10s Turn Special Repo
Because nothing says "perfectly functioning, centrally-planned bond market" like the most liquid OTR treasury security of the world's biggest bond market trading special repo. From SMRA: "The overnight General Collateral rate edged up to 30 basis points this morning. The 10-year note turned special and was trading at -5 basis points compared to 7 basis points yesterday." Yes. Yes it did. And if you think this is bad, just wait until Ben announces QE4 on December 12 and commences to monetize everything east of the 7 year unsterilized: finding any bond non-special will be a truly amazing feat as the Fed proceeds to take over the entire bond market.
And yes, the paradox here is that in a world away with liquidity suddenly there is none and potentially may explain why there is suddenly a big reliquification, i.e., selling, via gold.
Via: Stone McCarthy