Jim Willie Discusses The Bond Bubble

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Last week, Jim Willie offered his opinions in a one hour Q&A session with subscribers. In return, today he offers a wide-ranging discussion on the current state of affairs, particularly QE∞ and the U.S. bond market bubble.

This is a detailed, extensive discussion so I've decided to protect your sanity and your time by releasing it in two parts. This first segment is just under thirty minutes and in it Jim discusses QE∞, the folly of a "Fed taper", the pricking of the bond market bubble and the new prevalence of flash trading or HFT in the bond market.

I plan to release the second half of this interview later tomorrow or Friday, once you've had a chance to fully digest part one.

FYI...the two charts below are discussed and referenced by Jim during the course of this podcast.

Enjoy...

TF


115 Comments

wildstylechef's picture

ya BABY!!!!!!!!!!!!!!

1st

finally and what a day for first when the markets finally smell the coffee and realize that the goose is cooked. Thank god that I live in the great white north cause some wacko's have control of the US government. listening to them is just unbelievable for the justifications for their actions, bunch of 12 year olds that have been told that its past their bed time and are pulling a tantrum

abguy4's picture

Two-fer? I disgust myself

Now I'll go listen to my main man Willie~!

AlienEyes's picture

number 3

Number 3

DayStar's picture

Go Furth and Conquer!

Furth on a TF thread!

bratlever's picture

trillion dollar bond derivatives

Sure would like to know what the final % yield is realized with these crap derivative  bond vehicles.

codesurfer's picture

Thurd?

Can it be?

Nah... But Top Tenner Nonetheless :)

SilverSurfers's picture

6th?

Yeah, Top tenner!!!

Meh, what a ride!! yesterday down a buck, today up a buck, in silver, meh, from the pits of depression to the top of extacy. I dont mind volatility, but geeze, it seems totally mindless, no trend, just a total mind screw. Im gonna get that guy, who ever he is. Its a rollie coaster, and wez all being taken for the ride, day in, and day out.

10year yield 2.6ish off highs, flat lining, $Index sliding broke 79.8 on the down side as a new low, and there has been a series of low, like the cavalry comes to the recue each day to pick it up on its low, but the trend is down.

Wizard's picture

Just a Gut Instinct

Since the first version of QE was introduced to it's current version, I believe some Off-Shore Accounts have grown by orders of magnitude 

Just for funding the very thing discussed about opposite sides of the trade and was priced into determining how much QE to have in the first place

Or QE out the front door and Off-Shore Accounts out the Back Door.

The same way they distributed the 16 trillion out the back door and 700 Billion out the front with the Bail-Outs

$16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression

http://www.sanders.senate.gov/newsroom/press-releases/the-fed-audit

GAO Report>>>http://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

W

silverwhere's picture

Pimco's Gross: low interest rates may persist for decades

The world according to Bill Gross.

Pimco's Gross: low interest rates may persist for decades

By Sam Forgione

Wed Oct 2, 2013 12:56pm EDT

NEW YORK (Reuters) - Bill Gross, manager of The Pimco Total Return Fund, said on Wednesday that the global economy may be facing low policy rates for decades.

Gross wrote in his October investment outlook that investors should "bet against" expectations that the federal funds rate - the U.S. Federal Reserve's benchmark short-term borrowing rate - will rise by one percentage point by late 2015.

"The U.S. (and global economy) may have to get used to financially repressive - and therefore low policy rates - for decades to come," wrote Gross, a co-founder and co-chief investment officer at Pimco, whose flagship Pimco Total Return Fund has roughly $250 billion in assets.

"Right now the market (and the Fed forecasts) expects fed funds to be 1 percent higher by late 2015 and 1 percent higher still by December 2016. Bet against that," he wrote in the letter entitled "Survival of the Fittest?"

http://www.reuters.com/article/2013/10/02/us-funds-investing-pimco-idUSBRE9900YV20131002

.

DollarMenu2's picture

Thank you...

Thanks for posting the JW podcast publicly.

Missiondweller's picture

Jim Willie makes an excellent point..

about the effectiveness of lowering interest rates now that we have a drastically reduced industrial base. With very little manufacturing, reduced interest rates cannot stimulate industrial production that creates economic activity. Instead we have a "consumer economy" that makes up 70% of our economy. Though lower rates can reduce borrowing costs it does not have the same multiplier effects as industrial production.

Manufacturing puts money into workers pockets who can then go out and spend while consumerism just allows people to increase their "spending leverage" with more debt. They are NOT equal.

AlienEyes's picture

Da, Comrades. Would you like to inform?

The USPS is looking for snitches and informers. They have hired IBM to run the operation, probably for some measure of plausible deniability. I received an invitation to join in on the covert spying on postal workers and their home post office. I would be rewarded with free gift cards, good at many stores. I was also promised a P.O. bar code reader....and the software to install it on my computer.

