6 Responses to “September 5, 2013”

1. Nestor says:

   September 5, 2013 at 10:15 pm

   “Wow! Not a nice day to own Treasuries”

   would you be surprised if someone go a hold of the numbers early? not that something like that ever happens… god forbid.

2. nervousone says:

   September 6, 2013 at 8:43 am

   hello prefholders . . . you’re lucky . . . even with the big ADP number yesterday, the big numbers today sucked . . . good times are far, far, away!, this should mean no end to tapering in the foreseeable future, and bond yields should start to drop . . .arian, you can hold on to your $100 bill for another month by the looks of it! . . . here’s the release:

   ————————————

   “Total nonfarm payroll employment increased by 169,000 in August, and
   the unemployment rate was little changed at 7.3 percent, the U.S.
   Bureau of Labor Statistics reported today. . . .The change in total nonfarm payroll employment for June was revised
   from +188,000 to +172,000, and the change for July was revised from
   +162,000 to +104,000. With these revisions, employment gains in June
   and July combined were 74,000 less than previously reported.”

3. Nestor says:

   September 6, 2013 at 8:17 pm

   what does luck have to do with anything?

4. nervousone says:

   September 7, 2013 at 2:51 pm

   Hi Nestor,

   It’s actually got everything to do with holding bonds and prefs these days.

   You suggested that Thursdays losses might have been due to insider info on the numbers. Maybe, but the actual move came at about 2pm thursday when the ADP number was released and it was stronger than expected. Bond yields moved up 8bps in about 15 minutes, and all the carnage James described on the Thursday pref summary happened in the back half of the trading day following the ADP report.

   Luck . . . because usually, the govt number the next day performs in lock step with the ADP number; if this happened we would have had another 10 bps added to the long bond on Friday, and my fearful prediction of many perpetuals trading under $20 would almost certainly have happened.

   What actually happened was a poorer than expected jobs number, combined with the usually overlooked revisions, that also dropped the quarterly number down substantially . . . this stabilized the long bond, and put a floor under the pref blood-letting. This is why pref holders who are concerned about the current value of their holdings were very, very lucky yesterday.

   However, the Fed is dead set ready to start tapering; in fact, a couple of Minion regional presidents stepped up to the mike, and said bond buying should be cut to 70B from 85B anyway.

   The sad reality of this situation is that anyone holding long bonds, or prefs in general, are 100% at the mercy of the whims of the Fed’s tapering banter, and the media hype that will follow it. In the end, and years down the road, none of this will matter, but right now, you can pretty much relate all dramatic pref moves to this issue.

5. Nestor says:

   September 7, 2013 at 4:47 pm

   are you a pref holder worried about your holdings?

6. nervousone says:

   September 8, 2013 at 10:06 am

   Nestor . . .

   I’m never worried . . .

   but always nervous . . .

   (and occasionally analytical!)