Source: Bianco Research
The table above was constructed right before the payroll report. It shows a snapshot of the lowest 10-year yields on the planet. The US has the 11th lowest 10-year yield. The Swiss yield of 0.48% is the lowest 10-year ever recorded anywhere.
As much as the US 10 year is a source of awe — it hit 1.44 this morning after the NFP report — there are numerous 10-year yields lower around the world showing how intense the flight to quality bid has become.
Long term 10 Year chart after the jump
Category: Data Analysis, Fixed Income/Interest Rates
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
norway looks like a good leveraged buy
even if things get better their oil revenues and currency will go up
” intense the flight to quality”
Yeah—quality as in gold not paper backed by money printing that once replaced taxes on (once) employed workers.
[...] Ten year government bond yields around the globe. (Big Picture) [...]
Isn’t it odd that “quality” includes Japan? BR, why is a high debt/GDP ratio terrible in some countries but wonderful in Japan?
Marc P:
It isn’t wonderful but Japan is a special case, as most of its bonds are held by its own people.
MarcP,
Maybe because some countries haven’t politicized deficits, debt, and Keynesian economics?
Just wondering.
Now that everyone is sucked in, the Treasury should convert our debt to long term.
san_fran_sam: you took the words right out of my mouth.
My question now is what to do that my long treasury strategy is working and close to hitting even Gary Shilling’s target of 2.5% for the 30 year. Have made a good bit after accumulating a lot of 10-30 year treasuries, but what to do if it does hit 2.50? Had assumed the 2.5% 30 year would coincide with a stock market crash so I could sell out and by quality stocks at the bottom. The way things are looking, the stock market still hasn’t crashed and treasury yields could go even lower.
Shale gas and cheap money: what are we waiting for.
Six new greenfield ethylene crackers that can’t get built fast enough, fast becoming an energy exporter, 30-year money throwing itself at us at 2.5%, dangerously out dated and crumbling infrastructure—but because we have (or are) a bunch of peckerwoods incensed that a black man is living in the White House—we are sitting with our heads up our asses with 14 million unemployed.
Home of the brave, indeed.
Have a swell weekend. I’ll be grilling steak for a well educated woman.
I always like it that the free market finds greater value in socialism (#’s 2,5,6,8, and 9 as defined by the Conservative sock puppets) than the United States. It is important to point out that most of there yields for “#’s 2,5,6,8, and 9″ government debt are not a product of the massive market interventions found in Japan, the US, and UK.
This all kinda begs the question, what would US yields be if there was no operation twist….?
DSS10: I suspect Treasury yields here would be just as low without Twist. It’s what happens in times of financial distress. All the Fed really did was use Twist as a means to give money to the broker dealers to go buy stocks. The extra liquidity pumped up equities and commodities. Without that, all that investment money would have had to have gone somewhere.
Do you remember when 10-year hit 2.25% several weeks ago (just a blip) and everybody was saying Treasury’s are the worst investment and you should get out of government bond funds?
What WFTA said.
Gold holds no value and the FED is irrevelant. When people finally admit it, we will get somewhere in the financial universe.
Hey Mike,
I saw the quote below the other day and it stuck in my head. It was the quote in the second paragraph that piqued my interest. Assuming that the “pull a rabbit out of my hat” estimate of 85 basis points is relevant then the US 10 year would be # 15.5 on the list…….
( http://www.bloomberg.com/news/2012-03-11/operation-twist-s-affect-on-u-s-yields-comparable-to-fed-easing-bis-says.html )
“The program known as Operation Twist may lower the Treasury 10-year note yield by about 85 basis points, or 0.85 percentage point, compared with a reduction of 164 basis points under the Fed’s $2.3 trillion purchases of assets known as quantitative easing, a report from the Basel, Switzerland-based BIS said.
Operation Twist “may have a significant impact on the 10- year Treasury bond yield, comparable to that of outright asset purchases,” Jack Meaning, an economics doctoral candidate at the University of Kent, and Feng Zhu, a BIS economist, wrote in the report, which was released today.”
So the conclusion is Fed policy is reflecting the global markets and not driving lower rates? At least that’s the quick take.
