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Bonds

Bond yields keep fallingBonds all across the world, across all different spectrums (from gov bonds to junk bonds) have been rising (their yields falling). This is a signal that there are deflationary pressures and that people are searching for yield in an environment with few opportunities. There are other reasons too, but overall this isn't the best signal. Clearly big corporations and governments are benefiting from the situation, but this is also a fragile situation. Although the current conditions benefit some stocks and risk assets due to the highly negative real rates, this doesn't mean that everything is perfect. Personally I believe equities haven't topped and they have much more room to grow from here, but I also think a big correction isn't far away (10-20%). In my opinion bond bulls are in control (bearish on yield) and yields could fall even lower.
TVC:US10YShort
by BitcoinMacro
5
Broke(n) - Operation Twisted & The Cocaine PhenomenaWhat brings about the Fear cycle? A loss in CONfidence. The TINA Argument has remained valid for sometime. It is axiomatic. Does one buy Binds with a 100% assurance of Negative Returns? You first. Does one protect their wealth in Bitcoin? No thank you, it is a trading Instrument with ZERO intrinsic Value relative to any price. Do Central Banks enjoy Competition? No... they permit it, but only to a point for a specific Agenda. Their Agenda should be obvious by now. Are they thinking about thinking about thinking about you and yours? No. Is BTC a Tier 1 Asser on the Federal Reserve's Balance Sheet? No. Will Bitcoin see increased regulation and taxation? Yes. Why has Gold not kept up with the expansion in the Monetary Base? It never has nor will it. Gold has a function, it is non-monetary for us mere mortals and will remain as such for eternity. Wanna strap on a Feed Bag @ Taco Bell - try paying at Drive-Thru with Gold. Money is no longer money, it is a delusional promise to repay all debts Public and Private - which ceased to be viable a very long time ago. There is far too much Debt to ever be repaid with Currency. What's left, the Largest Casino on the Face of the Planet - Capital Stocks: Bonds, Stocks and Real Estate. All at absurd Valuations. If you can't afford a home, buy stocks. If you believe Bonds are going to be left for dead one day, buy stocks. If you believe it will all fail, buy Gold, Silver, Crypto. Good luck as everyone losses a Hand in this complete disaster unfolding. Everyone.
FRED:GFDEBTNShort
by HK_L61
SPY - Bearish Arrangements4422 - Gap and Crap complete. A lower High on smaller timeframes led to Sell Signals which were quickly heeded. The 50/200 are now pointing due South on 5 minute timeframe. Last Thursday the Divergences provided an enormous warning. Negative Histograms are waiting. Chasers are eyeing a considerable "Panic Cycle" setting up whereby the "everything must go sale" begins and leaves they wanting a return to "normal" - BTD Failed. It is rejection, a nasty and very sporty rejection which appears to be lost on the Herd. We continue to press our VIX Curve Trade with 21.75 today's target. I have been buying @ 2050-2055 with buys in all the way down to 2015-2025 for a larger press. Conditions in the Markets have reversed, the largest gains are made ahead of the broader Point of Recognition. The Weekly and Daily indicators are simply N A S T Y. Sellers were lurking at the Gap Fill and slammed the Chippers and Dippers. Ignore them are you peril. Catalyst abound, pay close attention to the Bond Market.
