Apakah Gelembung Obligasi AS Akan Segera Pecah?

Written by Denny   // August 31, 2013   // Comments Off

Let’s be clear. We’ve intentionally blown the biggest government bond bubble in history. We need to be vigilant to the consequences of that bubble deflating more quickly than [we] might otherwise have wanted. The biggest risk to global financial stability would be a disorderly reversion in the yields of government bonds globally.”

- Andy Haldane, Bank of England director of financial stability


“Words pay no debts.”

- William Shakespeare

Hari ini level hutang Amerika Serikat dan negara-negara maju lainnya mencapai rekornya. Artinya bahwa sedikit saja terjadi kenaikan bunga maka akan menghancurkan anggaran pemerintah. Dalam kasus Amerika Serikat, anggaran tahunan sudah defisit menembus $1 triliun.

Bahkan, jika yield obligasi 10 tahun AS kembali ke areal wajarnya, yakni sekitar 6,5%, akan membuat defisit semakin tak terkendali, yang justru akan mengakibatkan pencetakan uang lebih besar dan mendorong devaluasi nilai tukar dollar ataupun aset-aset dalam denominasi dollar yang Anda miliki.

Dengan meliat grafik di bawah ini, Anda dapat melihat seberapa rendah yield saat ini dalam konteks sejarah:


Serta juga perlu diperhatikan rata-rata yield obligasi AS 10 tahun sejak tahun 1960an yang berada di 6,5%. Sementara yield saat ini di bawah level 3%.

Karena harga obligasi berbanding terbalik dengan yield-nya, setiap terjadi kenaikan yield maka konsekuensinya bagi para investornya adalah kehancuran.

Belakangan harga obligasi merosot – yang mendorong yield, yang bergerak berbanding terbalik dengan harga, melonjak – sejak ketua umum the Fed AS, Ben Bernanke, memberikan indikasi awal bulan Mei lalu bahwa bank sentral AS tersebut akan mengurangi program stimulus $85 milyar/bulan untuk membeli obligasi dalam rangka mempertahankan tingkat bungan rendah.

Sejak awal Mei tersebut, yield obligasi 10 tahun AS melonjak lebih dari 1 persen, dari 1,62 persen ke sekitar 2,90 persen di pekan lalu. Dan ini mewakili peningkatan 79% borrowing cost pemerintah AS hanya dalam kurun waktu 3 bulan!

Di saat yang sama, ini merupakan kenaikan terbesarnya setidaknya sejak 1962, demikian menurut Dan Greenhaus, chief global strategist dari sekuritas BTIG di New York.

Alasan lain mengapa harga obligasi AS memperoleh tekanan jual terbesarnya dalam sekitar 50 tahunan tersebut adalah tidak berhentinya penjualan obligasi AS oleh antara lain adalah Cina dan Jepang.

Berikut adalah 4 artikel pendek Tyler Durden dari www.zerohedge.com yang akan memberikan pencerahan mengenai apa yang dilakukan investor asing dengan kepemilikan aset obligasi AS mereka, bagaimana dampaknya di pasar perumahan, dan mengapa diproyeksikan hampir pasti sejarah akan berulang dalam waktu dekat ini:

1) TICsaster: Foreigners Sell More US Securities Than After Lehman Bankruptcy (August 15th)

While Americans were blissfully BTFD in June, and enjoying the media propaganda that “all is well” and the beard has their back (he does, but not in the conventionally accepted way) foreigners were selling. Did we say selling? Pardon, we meant dumping with a vengeance, throwing out the boatload with the bathwater, with both hands and feet and getting to da choppa.

As the just released TIC data report indicates, in June foreigners, both private and official, were hitting every bid they could find. Literally. For the first month ever, every single security class was sold off: Corporate stocks: sold – $26.8 billion; Corporate Bonds – sold $5.0 billion; Agencies: – sold $5.2 billion, and, perhaps the culprit of it all, Treasuries, saw the biggest dump ever, as foreigners sold an epic $40.8 billion! Adding across the various asset classes, the consolidated foreign sale in June 2013 was worse than Lehman and the month after it.

Somehow to foreigners, Bernanke’s Taper Tantrum was a more shocking event than the biggest bankruptcy filing in history (one which launched the global central bank scramble to buy up everything that is not nailed down).


Still think it’s priced in? If just the speculation that Bernanke may taper launched the biggest US security dump by the rest of the world in history, what happens when speculation becomes fact?

Source: TIC

Catatan Pribadi: Untuk menjawabnya, menurut saya sebelum fakta berbicara dampak pengurangan stimulus ini sedikit-banyak sudah terantisipasi di pasar obligasi.

2) China, Japan Sell Most US Paper In Years; Foreign Treasury Holdings At 2013 Lows (August 15th)

And the bid hits just keep on coming.