Clearly, there is a crisis in confidence in government debt, and we should all enact austerity measures as soon as possible. (sulk)
Also in agreement with WFTA.
What an opportunity we have! What a pity we are too mentally locked up to use it.
DSS10: Looked at the article. The problem with that explanation is if you look at the charts for ^TNX and ^TYX over the past 1-5 years over at, say, Yahoo Finance
http://finance.yahoo.com/q/bc?s=%5ETYX&t=1y&l=on&z=l&q=l&c=
For example, 30 year yields started dropping towards the end of last July as the economy was going into the tank. Twist wasn’t announced til Sept. 21. Same thing for the 1o year. Twist caused them to spike lower temporarily but they came back up somewhat and even had a couple of spikes higher since then.
Additionally, Operation Twist is supposed to end this month. If people really thought it was only twist keeping rates down, shouldn’t they have started rising in anticipation?
I find it laughable that some think that infrastructure spending will save us all if only we have the “courage” to go deeper into debt to save the curent political clowns. Jobs with a lifetime of 1-3 years are not going to fix this economic morass no matter how loudly the Keynesians piss and moan. A more useful approach might be to get governemnt out of the way, strip away all the redundant silly assed regulations that constrict innovation, encourage savings, reduce the burdensome tax structure and get on with the task of freeing up people from the burdens of government. Far too simple and requires a ceding of power by the elites unfortunately.
i didn’t see Greece, Ireland, Portugal or Spain in these charts. Odd. Anywho i’m sure those who enjoy partying “with an educated woman” are simply ecstatic over the responsibility of our Federal Government as it comes to keeping that spending and debt load under control. I know i am! In fact if we’re lucky “the Fed itself will your government PRECISELY how to spend all their borrowed money.”
10 yr. treasury is the new nazz 5000. Valuation doesn’t matter, until it does.
[...] 10 Year Bonds Around the World The Big Picture [...]
What I find “laughable” is that we allow over 10 million people who want to work and produce to sit at home collecting unemployment support from their government. Every year those 10 million people sit on their hands rather than use them productively we lose about $ 1 trillion of potential GDP. We also have negative rates on 10 year TIPS and huge unfulfilled needs to repair and rebuild our infrastructure. You have to be a moron to not see the obvious solution to those problems. Yet half of the population think it is a great idea to torture those 10 million people with unemployment and lose a trillion per year in the process. All so that a small class of spoiled self-indulgent jackasses can make sure that rather than paying a fair and solid fee (tax) for the continued improvement of the society they owe their success to, they can acquire another dozen stupid luxury items for themselves and their families.
Since all these countries are – one way or another – on fiat currency systems, why call it a flight to safety?
Countries issue Treasury bonds not to get fiat – that, of course, would be nonsense.
Rather, issuers of fiat currency issue Treasury securities simply as a convenient, left over way to set interest rates, indirectly, by draining banking reserves from Central Bank accounts. TSs are just a habit left over from gold-std days.
see these references:
“The Treasury tax and loan account system was designed as a mechanism for minimizing the dislocations on bank reserves and the money market arising out of the sizable and irregular transfers between the Government and the public.”
Treasury tax and loan accounts and Federal Reserve open market operations
http://www.newyorkfed.org/research/quarterly_review/1978v3/v3n2article7.pdf
TTL Note Accounts and the Money Supply Process
http://research.stlouisfed.org/publications/review/79/10/Accounts_Oct1979.pdf
Isn’t the increasing demand for actually holding TSs more a sign that people are afraid to take otherwise reasonable risks, or outright uncertainty? When that occurs in fiat currency regimes it can only mean one thing, the issuers of fiat currency are issuing too little, and private interests are doing the only rational thing they can – hoard what little they have.
What are we worried about? A deficit in fiat? Since fiat currency is backed only by the initiative, will & credit of the issuing population, a fiat “deficit” only signals public initiative.
Balanced fiat = stagnant public initiative.
Surplus fiat = shrinking public initiative, aka austerity, aka becoming less than we can be.
[...] you can see in this chart from Bianco Research (via Barry Ritholtz), demand is high without [...]