AMEX:SPYShort
by HK_L61
7
August Could Be The Start Of A Bumpy Period In MarketsLast week, in an interview on CNBC, legendary trader and investor Stanley Druckenmiller sounded an alarm. He told reporters on the financial news network, “I can’t find any period in history where monetary and fiscal policy were this out of step with the economic circumstances, not one…I will be surprised if we’re not out of the stock market by the end of the year, just because these bubbles can’t last that long.” He went on to say there is a “raging mania in all assets.” Jackson Hole could send ripples across markets like in 2020 The market expects the beginning of tightening The delta variant provides another excuse What does “transitory” really mean? Fasten your seatbelts for a very rocky ride in markets- The dollar and bonds have become risk barometers than the VIX In 2021, cryptocurrencies rose in a parabolic move to record highs. Even though they corrected, prices remain far above last year’s levels. The explosive rallies reflect the decline in the faith in government and central bank control of the money supply. The tidal wave of central bank stimulus and tsunami of government stimulus has weighed on fiat currency’s purchasing power. The stock market has risen to all-time highs because, for many investors, TINA, there is no alternative to stocks. As Leon Cooperman, the ex-Goldman Sachs partner and hedge fund manager, once said, “Buying bonds amounts to picking up pennies in front of a steamroller.” Commodity prices are trending higher in a bullish relay race that began at the March and April 2020 lows. Gold reached a record peak in August 2020. Grain and oilseed prices rose to eight-year highs earlier this year. In May, lumber, copper, and palladium reached record peaks. NYMEX crude oil futures recently rose to the highest level since 2014. Natural gas traded to highs above $4 for the first time since the peak winter season in late 2018. The last time natural gas was north of $4 per MMBtu was in 2014. Ethanol moved to its highest price since 2014, and coal to a level not seen since 2008. Last week, coffee futures traded at over the $2.15 level for the first time since 2014 before correcting. Commodities, stocks, cryptocurrencies, and other asset prices are trending higher. Residential real estate is not only a seller’s market, but prices have moved to insane levels in some regions. The bottom line is accommodative monetary and fiscal policies have planted turbocharged inflationary seeds, and markets have responded. Stanley Druckenmiller knows it is not a question of if significant volatility grips markets across all asset classes, but when it occurs. August 2021 could be a very bumpy period in markets as the traditionally volatile fall season is on the horizon. Jackson Hole could send ripples across markets like in 2020 The markets are anxiously awaiting word from the US central bank at its annual August gathering in Jackson Hole, Wyoming. Aside from fishing, hiking, and other outdoor activities, the Fed tends to use the offsite experience as an occasion to roll out monetary policy changes. Even though the 2020 summer meeting was virtual, the Fed took the opportunity to introduce a not-so-subtle change in inflation targets, shifting them from 2% to an average of 2%. After the highly inflationary CPI data over the past three months and a slew of other validations that the economic condition is far above the “target,” the Fed’s tone changed. At the recent meetings, the rhetoric became subtly more hawkish than dovish. However, this week, the central bank took a dovish step back as COVID-19’s delta variant is causing infections to rise. The variant could be a convenient reason for the Fed to maintain the accommodative status quo. The market expects the beginning of tightening Recent Fed minutes told markets the central bank debated whether they would begin tapering quantitative easing with mortgage-backed securities or government bonds. When the tapering starts, the Fed Funds rate hikes will eventually follow. The subtle change in the rhetoric increased market expectations that tighter credit is on the horizon. However, the market does not always get what it expects, and the Fed and US Treasury are notorious doves since 2008. The delta variant provides another excuse If the central bank digs deep into the excuse box, which sits next to the toolbox full of accommodative tools, it may come up with the rising number of COVID-19 delta variant cases as justification for the status quo. The powers in Washington DC will not mind as Democrats desperately want to hold onto and even expand the majority in the House of Representatives and the Senate. Liquidity and stimulus continue to prop up the economy, but the flood of the pair comes with a steep price tag. If the Fed decides to delay tapering QE or set a schedule to increase the Fed Funds rate from zero percent, it will only push off the inevitable. The bottom line is that artificially low interest rates and $120 billion each month in debt purchases are transitory policies to stabilize economic conditions. What does “transitory” really mean? The Fed’s mantra in 2021 is “transitory” when describing rising inflationary pressures. After the May CPI data, all the focus turned to lumber prices and skyrocketing home prices. In the wake of the June CPI, bottlenecks in the supply chain causing a semiconductor shortage and lack of supplies of new and used cars were thrust to the center of the excuse stage. Meanwhile, markets have been in an inflationary relay race to the top, with