iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,309 Blog Posts

Apparently, What This Market Needed All Along Was Sharply Higher Rates

In less than two weeks time, the US 10yr bond has gone from the very austere 1.75% to 2.29% — routing any and all bond bulls. I should know, being long a considerable amount of $TLT

us10

Isn’t that pretty?

The consequence of this, at least for now, has been a rip roaring stock market — supported by  a very strong dollar.

dollar

In the mortgage market, yields have shot higher in kind. I bet all of those home buyers are fucking loving this shit now.

rates

While the Trumpification of the economy has been the alleged excuse for all of this splendor, the price of WTI, one of the key barometers of global growth, has traded lower.

wti

I am talking to you with pictures, like idiot 3 year old children.

Stocks have risen like Jesus Christ out of the crypt — bestowing gifts of wine and bread to all of his disciples who were loitering outside for his arrival.

market

Opinions aside and cynicism at bay, it appears the market wanted higher rates all along. For years we’ve been fucked in a shoebox of low and negative yields. Lo and behold, the cat got loose, rates skyrocketed, and stocks followed suit. The only thing to consider, if I may play devil’s advocate here, is that inflation hasn’t proven to be hot yet. If these higher rates and soaring stock values do not result in actual inflation, other than the runaway varietal in the upper 1% of income earners, then what exactly did we accomplish here? We might find ourselves with a dreadful economy, with very elevated stock prices, and tight credit conditions.

Sounds like 2007 to me.

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16 comments

  1. it is showtime

    Same programming on indexes as the last couple years (smirk)

    Markets didn’t need anything. They have the same force-higher programming as prior-election, prior-2016
    Medium term is same pattern as post brexit. A multiday move higher generally without impetus, following
    a (small) black swan event, with clearly detectable programming forcing higher the indexes during the day.

    You guys aren’t thinking if you think the market is eating this up, regarding the weird swings in these areas.
    It’s under its own manipulation protocol, or say regime. So embarrassing so few identify the programming

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  2. soupbone

    Rates move w/o the fed? and furthermore shall they rise without the fed. learn baby learn.

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  3. no_logic

    Am getting quite a bit more bearish here – probably too early, but none of these factors seem healthy longer term, and rates moving higher here, in the absence of real inflation, just seem to be pushing on a string. So debt becomes less affordable, credit conditions tighten, asset values collapse (higher cap rates), the economy slows, and we’re back where we started. This move just feels like a massive head fake to me, but I have also been wrong many many times before……

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  4. zephler

    I’m not sure why you try to inject logic into this market? Logic hasn’t worked for how many years wrt to the market?

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  5. cali24dog

    And you’ll be saying the same shit for the next 1000 points higher….wake up and smell the rally!! You’re continued glass half empty attitude simply amazes me.

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    • Dr. Fly

      Why should it bother you what I do with my money? I am sure you’ll be just fine for the next thousand points up, merrily making money along the way.

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      • cali24dog

        I miss the stock tales of senor tropicana…but I respect your decision to take a break.

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    • it is showtime

      1000 pts doesn’t change truth. It’s not a rally. It never was a rally. It’s engineered.
      It’s fixed. It’s you know, rigged. Rally is not sufficiently accurate and slightly foolish

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      • ironbird

        showtime. Dude is not any market a selling operation? The whole game is unloading to the bag holder. Other than food and energy aka shit needed to not die. It is all hype and always has been.

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        • it is showtime

          Bird is the word. It’s more than coincidental that following 2 inflection events opposing the current power agenda, both crash reacting authentically (we did, minicrash that night with Trump and was erased by daylight), we go on described by the media as “euphoric” runs. A little more ornate than suckering in shoe shiners bro…

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  6. LP

    Nope, not a happy home shopper.

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  7. ironbird

    Figured it all out. This is the Keith Ellison rally to the moon.

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  8. rangersfan

    $wnr got taken out. First one for me where i got a takeover for one of my holdings that was higher than where i bought it. Rolled proceeds into $cvi , winning duh

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