Not much comment necessary on a topic we have beaten to horse pulp in the past 2 weeks aside to note that this time is ironically different from 2011 as the inversion in the CDS curve is considerably more biased to a piling up of short-term default risk than in 2011.
[5]
[Sure enough as we warned last night [6], we are seeing the longest-dated "Cheapest to deliver" Treasuries well bid as tradesr prepare for a potential CDS trigger in sovereigns - watch the 2.75s of Aug 2042 and the 2.75s of Nov 2042]
T-Bill rates exponentially rising (10/17 +20bps at 48bps!!) - no worries... Fidelity selling all its short-term Treasuries [7] - not a problem... Repo markets starting to panic [8] - have no fear... CDS markets signaling extreme short-term default concerns - baah humbug.... We have a solution for that - Janet Yellen's "buyback" plan. [9]