one asset passing the baton to the next. The stock market remains near record highs. Cryptocurrencies exploded, reaching incredible peaks in April and May, which is a direct challenge to the central bank and government control of the money supply. Commodity prices have been a merry-go-round of increasing prices. Real estate levels are out of this world. My wife and I bought a new home in late 2016. This week, smaller houses on our block were selling at over 100% above the price we paid. “Transitory” means temporary, and that a condition will pass. The Fed refused to define its measurement period for the “average 2% inflation rate,” calling it “discretionary.” Uncertainty is growing, and markets appear ready to respond. Fasten your seatbelts for a very rocky ride in markets- The dollar and bonds have become risk barometers than the VIX The price of any asset is always the correct price because it is the level where buyers and sellers meet in a transparent marketplace. The Fed may control short-term interest rates via the Fed Funds rate, but long-term interest rates reflect the market’s perception of credit. Ironically, the bond market has been taking on the Fed since August 2020. In a series of counter-intuitive moves, the US 30-Year Treasury bond futures fell from 183-06 in August 2020 to a low of 153-29 during the final week of March while the Fed purchased an average of $120 billion each month in debt securities. As inflation data began to make the Fed think about tightening over the past few months, the bonds have risen, reaching the most recent high at 167-04 in mid-July. The bond market has been moving contrary to the central bank’s signals with the futures near the highs at just below the 165 level as of July 30. Meanwhile, the dollar index reflects the US currency’s value against other world reserve foreign exchange instruments. Since the euro is the second-leading reserve currency, the dollar index has a 57.6% exposure to the European currency. The dollar index tends to move higher and lower with interest rate differentials. In the wake of last year’s pandemic, the rate gap between the dollar and the euro narrowed substantially. As the weekly chart illustrates, the dollar index fell from its highest level since 2002 at 103.96 in March 2020 to a low of 89.165 in early 2021, a drop of 14.2%, a substantial move for the US dollar. Since May, the index rallied, reaching the 93.195 level in July. The dollar index was at just over the 92 level on July 30. The index fell after the July FOMC meeting when the central bank appeared more dovish than the prior month. The high in March 2020 was a flight to quality during the worst period of asset liquidation caused by the pandemic. The decline came as US rates fell. The latest rally is on the back of the prospects for rising US rates compared to European rates and the potential for volatile markets over the coming weeks and months. The dollar and bond market are likely to reflect volatility better than the VIX index. The VIX reflects implied volatility of put and call options on S&P 500 stocks. Since market participants tend to panic during downside corrections, the VIX rallies when stocks fall. However, the stock market’s rise could be a symptom of inflationary pressures where all asset prices are rising, and that could continue given the tidal wave of central bank liquidity and tsunami of government stimulus. Even if the Fed bites the bullet and tightens credit, the process will be laborious. The central bank does nothing quickly unless it faces an unprecedented event, as we witnessed in 2008 with the financial crisis and 2020 on the back of the pandemic. Going from hawkish to dovish is a short-term affair while reversing course to a tighter approach to credit is done at a snail’s pace, in the interest of “market stability.” Meanwhile, with the 2022 midterm elections on the horizon and a green and progressive agenda in Washington DC, the spending will continue. Government stimulus in the trillions overwhelms any tweaks the Fed may make over the coming months. The price tag for inflationary policies is massive. The market is waiting for the Fed to unwrap its plans at the August Jackson Hole event. The FOMC got a lot more inflation than it bargained for when it boosted its target to an unknown and unmeasurable “discretionary” level last year. Fasten your seatbelts; markets are in for a wild ride over the coming weeks and months. The fall tends to be a volatile time in the stock market. Corrections in 1929, 1987, and 2008 came during the fourth quarter. Follow those trends as they are your only friend. The central bank and government policies may have been friendly for markets since the early 2020 lows but feeding the inflation beast with liquidity and stimulus is like giving bigger fixes to a junkie. According to Stan Druckenmiller, a rude awakening could be on the horizon. I can’t disagree, as all the seeds of financial insanity have begun to bloom. Either raging inflation or raging stagflation would roil the markets, and one of the two conditions seems unavoidable. We could look back at August 2021 as the beginning of an unprecedented and volatile period in markets. Fasten those seatbelts, hedge your bets and investments, and prepare for a head-spinning ride. It is far better to be safe and ready than unprepared and sorry when it comes to your assets. Get free early access to articles using the designated link below. Sign up for the Monday Night Strategy Call using the link provided below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CBOT:ZB1!