Here's the rub. I have a long time friend that works for IBM/Security so I gave him a call. After telling him about the letter I had received in a plain envelope, (The letter was marked "confidential" and "not for distribution or copying") he had this to say....."Do NOT install the software if they send it unless you want your computer bugged 24/7 ! You got the letter because of two reasons : They want you to spy on the P.O. AND they want to spy on you."

It's the gooberment's version of multitasking. You can go to the following website and click on 'Frequently Asked Questions". I marked out my name, address and my access code & password and then gave it too my mailman and told him to spread it around.

http://www.reportez.com/

Missiondweller's picture

Turd, Thanks for making this

two parts.

It does make it easier to listen to when its broken up.

Perhaps you may even consider making the first 10 minutes free in the future with the rest being "in the vault".

Urban Roman's picture

And then, of course, this can happen too:

Mantis just mentioned Bitcoin in a recent thread ...

BitCoin Plunges Following US Government Seizure Of Silk Road Website

Tyler Durden's picture

Earlier today, one of the most popular websites that use and promote the use of BitCoin, Silk Road, was shut down by the US government. As Reuters reports, U.S. law enforcement authorities raided an Internet site that served as a marketplace for illegal drugs, including heroin and cocaine, and arrested its owner, the Federal Bureau of Investigation said 

silverwhere's picture

Bill Gross Letter - Survival of the Fittest?

Found it  >>>  here is a must read letter from Bill Gross; in its entirety.

Click on link below.

INVESTMENT OUTLOOK

October 2013

Survival of the Fittest?

William H. Gross

http://www.pimco.com/EN/Insights/Pages/Survival-of-the-Fittest.aspx

.

zman's picture

T-bond selling

Is there any data available for July, August, and Sept for the buyers and sellers in the T-bond market? 

I think this is key information, if foreigners are dumping and in what amounts? 

Urban Roman's picture

But, it's worth noting

... that someone, or a lot of someones, still think that one BTC is worth more than one barrel of oil. 

flyinkel's picture

Wizard

Every person with a braincell left in his head should read and commit to memory the 2 articles you posted.  And yes, I also believe your "gut instinct" is exactly on target.

brolgaboy's picture

bearish gold/silver sentiment

are about as plentiful  as $2500 gold forecasts back in 2011

Bollocks's picture

HMMMMM

US Army and Intel: Shutdown already damaging national security

 

James Clapper, the director of national intelligence, and Ray Odierno, the US Army’s chief of staff, have both decried the impact of the government shutdown. Clapper has called employees’ unpaid furlough a recruitment ‘dreamland’ for foreign spy agencies.

"I've never seen anything like this. In my view I think this, on top of the sequestration cuts, seriously damages the safety and security of the nation," the DNI told a Senate Judiciary Committee hearing that was intended as a discussion of NSA surveillance powers.

Officials say that about 70 percent of all intelligence personnel have been forced to take unpaid leave, including 4,000 computer specialists.

This affects our global capability to support the military, to support diplomacy, and to support our policymakers. And the danger here, of course, that this will accumulate over time -- the damage will be insidious. So each day that goes by, the jeopardy increases," said Clapper.

http://rt.com/usa/usa-government-shutdown-security-647/

-------
Ok, what's coming? This is a perfect setup for a false-flag event.

49Pan's picture

Turd....Thanks

Turd,

Thanks for posting this for us.  Out of work so I have to catch what I can until I find work....oops that could take awhile....no income for the past year in industrial/commercial heavy construction layout!!!

I miss your wit and podcasts.  Maybe I am too far into PM....gee I could be addicted to something else (and use to be almost 30 years ago now) but currently it is metal.  I have always had a problem with "more" so for the past 2 and 1/2 years plus it has been the PM!!!  So, with names like Turd, PurpleHaze and DynaMoHum, I feel like I am in pretty good company!  Jimi and Frank are still without a doubt at the top of my list of my favorite music and a little mention to SRVaughn......

Thanks Again and I hope your current venture is working and I will hopefully be able to join soon.  Screw the Bernank.....yes you can delete this last remark if needed......

Urban Roman's picture

I wonder if any of those

I wonder if any of those thousands of furloughed intelligence technicians might be inspired to "go Snowden"..

(and that guy on the right looks just like Uncle Fester)

ag1969's picture

Bollocks

While I agree that the Government shutdown puts the people's security at risk, and sets the stage for a false flag, I don't think it will be because, as an unplanned result of the shutdown, all of our government structures, that have been put in place to "protect us from terrorists" would suddenly be left twisting in the wind, if it was not an intentional set up.