While previously we reported the foreigners as an aggregate class sold the most gross US securities ever in the month of June, we also learned that in June the biggest selling came from America’s two largest creditors: China and Japan (excluding the Fed of course, whose P&L losses are now approaching $300 billion in the past 3 months, or would if the Fed marked to anything but unicorns).

In June, the two countries combined sold $42 billion, with each selling over $20 billion: the most in years.


What is interesting is looking at the composition of the sell off: the bulk of it was in the form of short-term Bills, as both countries were actually buyers of coupon securities. Net of coupon purchases Bill sales were even worse, or over $50 billion for the two countries alone.

Which also explains why Bernanke scrambled to make the distinction between tapering and tightening: supposedly without this distinction the pressure on the 3-6 month bucket would have been so large that not even Bernanke’s “forward guidance” would be able to offset rising short-term rates, which as everyone knows, would mean game over at a time when the economy is still at stall speed and when the disconnect between real future inflation and Fed-central planning implied growth rates are the biggest ever.

Regardless of the factor, the reality is that America’s creditors are saying goodbye just at a time when Bernanke is preparing to taper. The bottom line: Grand total foreign TSY holdings dropped to just over $5.600 trillion, down $57 billion in one month, and the lowest total in 2013.


If that is what the Chairman wanted, he got it.

Source: TIC

3) “The Bearish Trend Has Resumed” – Don’t Show “A Tweeted Out” Bill Gross This Chart (August 18th)

On Friday, Bill Gross, in a surprising act of defiance, sent out a tweet that promptly moved the bond market in the wrong direction. To wit:

What happened next was certainly not what the Fed and Treasury desired: the 10 Year moved wider to fresh 2 year highs.


While the subsequent release of a Hilsen rumor managed to pull back the Friday yield blowout somewhat the pain may just be starting. Especially for Bill and his hundreds of billions in long rates exposure.

Fast forward to two hours ago when in the latest tweet from Gross there was a distinct sense of desperation. We don?t know if there was a tap on the shoulder from Washington D.C. to precipitate it, but we wouldn’t be too surprised:

Maybe it is. But if the following just released forecast of where the 10 Year is going, from Bank of America?s chief technical strategist Mac Neill Curry is accurate, not only is the bond bottom nowhere near but we sense a Tweet storm is coming from Bill Gross.

From BofA:

After 5 weeks of range trading, US Treasury yields have resumed their bear trend. US 10yr yields target 2.951%/3.045% before greater signs of top emerge. Bulls need a break of 2.730% to invalidate the bearish potential.


While the above is nothing more than a few squiggly lines and their extrapolations, in the New fundamental-less Normal self-fulfilling prophecies (i.e., technicals) have a way of, well, self-fulfilling. The only problem with a blow out in yields to north of 3% is that not only does it kill any mythical housing recovery, it outright obliterates any hopes of a continuing GDP tail wind from the housing market, even from investors, speculators and flippers. We are confident we are not the only ones to notice that the APR on the 30 Year Fixed FHA from Wells just soared to over 6% – a level that has no place in an economy that is “growing” at 1.5%.


But before we lament the end of the great 30 Year bond market, we will simply recall that what is happening now is a carbon copy of what happened two years ago, when all it took for yields to plunge over 100 bps was a 20% drop in equities following the Great Debt Ceiling fight and the US downgrade.

Because there is nothing easier for Bernanke to do (in 15 minutes or less) than to enact a wholesale scramble out of stocks and right back into bonds, when he needs it. (All emphasis is mine.)

Then only question is “when”?

4) “Buyer Of Last Resort”: Guess The Mystery Buyer X (August 20th)

As we previously reported, using TIC data, in the month of June the international community did something it has not done in years – it sold US Treasuries with passionate zeal and reckless abandon. In fact, in that one month alone, $57 billion in total Treasury holdings (from $5.657 trillion to $5.601 trillion) was dumped in order to avoid major and accelerating losses. And yet there was one entity that was buying, on a virtually matched dollar-for-dollar basis, all that the foreign entities had to sell. The distribution of June sales among the select largest holders of US paper, and the sole, solitary buyer, is shown on the chart below.


Guess who this?Mystery Buyer X, aka the “sore thumb”, is who boldly bought everything that no other man, woman or child wanted to buy in the month of June.

Berhenti dari kecanduan – baik itu obat-obat terlarang, maupun stimulus QE - memang sangatlah sulit dan akan memerlukan periode waktu yang disertai rasa sakit. Suku bunga memang sudah berada di rekor terendahnya dan pada nantinya akan naik dari level saat ini. Sehingga ini bukanlah sebuah akhir dari segalanya.

