What The Fed Hath Wrought - Bonds/Stock Positioning Most Extreme Since The End Of QE1

Having recently explained how "The Fed has done everything it can to avoid surprising the market," vice-chair Stan Fischer better be right about what happens next. With all the double-edged FedSpeak and CONfidence reiteration - in the face of tsunami-like global deflationary forces only made reflexively worse by a soaring US Dollar - speculators are at extremely short bonds and short VIX (bullish stocks). The last time this happened was the end of QE1...

Aggregating across the entire Treasury future complex, speculators are the most next short since the end of QE1...

And now speculators have turned net short VIX once again...

The last time the combined levels of short bonds and short VIX were this extreme was as QE1 ended in 2010... This happened next...

Charts: Bloomberg

Comments

[Boris Alatovkrap]

In 18 Centruy, stocks and bonds is common implement of enslavery.

Plus ça change, plus ce la meme chose.

[HedgeAccordingly]

The table is set, now wait for the guests to eat. Buy vol when vol is on sale. http://bit.ly/1PUwcz0

[Rusty Shorts]

Aye Matey, Brown Sugar - 

Gold Coast slave ship bound for cotton fields
Sold in the market down in New Orleans
Scarred old slaver knows he's doin' all right
Hear him whip the women just around midnight

Brown Sugar, how come you taste so good
Brown Sugar, just like a young girl should

Drums beatin' cold, English blood runs hot
Lady of the house wonderin' when it's gonna stop
House boy knows that he's doin' all right
You should have heard him just around midnight

Brown Sugar, how come you taste so good
Brown Sugar, just like a young girl should

Brown Sugar, how come you dance so good
Brown Sugar, just like a black girl should

I bet your mama was a tent show queen, 
And all her boyfriends were sweet sixteen
I'm no school boy but I know what I like
You should have heard them just around midnight

Brown Sugar, how come you taste so good
Brown Sugar, just like a black girl should

https://www.youtube.com/watch?v=3B0Y3LUqr1Q

 - Rolling Stones

[ZDRuX]

So basically stocks went up and treasuries down.. just like most people are positioned according to this article. Where's the news?

[MD]

Exactly, what's the big deal?  Looks like a 6% short term drop in stocks.

[Francis Marx]

The should have raised rates  .1% a month, every month for the past 2 years and they wouldnt be in this mess  Everyone would know what to expect. No crazy rides in the markets.

[buzzsaw99]

what happened next was qe2. duh.

[RMolineaux]

Those speculators who are taking short positions in treasury bonds may be in for a painful surprise, at least in the short run, if substantial capital flight occurs from countries with convertible currencies.  A predictable rise in the dollar in FX markets will also contribute to an increase in the trade deficit and resulting demand for US treasury bonds.  

[Dr. Engali]

Soooooo..., BTFD. Got it.

[The best Sun]

And then rates went up.

[milking institute]

Long diapers,the shit storm is aproaching on the horizon,i can see  the first splatters on my windshield....

[CHoward]

Since...Lehman?

[swanpoint]

Fresh lows for gold & silver tonight.