by Andy_Hecht
19
State of the inflation/reflation trade - Focus on CommoditiesFor several months I've been talking about the issues with the reflation trade. First it was the Dollar and some stocks topping, then it was bonds going higher, then Crypto crashing and others markets topping a few weeks later. We saw the cracks on Copper, Oil and so on. But is it over? Will the Fed actually tapper and that create issues to the market? Will the inflation keep running hot? So far what we've had was markets getting really far ahead of themselves. The risk on trade made massive moves in just 8-14 months since the crash and so things started slowing down. Bonds fell a lot (25-30%), the USD fell a lot (10-15%), Global stocks rose a lot (~100%), Commodities (30-300%) and of course Crypto skyrocketed (1500-6000%). These moves came after a period of stagnation and from extreme lows after the crash, but they are massive moves nevertheless and a break is healthy. Personally I believe a bigger correction isn't far away, but I could be very wrong as my long term picture indicates much higher prices for many of these markets. I'd like to clarify that many of the reasons that have led to this huge expansion across all markets since March 2020, aren't what most people think they are. Passive investing, excessive speculation/gambling since lockdowns, evolution of technology, Fed narratives & low rates, eviction moratoriums - postponing debt repayments, supply constraints & underinvestment in key material/commodities which are coming out of a brutal bear market... are all way more important to me than what the Fed or Central banks are doing. First of all QE isn't money printing and the Fed doesn't create money. The treasury has created that in combination with the Fed, but it hasn't been as much as people think it is given how big the issues are globally, especially with banks not creating new loans. And the funny thing is that over the last few months banks are using the reverse repo facility indicating strong demand for safe and liquid instruments which is 1. Indicating QE isn't really working 2. Something isn't right in the markets. So are all the above stronger than the deflationary/disinflationary pressures? So far they have been and the truth is that the situation could remain the same for years. Actually I can easily see higher prices for 1-2 years, especially on Oil and Copper. These are the two commodities that will have steady or increasing demand despite all the environmental concerns. In reality its the environmental concerns that are the exact reasons why I am bullish on these two. Why? After a decade of underinvestment there won't be enough production to keep up with the demand. Even if demand goes down, if supply goes down even more that could create a very strong imbalance that could send oil much higher. For copper I can see an even more bullish case because it is actually needed in the ESG movement. Of course government spending also playing a role into this, but this doesn't mean we will get 1970s style of inflation. Now let's get into the charts. As you can see on the main chart of this idea (USOIL), you can see how bullish oil is. I don't believe this high will hold and it has actually found perfect support at the 64-66$ range. No idea how long it takes to break out, but I doubt the 77$ resistance will hold for much longer. Above 77$, 90$ will come easily in my opinion and later even higher prices with 100$/barrel not being out of question. OPEC announced that it would allow some production to come back, but no idea how much and how fast could it come back. Gasoline seems to be leading the way here and prices could go even higher, meaning oil will probably follow. Clearly after 1.5 year in this pandemic people have saved money and want to travel, so the pend up demand is playing a role (at least in the short term). When Copper reclaims the first red zone, it means it has reclaimed its 2011 ATH. That would be pretty bullish in my opinion and a very valuable signal overall. Copper is already showing a lot of strength after a significant pullback and consolidation and that could be the confirmation for more upside. Bonds even after such a rally, along with the USD haven't been able to do much damage. Bonds found resistance when retesting some key lows from below and they seem pretty weak at the moment. The DXY found resistance at its March top and is looking a lot weaker. Actually it has fully broken down. That makes me think this USD rally was potentially a bet on tapering (buy the rumor, sell the news) and the drop is normal as negative real yields in the US are getting very deep. One thing that might be playing a role on this dip for Bonds & USD is the announcement of some the new Repo facilities outside the US for foreigner Dealers and Central banks, with the potential to expand to others too in order to avoid stresses in the markets. Part of the drop in the USD might be attributed to this because many who are expecting the dollar shortage to get worse might be closing positions. So in the short term at least we might see bonds & the USD pullback, but this doesn't they will go much lower. For now most markets seem to be range bound and we are essentially waiting for some clarity as to which direction they will take next. Although we are waiting for some direction, such negative real rates are beneficial to several markets, and Gold could be one of them. Gold hasn't performed very well recently and technically it is neither bullish nor bearish, however if the current negative real rates persist I think gold could do well. Like with Copper, a reclaim of the 2011 ATH (1920$) would be very bullish for Gold. It's interesting how many markets are below some key highs and just chopping below, which could lead into a bullish expansion. Just to be clear again, the ones that look the best are Copper and Oil, while Gold and Silver aren't. The real shortages and real demand is more likely to come on the first two than the latter. Finally, overall stocks don't look bearish. They really don't. There are some bearish scenarios and I do think we might get a strong dip at some point soon, but before the dip we might get a 5% increase and then go lower.