Namun sepertinya Bernanke dan bank sentral AS tidak tahu betapa paniknya pasar mengenai rencana mereka. Salah atau benar, pasar sepertinya tidak yakin bahwa ekonomi cukup kuat untuk mendukung rencana the Fed.

Jadi pertanyaan yang mungkin muncul adalah, Can the world afford higher interest rates”? Dan jawabannya coba dijelaskan oleh James Gruber, pendiri Asia Confidential, sebuah media cetak investasi mingguan gratis, oleh karenanya masuk dalam kategori WAJIB DIBACA yang ditulisnya di pertengahan Juni lalu:

“That’s the end of QE tapering talk then? Not quite, but it should die down somewhat, give U.S. Fed Reserve conduit Jon Hilsenrath’s latest kiss-and-tell article in The Wall Street Journal . Thankfully, it might also stop all the blather about the U.S. and global economies recovering (they’re not) and this being the end of the bond bull market (premature). What most investors fail to realize is that developed markets, including the U.S.,simply can’t afford a normalization in interest rates: higher rates on government debt would crush their economies. This means QE tapering is highly unlikely and the current money printing experiment will only end when investors lose faith in government bonds. We’re getting closer to that end game, but we’re not there yet.

If the above is right, we may be in for a prolonged period of volatility where investors expect QE to be cut back, it may indeed get cut back at some point, only to increase again when it’s recognized that any normalization in interest rates will create huge problems. For emerging markets such as Asia, it’ll mean increased volatility, although I’d argue the past week’s stock market moves are reverting back to normal from an abnormally tranquil period over the past 3-4 years. This will create some opportunities, but be aware that the odds still favor a bond market crash at a later date. (All emphasis is mine.)

What’s behind the past week’s action?

What explains the tumultuous market action of the past week? Put simply, there have been escalating fears that U.S. Federal Reserve will cut back on its US$85bn a month stimulus program. This has led to rising U.S. bond yields over the past month, thereby putting upward pressure on yields around the world.

Cutting back on QE would mean reducing the printed money that the Fed has been using to buy bonds. That would result in less liquidity, less money in the financial system. The printed money has helped support asset prices, particularly stock and bond markets. Less liquidity would reduce this support.

Much of the printed money had leaked into areas offering the best growth prospects, primarily emerging markets such as Asia. This led to some spectacular stock market performance, especially in South-East Asia. Naturally, talk of QE cutbacks hit the best performing, less liquid markets such as Thailand, the Philippines and Indonesia especially hard.

Japan is another matter. Stimulus equivalent to 3x the U.S. as a proportion of GDP and an inflation target of 2% has resulted in manic action across Japan’s stock, bond and currency markets. The yen has snapped back after being oversold, but remains extremely vulnerable given the stimulus policies of the Bank of Japan (BoJ).

Meantime, Japan’s bond market has investors fleeing due to a 2% inflation target almost guaranteeing them large losses and a central bank intent on keeping yields low to prevent interest being paid on government debt spiraling out of control. Investors are starting to realize that the government may not win this battle.

There is an alternative view: that the reason for the recent Japanese volatility is that the BoJ is backing away from its inflation target and stimulus efforts. It’s a laughable notion put forward by seemingly respectable commentators (see here ). It ignores the fact that if the BoJ’s efforts succeed, rising inflation will eventually lead to rising bond yields and interest rates, which will kill the Japanese economy (see here for my previous article on this).

Later in the week, of course, the Fed came to the market’s rescue. Via its Wall Street Journal mouthpiece Jon Hilsenrath, the Fed essentially tip-toed back from earlier suggestions that it would soon reduce QE. Here’s what Hilsenrath had to say:

“The chatter about pulling back the bond program has pushed up a wide range of interest rates and appears to have investors second-guessing the Fed’s broader commitment to keeping rates low.

This is exactly what the Fed doesn’t want. Officials see bond buying as added fuel they are providing to a limp economy. Once the economy is strong enough to live without the added fuel, they still expect to keep rates low to ensure the economy keeps moving forward.”

The math against higher rates

Amid all the hoopla about whether the Fed will cut stimulus or not, investors (and the mainstream media which covers them) seem to be ignoring a more fundamental issue: can the developed world cope with a normalization in bond yields and thus interest rates?

To answer this question, let’s crunch some numbers. Bond guru Jeff Gundlach has looked at the impact of higher rates on the U.S. and he doesn’t like what he sees. He suggests that if interest rates in the U.S. normalize and increase 100 basis points annually over the next five years, the interest expense on government debt would rise from US$360 billion last year to US$1.51 trillion.

To put this into perspective, the recent U.S. government cutbacks which many worried would tip the economy into recession totaled just US$85 billion. Any normalization in rates would result in brutal cutbacks to government programs, seriously impacting the economy.

