sets the stage for more of the same; and makes the US Government the "US Public Housing Agency".
The nationalization of the two, actually speeded up the ongoing application of the Liquidation Thesis which holds that government services and payments, service sector jobs, public and private debt of all types, and unfunded retiree benefits are going to be liquidated, that is done away with
Peak Treasuries Occurred On September 9, 2008
The bond market place independent of Federal Reserve action, is calling the interest rate on the 10 Year US Treasury Note, ^TNX, higher, as seen in the Yahoo Finance ongoing five day chart of ^TNX, rising from a bottom low of 3.60, on September 9, 2008 ... ^TNX
The ten year interest rate moving higher, is seen in the Stockcharts.com chart of $TNX, rising from 36 .... $TNX
Conclusion
The interest rate on the 10 Year Note, $TNX, has been rising from 3.6% ever since September 9, 2008.
The bailout of the debt toxic and debt overwhelmed mortgage guarantors was the mother of all credit writedowns: "Peak Treasuries occurred September 9, 2008".
DXKSX, which is 200% inverse of the rate on the 10 Year note, has been steadily rising from its spiked down low of 13.25, and will provide low risk and steadily good growth of investment for corporations seeking to preserve corporate wealth.
The Direxion mutual fund, DXKSX, which is 200% inverse of the rate on the 10 Year note, as seen in The Street ongoing monthly chart of DXKSX will provide low risk and good growth of investment for corporations seeking to preserve corporate wealth ... Chart of DXKSX
For historical note, the spike down bottom low of 13.25 in DXKSX was established September 9, 2008.
Suggested Reading
Calling US Bonds Home - Prelude To collapse? by Kevin
The Worsening Debt Crisis An Interview with Economist Michael Hudson by Mike Whitney
Transcript of Schift And Keen On Dateline
Caveat
Please understand that I am simply a blogger, one who communicates the Liquidation Thesis, and my perceptions as to the value of gold. One should always seek counsel from a licensed investment professional before making any investment decisions.
WIDGETIZE