TVC:USOILLong
by BitcoinMacro
1
Bonds - An Assured Negative Negative Return As M2 plateaued during 2006 / 2007 / 2008 - we saw an aggressive deflationary collapse. A far more insidious Deflationary Event is approaching. The absence of Collateral, A shortage of T-Bills, M1+M2's sudden reduction in May, Geo-Political Risks (Extreme), Budgetary Crisis, Stimulus Bill(s) Passage Risk, the End of the Moratorium on Mortgages, Rents, Subsidies - Jobless claims rising, Wages rising and many more crosscurrents creating an undertow the Federal Reserve suggests are "Transitory" with respect to "Inflation" with ZERO discussion of Health of their "System." None. Very ominous warnings appear and are ignored in this unusual environment. Protection is bought every day, even though the VIX is trading a Large Daily Sell, Intra-day there are clear signs there is a group whom is very concerned.
CBOT:ZB1!Short
by HK_L61
Mas But I Never Know Just Like You! 👍So what fun in the wonderful world🌎 of Bitcoin ETH and your favorite Alt... I highlighted this region because I find it a note worthy zone for many to remember. Many on one side of the fence vary few on the other, but much wow! Many now are "I told you so's" or no FUD allowed let me keep pounding this rock it feels sooo good when I stop. Point is the chop is the chop but if your chopping a tree with the intention to harvest well chopping brings the tree down... 🪓🌳 I haven't posted much my previous post speak for themselves and current sentiment. 🤷‍♂️ Never wrong to plant a trees though! 😉 What are your thoughts? Is it bad that people like to realize gains and say "Cool! More Dollars now!" Most will answer with an emphatic "YES!!!" LOL Or am I really the only person that's down to pull profit and even short a little??? LOL No Advice to give just thoughts that I can't shake after the last 6 years in the world of "CRYPTO" Things 🤷‍♂️ #Fixed IDK Protect Your Neck! 🙏FOR JUST A HEALTHLY PULLBACK! ""KEEP CALM AND MANAGE THY RISK!""
INDEX:BTCUSDShort
by BradySWilliams
2
OHM Targets and Short DD Well OHM is in the news because Mark Cuban has decided to stake a decent chunk. I think this one holds promise based on the fundamentals, especially during a possible correction or bearish continuation in the crypto markets. Why? It's basically poised to become the DAI version of the Federal Reserve. Also we can see some strong support at each correction point suggesting we might even test the 4 figure ATH if sentiment around crypto changes or even just as people are in search of yield which the project certainly boasts a great track record so far with. So why should you buy? Discount potentially down to 489 if support holds. Automatic compounding staking system saves your ETH. Bonding system can give you a discount as the price rises from local lows. Obvious enthusiasm with big FOMO candles. Limited supply becoming increasingly staked due to promising yield should push through resistance consistently. This is not an asset you should trade, it's one you should stake to weather the crypto sentiment storm. Near term targets and accumulation zone in chart, exercise caution below local support. This is not financial advice, only invest what you can afford to lose.
