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Having seen long-bond yields collapse on heavy volume immediately after The Fed's decision last week to hike rates, it appears the "policy error" message was just too much to bear for an un-manipulated market. The last 2 days have seen a very light volume 13bps surge in 30Y yields, now back above the Maginot Line of 3.00% - erasing any "policy error" questions post-Fed... for now.

Of note is the fact that China's Yuan has strengthened the last 3 days - correlating with the weakness in Treasuries.

Charts: Bloomberg

DEC

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IMPORTANT SILVER KEY FACTORS: 3 Must-See Charts

Posted with permission and written by Steve St. Angelo, SRSrocco Report (CLICK FOR ORIGINAL)

Earlier this month, Puerto Rico narrowly avoided default by utilizing a revenue clawback end-around to make $354 million in debt payments. Some $273 million of the total due was tied to GO debt, meaning that had the island missed the payment, a cascade of messy litigation would likely have followed. 

Subsequently, PREPA - the island’s power utility - managed to secure a deal with creditors and the monolines that will allow for the restructuring of $8.2 billion in debt. Should the agreement materialize, it would be the largest restructuring in muni history. 

While we already knew last night courtesy of a leak by the BEA that personal spending in November rose by 0.3%, in line with expectations and up from a 0.1% increase the month before, moments ago we got the missing component, which was personal income, and at 0.3%, it too rose 0.3% in October, just above the 0.2% expected, but down from the 0.4% increase in October.

If it wasn't for America's war machine, the economy would be deep in recession. Defense spending (aircraft and parts) soared 148% in the last 3 months - biggest such rise since 2007 managing to squeeze Durable Goods Orders overall to unchanged in Nov (vs -0.6% exp). That's the good news. Everywhere else you look... terrible. Core Capex fell 1.93% YoY - the 10th consecutive YoY drop - something not seen before outside of recession.