200 Years of US Government Bond Yields

Nice chart from Dylan Grice of Société Générale showing two hundred years of US government bond yields (year end %):

click for larger chart


Popular Delusions: How to make America’s fiscal problems disappear: be more like Chile!
Dylan Grice
Société Générale Institutional Research

Category: Fixed Income/Interest Rates, Taxes and Policy, Technical Analysis

The Mind-Numbing Euphemism: Providing Liquidity

Sal Arnuk
Themis Trading LLC
10 Town Square, Suite 100
Chatham, NJ 07928
03 Mar, 2011


A euphemism, as you all know, is a pleasant sounding expression substituted for an unpleasant or offensive expression on sensitive topics. I think they are best explained by offering a few examples, which I do for you in the hope that it will loosen you up so that you won’t shove hot pokers in your eyes when you read the linked-to Reuters story further on. I am very tired of the euphemism, Providing Liquidity. And by the way, so are most on the buy-side. Here is Will Psomadelis, of Schroeder Investment Management:

“I fail to understand how we will benefit from the maker-taker model that Chi-X is proposing when you really evaluate the true impact of artificial liquidity and artificially compressed spreads,” he adds.” Read more here: Artificial Liquidity Can Work Against Institutional Traders

Ok, to loosen you up:

Euphemism Examples:

-           Winning (Spending $500k in a few months on coke and whores, blowing your incredibly generous TV gig, endangering yourself and family, being a source of amusement and ridicule, destroying your family name)

-           Charming (throw away)

-           Hook Up (have crazy college sex)

-           Establish Clear Boundaries (tell someone to eff off).

-           Chilean Sea Bass (Patagonian Tooth-Fish)

-           Sweetbread (Thymus Glands)

-           Downsizing (firing)

-           Pre-owned (used)

-           Enhanced Interrogation (torture)

-           Revenue Enhancement (tax)

-           Wardrobe Malfunction (look at my breast with a pasty on it)

-           Glow (sweat)

-           Ethically-challenged (A Congressman)

-           Lobbyist (One who offers bribes, but went to a good college)

-           Quantitative Easing (Money Printing)

-           Contingent Convertible (A Way to get Around Bank Capital Standards if the sh$t hits the fan).

And now, hoping you are loose, and have removed hot pokers from your general vicinity:

- Providing Liquidity: The evolution of the SOES bandits in the 1990’s into DATEK, ISLD, NSDQ, and finally Big HFT firms who run ahead of your orders. You bid $21.04, six of them bid $21.05 and take stock up to $21.18. This automated sludge is now somehow Providing Liquidity, because it has been repeated often enough. They didn’t provide you liquidity; they screwed you and provided you heartburn. And as we all knew they would they are actually meeting with regulators and claiming that if anyone attempts to stop them, they won’t provide their liquidity anymore. Read the article here:

If You Regulate Us We Won’t Provide Liquidity Wahhhh

By the way, Jack Vensel, the gentleman towing that party line in the above article, is a friend of ours from back in our Instinet days. I fondly remember grabbing a cup of Timothy’s coffee with him many mornings outside on Broad Street as well. He is a good man, and a great salesman. Citigroup is lucky to have him. The Messenger does not equal the message.

Read More

Category: Federal Reserve, Think Tank

Mervyn King: Anger at the banks is justified


Anger at the banks is justified, Mervyn King says
Philip Aldrick
Telegraph, 01 Mar 2011

Category: Bailouts, Video

Trichet hints to watch out for higher rates

German bonds are falling sharply, particularly on the short end (2 yr yield is up 20 bps to 1.75%, the highest since June ’09 following hawkish comments about inflation from ECB Trichet in his press conference. He said inflation risks have moved to the upside and the central bank must use “strong vigilance” in monitoring…Read More

Category: MacroNotes

The Cramer Abides

Dow Jones’ Paul Vigna has had it up to here with James Cramer. Yesterday, in a post titled Jim Cramer is an Insufferable Jackass, Vigna laces into the C-man for “bad calls” and other issues. With great chivalry, he defends the honor of (the fair maiden) Kelly Evans who, despite her apparent youthfulness, needs no…Read More

Category: Financial Press, Really, really bad calls, Television

Libyan Pres Sheen/Moammar and a Half Men

As seen by the S&P futures this morning, the market seems to have entered a more manic phase of its cycle as the moves are getting a bit more violent in either direction following every tick in crude prices. It’s certainly interesting times. With this said, it’s become indistinguishable between the recently expressed thoughts of…Read More

Category: MacroNotes

Visualize Economics Upcoming Income Zine

Catherine Mulbrandon does great work at Visualizing Economics.

She is starting a very cool project at Kickstarter:

check out the video:

Category: Digital Media, Video

“Extend & Pretend” Practices Attracting SEC Scrutiny

The SEC is investigating bank practices that seem to have been enacted with the blessing of the Fed and Treasury: Extend & Pretend. Many of the bailouts, mortgage mods and behaviors we have today exist to serve a single purpose: To allow the banks to kick the can down the road as far as they…Read More

Category: Bailouts, Credit, Real Estate

Melt Up?

Futures are very strong today — I expect trading today will be the key pivot point of this rally. If it fails today, we should expect significant downside, on the order of 5-10%. If the rally shows breadth, volume, and a close near the highs, it will make me rethink my correction stance. More to…Read More

Category: Markets

97% of All U.S. Mortgages are Backed by the Government

Washington’s Blog strives to provide real-time, well-researched and actionable information.  George – the head writer at Washington’s Blog – is a busy professional and a former adjunct professor. ~~~ I heard a recent talk by Richard Wolff – Professor of Economics Emeritus at the University of Massachusetts in Amherst (PhD in Economics from Yale) –…Read More

Category: Real Estate, Think Tank