{"id":8832,"date":"2015-06-05T05:56:59","date_gmt":"2015-06-05T10:56:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8832"},"modified":"2015-06-05T05:56:59","modified_gmt":"2015-06-05T10:56:59","slug":"stay-out-of-harms-way-the-casino-is-fixing-to-blow","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8832","title":{"rendered":"Stay Out Of Harm\u2019s Way\u2014-The Casino Is Fixing To Blow"},"content":{"rendered":"

Stay Out Of Harm\u2019s Way\u2014-The Casino Is Fixing To Blow<\/a><\/h3>\n

Shock waves have been rumbling through the global bond market in the last few days.\u00a0On April 17\u00a0the yield on the\u00a010-year German bund pierced through the 5bps level, but yesterday it\u00a0tagged 100bps. That amounted to\u00a0a 20X move in\u00a039 trading\u00a0days.<\/p>\n

It also amounted to\u00a0total annihilation if you were front running Mario Draghi\u2019s bond buying campaign on 95% repo leverage and didn\u2019t hit the sell button fast enough. And there were a lot of sell buttons to hit.\u00a0The Italian 10-year yield has soared from a low of 1.03% in late March to 2.21% last night, and the yield on the Spanish bond has doubled in a similar manner.<\/p>\n

Needless to say, this is not by way of a\u00a0lamentation in behalf of the euro-bond speculators who have had their heads handed to them in recent days. After harvesting hundreds of billions of windfall\u00a0gains since Draghi\u2019s mid-2012 \u201cwhatever it takes ukase\u201d they were\u00a0overdue to get slapped around good and hard.<\/p>\n

Instead, what we have here is just one more striking demonstration that financial markets are utterly broken. The\u00a0notion of honest price discovery\u00a0might as well be\u00a0relegated to the museum of financial history.<\/p>\n

The exact\u00a0catalyst for yesterday\u2019s panicked global bond sell-off, apparently, was Draghi\u2019s public confession that\u00a0although the\u00a0ECB would stay the course on its $1.3 trillion QE\u00a0program, it cannot prevent short-run \u201cvolatility\u201d in the trading pits.<\/p>\n

Why that should be a surprise to anyone is hard to fathom, but it does crystalize the \u201clook ma, no hands\u201d essence of today\u2019s markets. The trading herd\u00a0goes in the direction enabled by the central banks until a few dare devils finally fall off their bikes, causing an unexpected pile-up and inducing\u00a0the pack to temporarily reverse direction.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Stay Out Of Harm\u2019s Way\u2014-The Casino Is Fixing To Blow Shock waves have been rumbling through the global bond market in the last few days.\u00a0On April 17\u00a0the yield on the\u00a010-year German bund pierced through the 5bps level, but yesterday it\u00a0tagged 100bps. That amounted to\u00a0a 20X move in\u00a039 trading\u00a0days. It also amounted to\u00a0total annihilation if you […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5185,6122,5979,2120,233,279,281,282,284,6123,1044,1138],"class_list":["post-8832","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-market","tag-casino","tag-contracorner","tag-david-stockman","tag-ecb","tag-eu","tag-europe","tag-european-central-bank","tag-european-union","tag-global-bond-market","tag-mario-draghi","tag-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8832"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8832\/revisions"}],"predecessor-version":[{"id":8833,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8832\/revisions\/8833"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}