$35Bn worth of 3-year notes to sell today.
That will be followed by $21Bn worth of 10-year notes tomorrow and $13Bn worth of 30-year notes on Wednesday. The 3-years are expected to fetch about 1.5%, 2% for the 10-year and 3.12% for the 30-years despite the fact that that represent negative returns to inflation. So, either it’s just a scam where the Fed, through its member banks, purchase whatever Treasury wants to sell to keep up the illusion that the US is able to borrow cheap OR the rest of the World is so horrifically scary that Global investors are willing to take a loss on $69Bn long-term, rather than risk leaving it in a bank or putting it into a stock or commodities or in the notes that are handed out by other countries.
Like Greece, for example, who were just “fixed” yet today the NEW BONDS are trading as 18.1% for 11-year notes. Hmm, 18.1% for Greece, which has just been declared “safe” by the EU or 2% for US notes? Something is clearly wrong with this picture… You KNOW something is wrong but, if you are buying equities, then you are choosing to pretend that, although there is a very obvious scam going on in the bond markets, that it somehow doesn’t affect the equity markets. Come on – admit that you are lying to yourself – you’ll feel better!
Buying equities in a Federally funded, Bot-propped rally is no different than participating in an obvious Ponzi scheme. You KNOW it’s fishy but EVERYONE is doing it so you just want a little taste and you tell yourself you’re just going to help yourself to some of that free money and then you will get out (dumping your shares on some other sucker who will be closer to the eventual burning than you were). That’s called the greater fool theory and it works great as the World is bursting at the seams with fools but, eventually, the fools and their money are parted and SOMEONE is left holding the bag.
Will it be you? Of course not, you are no fool! Someone else will buy your GMCR shares for $63, right? Well, that was right on Thursday, but on Friday they dropped to $52.50 and that was after drifting gently down from $69 earlier in the month. It was “just” a…
