June 25, 2008
The Big Picture — 13-week Treasury Bill (Yield), Last Decade
Here’s a monthly chart of the 13-week T-bill Index going back ten years. Looks like boom, bust, boom, bust to me. Can someone explain if this is the result of central bank meddling or what? Tinfoil hatters, please control yourselves in the comments. :-)
Cat: | Time: 4:55 pm (utc+8)
June 25th, 2008 at 5:54 pm
Hey there
No surprises in the path of the 13-wk yield - it’s the part of the market-determined term structure that the Fed can most directly influence.
as for the rather bizarre spike low that you’ve marked, I think it’s probably a bad tick. See if the same low is seen in daily data - and if that is actualyl the case, that the path to the spike low makes sense… it could even be a bad intraday tick that hasn’t been corrected. I’ve had data services provide live streaming tick data on the Dow mini where the data changed by two roders of magnitude within five minutes (i.e., from 10700-odd to 10.700-odd, and back again). Plays merry hell with anybody who doesn’t have some basic ‘WTF’ checks in their code…
Maybe some intern leant on his keyboard during lunchtime and sold hundreds of contracts at market during the lunch lull. That sort of thing has actually happened in the past - I seem to recall an indcident that where some doofus moved either EURUSD or USDJPY with a piece of idiotry like that.
Cheers
GT
France
June 25th, 2008 at 5:57 pm
Oh man, my typing reveals a Greenspan-esque level of incompetence in that comment above.
… ACTUALLY the case …
…ORDERS of magnitude …
… an INCIDENT [LIKE] that …
Stupid French keyboard (and fat fingers)
Cheers
GT
France
June 25th, 2008 at 6:01 pm
GT: It may be a bad tick, but recall the spike down last August, that was real. I’ll have to look at the shorter time frames, thanks for your comment.
June 25th, 2008 at 10:03 pm
That’s not a bad tick. It’s the collapse and buyout of BSC before JPM increased its offer to $10 equivalent.
June 26th, 2008 at 4:40 am
what central bankers/planners –first & foremost the despicable, criminal USFed– do is juice the system and then attempt to prevent any & all correction… consequence of course is exaggerated expansion (boom) rather than a more gradual “natural” growth… which is even futher exaggerated under the current fiat fractional-reserve system since there is nothing to limit the Fed in terms of how much they can juice it (until of course it just drops dead)… when the inevitably correction does occur –since the underlying structure of the boom was artificial/fraudulent– it is exaggerated as well… essentially, there is no such thing as a bust unless there is a boom preceeding it — the very nature of booms is that they are manufactured [- Austrian theory]… the Fed really only had two tools at its disposal: outright monetary/credit creation and finagling with interest rates (which the $IRX chart here embodies)… of course the boom-bust cycle sine wave is going to show up on pretty much all charts (since the Fed is the heart of the system and affects everything in it)… the always brilliant Bill Bonner (DailyReckoning.com) put it best: “The force of a correction is equal and opposite to the deception and delusion that preceded it.”
agree with Brian that the Hammer candle was BSC-induced and not a bad tick…
June 26th, 2008 at 5:57 am
in short, yes, boom-bust cycles are the direct result of central bank meddling…
one of the primary roles (and reason for creating) a central bank was to increase stability in the banking system and promote stable prices — the exact opposite of what they do…
June 26th, 2008 at 9:12 pm
$IRX (plotted out 120 days) and SPY:
http://stockcharts.com/h-sc/ui?s=$IRX&p=D&yr=3&mn=0&dy=0&id=p60269212648
June 26th, 2008 at 9:20 pm
Thanks for the chart, Jill.