If our gov't were really well intentioned in protecting the people from a real foreign terrorist threat if in our power to prevent it, there is no way on earth they would shut down intelligence, furlough our defenses, and promote losing our assets to the enemy all over Obamacare. 

This is all a carefully planned set up to shock the people once and for all into believing that we just can't survive without the government and all of their immoral bullshit.

And, they certainly won't allow the sheeple to see that we can survive just fine or better without them.  If they are going to shutdown because of their own ineptitude, then by golly, those damn peasants are going to suffer.

The market manipulation we observe daily just proves to me that those in control of our gov't and markets will commit crimes of the highest order in broad daylight.  This whole shutdown and the way it is being portrayed in the media just stinks of desperation for a power solidifying catastrophe.

Look at the FEMA and DHS preps and drills and purchases.  Look at the attempted gun grab.  Look at our food storage.  In other words, look at their actions and it paints a picture.  I am no longer worried about PM's and the CFTC.  I am worried about martial law and widespread panic, violence, and starvation.

Turd Ferguson's picture

Mister Meister

MODERATOR

Does anyone else find it curious that Mister Meister would resign...without subsequent employment already secured...just three days after the sudden closing of the silver investigation?

http://www.cnbc.com/id/101075270

Hmmm....Curiouser and curiouser.

Bugzy's picture

hmmm

Curious indeed. Suspect something WILL be done soon and he does not want to be in the position to have to ignore it.

Interesting that all bankers got to go to the Whitehouse too.

something fishy, or , like you implied, maybe he cannot live with the statement he sanctioned re Silver manipulation.

silverwhere's picture

RE: Mister Meister

Hmmm is right. Very odd.

Is Bart next?

.

ag1969's picture

From India

Govt hikes tariff value on imported gold, cuts on silver

Taking cues from global price movements, the government today raised the import tariff value of gold to $436 per 10 grams, while reducing it on imported silver to $702 per kg.

Tariff value is the base price at which the customs duty is determined to prevent under-invoicing.

During the last fortnight, the tariff value of gold was at $432 per 10 grams and silver at $736 per kg.

The notification in this regard has been issued by the Central Board of Excise and Customs (CBEC), an official statement said.

The government has been taking several measures to curb inbound shipments of gold to contain the current account deficit. However, the World Gold Council has estimated the country's overall gold demand to touch a record 1,000 tonne in 2013.

http://www.financialexpress.com/news/govt-hikes-tariff-value-on-imported-gold-cuts-on-silver/1176893

ag1969's picture

Nice

BREAKING: CALIFORNIA NULLIFIES NDAA INDEFINITE DETENTION

5 hours ago | Politics, US | Posted by Michael Lotfi

 

103

California Governor Jerry Brown Signs NDAA Indefinite Detention Nullification Bill Into Law

California Governor Jerry Brown Signs NDAA Indefinite Detention Nullification Bill Into Law

Assembly Bill (AB) 351 was signed into law by Governor Jerry Brown yesterday. California is the third state to have passed legislation, which nullifies the unpopular federal provision. A selection of  AB 351 reads:

The United States Constitution and the California Constitution provide for various civil liberties and other individual rights for a citizen of the United States and the State of California, including the right of habeas corpus, the right to due process, the right to a speedy and public trial, and the right to be informed of criminal charges brought against him or her.

John Galt's picture

Funny Phone Call from Today

Here is a true story from my little corner of Bizarro World, and it took place about an hour ago.

JG - "Good afternoon, this is John Galt Inc. How can I help you?"

Caller - "Hi, my name is Candice and I am calling for a reference on 'Bob Jones'."

JG - "I'm sorry, but Bob isn't here (disclosure to fellow Turdites at TFMR - Bob hasn't worked for me since 2005). Is this about a reference for employment?"

C - "I am not at liberty to tell you that."

JG - "Where are you calling from then?"

C - "I can't tell you that."

JG - "OK. Is this a collection agency then?"

C - "I cannot tell you that either."

JG - "OK. Then all I can tell you is that Bob is not here."

C  - "It is very important that I get in touch with him. Can you tell me where I can reach him?"

JG - "No."

C - "Why not?"

JG - "Because privacy legislation in this country makes it impossible for me to ask any personal information about any employee, prospective employee or former employee. The same laws make it illegal for me to disclose any personal information about any person to any other party. Therefore I am, by law, unable to help you."

C - "Why are you being so difficult?"

JG - "I am not being difficult. I am merely obeying the law."

C - "How will I find Bob Jones then?"

JG - "I don't know, but I wish you luck."

C - "Why did you say you wish me luck? Is he dead or something?"

JG - "I don't know, but even if I did know the law says that I cannot tell you one way or the other. Good-bye."

(Click and hang up)

Goodness, gracious - being a law abiding citizen can be so much fun sometimes.

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