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JP Morgan dumps all short-term US treasuries as default approaches next week with no deal on the debt ceiling

Posted on 12 October 2013 with 7 comments from readers

The US Government shutdown continues and we are only five days from national bankruptcy when the debt celing is reached. Fund managers at Fidelity and JP Morgan have taken the prudent view and have dumped all their short-term US treasuries just in case of the first default in the history of the union.

Not wishing to panic markets the bank said: ‘Although JPMorgan Investment Management continues to believe that the probability of a US government default is low, it has taken certain precautionary measures with respect to the money markets.’

Armageddon plan

Selling out is certainly a way to protect against the Armageddon scenario. But then if it is bordering on the impossible to imagine why take this precaution? Does somebody at the largest US investment bank have an inside track and not like what they are hearing?

The surging yield on one-month treasuries shows how the fear factor is growing in Washington DC:

If JP Morgan is out of the one-month US treasury bond market what does that tell you? More importantly what signal does it send to big holders like the Chinese and Japanese? We live in interesting times and next week could be particularly interesting.

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Posted on 12 October 2013 Categories: Banking & Finance, Bond Markets, Global Economics, Investment Gurus, US Stocks

7 Comments posted by readers:

Comment by Andy - 12 October 2013

I think they dumped their Silver and Gold positions as well lol.. Both took quite a dive this week. Some major losses for Gold fans on Friday. Now is definitely not the time to be buying. Those selling the pops are making huge profits as every time it goes up it is sure to go back down again. I reckon we may drop under $1200 this coming week.

Comment by Trailer Park Investor - 13 October 2013

Tick Tock, Tick Tock
Forget gold, Say NO to silver, dump your platnium.
Now is the time to buy FOOD, WATER & WATER FILTERS

Comment by AG47 - 13 October 2013

The Dollar is going nowhere. Better get out of all paper and get into physical Gold, Silver, Guns and Ammo. Do it now while you still can. Time is running out.

Comment by Vincent Cate - 14 October 2013

If everyone sells any bonds due in the next month to the Fed, then nobody has to worry about default. Hyperinflation maybe, but not default.

Comment by ak - 14 October 2013

it looks like not just big banks but everyone knows and has been involved somehow with th collapse …by pushing america flying to the cliff and not is just a landing time

Comment by DW - 15 October 2013

Its too late for JP Morgan, bye bye!

Comment by Finance houses play cat and mouse over US default - 09 October 2014

[…] at the largest US investment bank have an inside track and not like what they are hearing?… TAP –  It’s equally possible that JPM dumps their holdings to create a stampede […]

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