Day 1

  Assuming we are still here to read this, Day 1 of the "new" Mayan calendar is Saturday. The market kicked off the celebration with a 50 handle drop in the SP. The alleged catalyst was the Republican party's inability to scrape up enough votes for a weak bill (Plan B) that had no chance in the Senate and the President had already pegged for veto.

What traders should take note of was the loss of market functionality as the Baumgartner-esque fall gained speed. We firmly believe that an event of this type - universal selling opinion and loss of market function - is coming to the bond market in 2013. The quiet passing of the EOTW will not diminish the amount of apocalyptic market prognostications in the months ahead, unfortunately.

The Sp is not even down on the week (although it was during the flash crash last night). The 10 year note remains a half a point lower to the same marker.Our orientation to "calming down" appears to be far more prescriptive than descriptive at this juncture.


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