For another example, we can look at Japan. As I’ve stated on many occasions, if rates rise to just 2.8%, interest on Japanese government debt would be the equivalent of 100% of government revenues.

The implications of higher bond yields and higher interest rates would go well beyond government debt though. Other countries with fewer government debt issues would suffer too. For instance, my native Australia is relying on the property sector (a bubble slowly deflating) to pick up some of the slack from a mining sector which is getting hammered by a slowing China. Any rise in Aussie rates would quash any hopes of a housing recovery (even if it was highly unlikely to happen anyway).

In Asia, a normalization in rates would have a broader impact. Higher rates and tighter money would hit elevated asset markets across the board, including the stock, bond and property markets. Those which have benefited most from the low rates and subsequent money inflows, such as South East Asia, would be hurt most. In effect, the past week would be a taste of things to come.

A bond crash will have to wait

If I’m correct, central banks can’t afford to turn off the stimulus tap. If there are any signs of rising bond yields, these banks will print more money to buy bonds and keep the yields down. In other words, you shouldn’t expect less stimulus going forward, but more.

Central banks can keep this game going for a long time, but there will come a point when the bond markets will say enough is enough. As I wrote in an article on Japan recently:

“In many respects, Japan is the template for what’s to come in other developed markets. After an enormous credit bubble which burst in 1990, Japan has refused to restructure its economy in order for it to grow in a sustainable manner. Instead, it’s chosen the less painful route of printing money to try to revive the economy and reduce debts in yen terms”

“The trouble with this is that there comes a point where bond investors lose confidence in the ability of the government to repay the money. These investors then refuse to rollover government debt at low rates. When bond markets dry up, they normally do so quickly. The current wobbles in the Japanese bond market can be seen as a prelude to this endgame.

Though Japan has escaped its day of reckoning for a long time, other developed markets are unlikely to be as lucky, given the extent of their indebtedness and continued commitment to flawed policies.

What it means for Asia

Investor reaction to recent market volatility in Asia has been fascinating to watch. It’s almost as if investors have forgotten that emerging markets, and particularly Asia, experience sharp spikes and dips on a regular basis. It’s a classic case of an investor bias known as recency bias, which is essentially extrapolating from recent events into the future.

The reason that I say this is that when I worked in South-East Asia for three years (2006-2009), the volatility experienced during recent weeks was the norm rather than the exception. And colleagues back then who’d been through the Asian crisis thought that I’d experienced little of the volatility that South-East Asia had to offer!

The recent volatility though is likely to become the norm again. Any hint of less QE will see hot money leave Asia, only to come back when it becomes clear that stimulus should be here to stay.

What Do the Charts Say?

MacNeill Curry dari BofA mengingatkan 2 hari lalu bahwa “bond markets are flashing warning signals of a change of trend.” Secara khusus, dia mencatat bahwa obligasi AS bertenor 10 tahun tengah beresiko meningkat jika yield kembali berada di bawah 2,802%:

US 10yr Note futures at risk of a bullish turn


“We have been and remain US Treasuries bears, targeting 3.045%/123-02 in 10s. However, evidence for a bullish turn in trend is RAPIDLY INCREASING. Specifically, the persistent Bullish Momentum Divergences and Friday Bullish Reversal Candles across much of the curve all warn of an earlier than anticipated turn in trend. For now we remain bearish, but a break of 2. 802%/125-09 in 10s would force us to change our view.


Bud Conrad, seorang Chief Economist di Casey Research, benar-benar memberikan ulasan yang tepat dalam artikelnya yang ditulisnya belum lama ini:

“As the American public doesn’t save much, and because foreigners are stepping away from US government debt, the Fed is left as the buyer of last resort and will have to keep up its QE.

Among a number of problems, the money creation required for the Fed to serve as the government?s lender of last resort can be very inflationary once it ultimately bleeds into the economy. For now, most of the new money has been bottled up on the balance sheet of the Fed. With low rates, that is manageable. But if rates rise, as they eventually must in the face of rising inflation and a loss in confidence in the dollar, the interest the Fed pays on deposits rises as well, putting the viability of the institution at risk.

In addition, as rising rates increase the cost of servicing the government?s many debts, federal deficits will also rise. And that has the very real potential to create the equivalent of an economic death cycle as foreigners, and pretty much anyone other than the Fed, rush to the exits on US government paper, causing interest rates to rise further.

While it is impossible to say with any certainty when the US government bond bubble, the largest in history, will burst, the recent up-moves in interest rates should serve as a clear warning shot. From the charts, it looks like the foreigners have taken notice.”

Terakhir, adalah sebuah gambar kartun lucu mengenai obligasi.


Terima kasih sudah membaca dan semoga beruntung!

(Sumber: www.kontan.co.id)


gelembung obligasi AS

Nico Omer

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