http://www.zerohedge.com/news/2013-05-21/and-new-us-debt-ceiling
( 16 trillion seven hundred billion in debt , ten year bonds less than two percent - that is just sick......)
And The New US Debt Ceiling Is...
The grace period between February and mid-May, when the US spent like a drunken sailor without regard for even structural limitations, and raked up over $300 billion in debt, or said otherwise when it was without an official debt limit, is over as of this weekend as we reported, and starting Monday the clock has been reset and wound up to the amount of the debt previously incurred in the phantom period. Courtesy of today's Daily Treasury Statement we now know that the new and improved debttarget ceiling, at which the US immediately finds itself is: $16,699,421,095,673.60.
As a reminder, since the US is automatically at the debt ceiling where it was four months ago but magically got a a $300 billion reprieve despite all the talk of austerity because no bipartisan agreement could be reached, the total amount of US debt will not change until Labor day, at which point all the various Treasury gimmicks to incur less debt expire and either the US is forced to start prioritizing debt, or it defaults outright.
And as we pointed out, early September is when the fun really starts: it will be just after the Jackson Hole conference where Bernanke will be absent for the first time, and just before the September FOMC meeting at which Bernanke will most likely announce some, if not substantial, tapering of QE, and when the Tepper theory that QE is good but less QE is gooder.
So enjoy the no-volume, hypnotic levitation until then, but load up on Sept VIX calls: that's when the fun starts all over again.
Imagine a circle of men playing Russian Roulette , each with a fully loaded gun in hand .....
http://www.zerohedge.com/news/2013-05-21/mutual-assured-destruction-goes-global
Global Assured Destruction, Or How Bernanke Now Holds The Entire World Hostage
The one headline we have been waiting for for over four years has just hit:
- BOK KIM SAYS WORLD MAY FACE RATE RISK IF U.S. EXITS FROM QE
Not when, if. And there you have it: if the Fed exits, the world (and most certainly Japan) gets it. Thus, for the sake of the children (who will have inhert about $100 trillion in debt but don't worry: debt is an asset as some "analysts" will promise) Bernanke can never exit. QE...D
And since never is a litte longer than 2016/2017, at some point in the next few years Bernanke will be the proud owner of all marketable Treasury paper. All of it.
What could go wrong other than anything ?
http://www.zerohedge.com/news/2013-05-21/bank-japan-policy-meeting-preview-chance-bond-crash
Bank of Japan Policy Meeting Preview - Chance Of A Bond Crash?
Submitted by Tyler Durden on 05/21/2013 17:58 -0400
Excerpted via Bill Blain of Mint Partners,
The current Bank of Japan policy meeting is possibly the most important thing going on this week (even more so than Bernanke's comments perhaps). If, as is distinctly possible, they don’t do anything to reinforce the immediacy of the Kuroda QQE package, we could be looking at bond markets reacting in a most "unfavorable manner". The effect would be to reinforce the latest round of 'fear-on' bond selling – certainly over the short-term, and the damaged sentiment could impact stocks also.
...
That's why the Bank of Japan policy meeting today/tomorrow will be so interesting. Can it nurture and sustain real growth? Devaluing yen to benefit exporters does seem to be working - look at recent Yen corporate results. However, now we've got the rest of Asia looking to balance Japan's competitive devaluation. We still need to see how the other side of Abe-onomics works: rebuilding Japan. How vulnerable is the BoJ game? The Nikkei may be massively higher, but interest rates and JGB's remain stubbornly volatile and high - a factor conflating the global bond worries... if the Fed is going to end QE and Japan's QE squared isn't working, then bond players will quite rightly capitulate.
There is probably not much the BoJ can say at this meeting – it’s got to give the policy (of massive QE) time to work. That leaves markets highly vulnerable to a sense of disappointment tomorrow. On the other hand, we've long said.. "Don't fight Kuroda!"
...
Whatever happens in the Japan story; how much longer the Fed keeps up the buying, and the implications on Global QE remain the main themes and drivers of the current market. The question is, for how long might markets be put on the back foot by the continued weakness in JGB and knock on effects. [let alone Europe]
...
Back in the bond market, over the last few days the search for yield does seem capped. There have been some stumbles in new issues, and we're encountering reluctance from buyers to engage some excellent client offers for the highest yielding names like Greece or Slovenia. We've seen limited interest in relative spread trades - for instance privately placed Canada risk at a significant spread over the underlying provincial names. That all tells me the bond market is nervous.
and.....
"The Math Is Stacked Against Japan - It's Not 'If', It's When"
As the BoJ prepares to thrill us with even moar in its latest policy meeting (or not as we discussed earlier) and with Amari et al. now jawboning JPY to some extent to control the out-of-control chaos in JGBs, it is perhaps worth taking 20 minutes to comprehend just what all this extreme policy action means. The following brief presentation covers it all in a Kyle-Bass-ian facts-and-fallacies manner, Christine Hughes sums it all up perfectly, for Japan, "The Math Is Stacked Against Japan - It's Not 'If', It's When."
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