OLong
by Subterfugex
1
MARKET ALPHA WATCHLIST - TLTSymbol: NASDAQ:TLT Indicators Laguerre RSI 2 x Multi-Time Frame EMA Comments: The FED has been pumping a substantial amount of liquidity in the US economy via creation of and then purchasing of bonds. The problem became more complicated as Michael Burry revealed his massive short position against the bond market. Michael Burry was not the only one shorting the bonds. The decline of the dollar was a clear indication that the Fed efforts would lead to further decline in bond prices. The bonds look to be unraveling as the word "taper" has been a focal point of the fed and they are actively having meetings about having meetings... so that is definitely promising.
NASDAQ:TLTLong
by jakelikesstocks
2
10Yr - A Very Clear Capital Return PanicSince January there has been a stealth accumulation out the Curve. In March it began to quietly accelerate. While Algo's drove ZN into the 131s, buyers were gobbling up each and every drive lower, building an outsized position which saw Volume peak in May from May 2nd to May 31st. Dark Pools began their acceleration in March. There is a clear trend deeply concerned with an "Event" - one which saw Volumes begin to accelerate June 16th. Volatility in Bonds should begin to pick up dramatically. Extreme Caution is warranted for Equity Complex, in particular Technology and Regional Banking. The VIX Curve, specifically SEP/OCT spread should be closely watched. We are seeing clear signs of Backwardation that could quickly invert.
CBOT:ZN1!
by HK_L61
5 Year T-Note Futures Heading Lower Towards 123Disclaimer The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. At the time publishing, I have a position in 5-Year T-Note Futures (ZF1!) . Trend Analysis The main view of this trade idea is on the 2-Hour chart. zf1! has been channeling lower after making a high of 124’08 on July 8th. First low was observed on July 13th around the 123’18”5 price level and a lower high is seen around 124 on July 15th. ZF1! Is expected to make a lower low at 123’14”5 in the short term. Technical Indicators ZF1! is currently below its short (25-SMA), medium (75-SMA) and fractal moving averages and its RSI is trading below 50. Moreover, the KST recently had a negative crossover. Recommendation The recommendation will be to go short at market. At the time of publishing ZF1!is trading around 123’25”2. The medium-term target price is observed around the 123’14”5 price level. A stop loss is set at 124. This produces a risk reward ratio of 1.54.
CBOT:ZF1!Short
by Ceddy86
Black Swan - Transitory InflationIdea for Macro: - I present to you a counterargument for the media blaring inflation narrative. - Speculate that the interest rate hikes (Jackson Hole, etc.) are just red herrings. In fact rates may go negative. - The real shocker is that everybody is positioned for inflation when inflation is at its peak and is indeed transitory. The reflation trade was debt driven and is supported by nothing but hot air. “Inflation - A continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services” - Merriam-Webster Actually global credit impulse is rolling off. - There are 3 types of inflation that are relevant: Monetary, Consumer Price, Asset. (Lyn Alden, www.lynalden.com) Monetary Inflation: "In highly indebted economies, additional debt triggers the law of diminishing returns. This fact is confirmed when the marginal revenue product of debt (MRP) falls, where MRP is the amount of GDP created by an additional dollar of debt. In microeconomics, when debt is already at extreme levels, a further increase in debt leads to an increase in the risk premium on which a borrower will default suggesting that the bank or other lender will not be repaid. As the risk premium rises, banks are often unable to price this additional cost through to their private sector borrowers thus the loan to deposit ratio of the banks falls. Combining both the falling MRP with a declining loan to deposit (LD) ratio, results in a reduction in the velocity of money. In terms of the impact on monetary activities, a drop in the LD ratio means that more of bank deposits are being directed to the purchase of Federal, Agency and state and local securities in lieu of private sector loans. The macroeconomic result is that funds are shifted to sectors that are the least productive engines of economic growth and away from the high multiplier ones." - Too Much Debt, Hoisington Investment Management Co. - Yes, you have M2 skyrocketing, but compare