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2s10s Steepening Further As Bond Investors Wake Up To Trillions In New Supply
A hundred billion this week, over a trillion next year, and it starts to add up. It appears that what has been phenomenal strength in the UST market for many months now, undoubtedly with the fervent support of the Federal Reserve, seems to be abating. Over the past week the 2s10s charts has moved stepper by about 15 points, proving that Julian Robertson's steepener trade and its Constant Maturity Swap derivatives will likely end up being quite a profitable position. With a record onslaught of new issuance this week alone, and the expiration of POMO activities on Thursday, the supply side of the equation may finally be catching up bond traders.
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So then what happens? Demand for USTs declines sending interest rates up.
What happens to precious metals prices?
There is no demand or supply. It's all excess liquidity or lack of liquidity.
haha, ok Krugman !
What happened to ING???
seriously wtf AMZN?
who got caught so offside that they are forced to buy it up here?
I made a few bucks on that one. I did a straddle on earnings and it exploded upward. I rolled some into out of the money calls and watched then go in the money. Rinse repeat. Keeping profits on the sideline.
The only thing I can figure , every fund is trying to get it on it's books along with some shorts who refuse to believe the thing can go higher.
I thought I'd try soemthing new: Abandon all common sense and and go with the great fool theory. You'll see it on every funds portfolio soon. I 'd say tomorrow should be it's last day, but then again, that's common sense talking. Goldman hasn't had it's final say in the matter either. Just Think Bezos owns 95 M shares of that thing. He just had 3 Billion added to his net worth in the last few days.
Answer: Momo traders that thrill on nosebleed inducing rarefied air. They have to be on Crack to pack an 82.16 P/E item in their portfolio. C'est La Vie.
Do they squeeze the shorts to high heaven, then sell the shares in the dark pools back to the FEd???
There has to be volume to ramp these up. Who will they sell to?
i honestly do not believe pomo is ending....it
might "end" for a few days maybe as long as a
few weeks but it will be baaaack....
Isn't this good news?
Sometime by the early part of 2010 the Economy will be strong enough [whatever that means] so that the FED will have to start doing their usual cyclical thing?
If you told me the odds were 50/50 this is where a rational person would price 2/10's todays??
I call bullshit. The PDs are raising cash ahead of the bond auctions. Everything is down. The markets are FUBAR and fundamentally indicative of nothing.
Can brain-dead people wake up? I wonder...
The market does not believe Geithner's lies about dramatically lowering the deficit.
My Bear chant nomo pomo . nomo pomo . nomo pomo . nomo pomo . nomo pomo . nomo pomo . nomo pomo . nomo pomo.
What happens Friday Oct 30 ... Haloween Eve ... the Gouls are getting ready.
I thought they could drive the price trading the same finite pool of shares between their various appendages,@ a thousand cycles per second