it with Debt and adjust for inflation. Wow, It did nothing to debt levels. GDP adjusted for inflation barely recovered: - M2 doesn't exist in a vacuum, but needs to be balanced for deflationary forces. Debt is winning. - Yes, you have consumer price inflation and asset price inflation, but these are largely driven by speculative bubbles. They are not driven by fundamental factors nor underlying conditions. They will regress to the mean by Reflexivity. - Yes, there are supply chain issues due to COVID + political tensions, but how long will it last? Are the political tensions even necessary? What happened to lumber even with supply chain issues? - What is even the reason for continued asset purchases by CBs? IMO, asset purchase tapering is done to engineer a crash in the speculative asset bubbles, so that more extreme monetary policies can be enacted to try to stop the tidal wave of debt. Once the speculative asset bubble collapses, consumer price inflation will be controlled as well. In fact there will be a dollar shortage, as each dollar is leveraged 50x+ vs. debt. - CBs don't care about speculative asset inflation okay? Not a big deal. Bubbles even pop by themselves. Price of Big Mac and used car goes up a little bit, boohoo. - Evidence to support my thesis is falling inflation expectations. Inflation expectations are what drives asset prices up. If inflation is expected to decrease, then the prices of assets are expected to decrease. Why would anyone hold an asset expected to depreciate in price? Signals of falling inflation expectations: Inflationary yields: Inflationary currency pairs: FRED inflation expectation rate: fred.stlouisfed.org Gold - you might see something crazy happen here. This can be the end of a distribution pattern: Inflationary Commodities: - The stock market is one of the last markets to receive liquidity trickling down from the source. Currencies, bonds, commodities lead them and stocks should not be used as an indicator for future inflation expectations over them. - Right now, the world is positioned for inflation and are looking for interest rate hikes as the signal, but that won't be catalyst. - Inflation and liquidity flows have been cut off at the source, and now we are at the cliff of the debt driven sugar rush. There must be great suffering in order to justify more extreme monetary policies. Then and only then will you have sticky inflation in a stagflationary environment. "Inflation is transitory" - Jerome Powell GLHF - DPT P.S. Disclaimer - I am relentlessly selling risk assets, long volatility and bonds.
FRED:WM2NS
by UnknownUnicorn1043646
2
10Yr Note - When the Levy BreaksThe important Context of "Pristine Collateral" as we have addressed repeatedly is the Salient Issue - The Return of Capital. The availability of T-Bills remains in an extremely short supply. The Federal Reserve - $230 Billion at last disclosure. The United States Treasury - $0. T-Bill terms of 4, 8, 13, 26, and 52 weeks for issuance have seen the highest percentage of issuance @ present — 91-day, 182-day and 364-day. UST's schedule: www.treasury.gov UST Direct, place your offer - www.treasurydirect.gov * Please let us know how you fared, we did not. Powell, by nature - points the finger and blame @ Sec. Of Treasury - Janet Yellen. Yellen is suppressing "Pristine Collateral" according to Jerome Powell. Is She though... If Banks are not lending... They need to be paid to hold the abundance of CASH. But, wait a minute... Money Center Banks / Primary Broker Dealers do not want CASH. They prefer you place your CASH in Money Market Funds. Say what, Banks don't want CASH? Yes, it is serious LIABILITY on their balance sheets at this point in time as their balance sheets are DEBT Laden. WTF Mate, what are you talkin bout? J.Dude, seriously - you are delusional... This is simply a series compounding errors by ALGOs trading in the Treasury market. IF you believe this - please consider the following: We pointed out this is or LTCM / Lehman moment on an exponential Scale more than a few times. So let's clear the decks with respect as to why Mate. When the lowest yielding Treasury is in Demand - exponential Demand. WE have a problem, one in which everyone loses a Hand. Credit simply gives way to Crisis - Crisis is all that results. And we are all seeing this presently - Inflation is at the highest rate in REAL TERMS while Yields on the Treasury Curve in Real Terms are at the Lowest on Record. Convergence, it a nasty Bitch.
TVC:US10YShort
by HK_L61
1