Rates are crashing and fuel to the moon!

I’ll bring the beer if you can promise Nancy or any of her friends arnt going to be a ring girls.

 

I’ll bring the beer if we can all agree to sit quietly and just drink beer Hank hill style

 

Big money moving into bonds means they are looking for security right ? Probably not a good sign if thats the case...

 

Hopefully some of those people will be banned from trading soon. They obviously trade with insider info

 

After the initial “hello” “how you doin” is there any other way?

 

not a crazy bad sign, but yeah it just means they’re moving to a less volatile position. Bonds up, stocks down. Also the fed is trimming 90billion a month out of the market starting this month. SP500 has dropped over 6% since Tuesday.

 

Trading off indicators seems really fascinating. How often does the TTM squeeze indicator give you false signals?

 

A different way to look at bonds is through something called the yield curve. In normal times, the longer you loan someone money the more they pay for interest because with time comes risk. So in normal times, the yield on short dated bonds should be lower than the yield on long dated bonds. Right now that entire conept is FUBAR.



Now there's all types of reasons why this curve is out of whack but at the most basic level these guys are saying they expect fireworks within the next year (because the 1 year treasury bill (bonds have different names based on term length such as notes, bills, bonds) is the highest yielding security). Depending how this resolves over the next year will show people's thoughts about the future. The two most obvious options for conclusions are 1. the front end of the curve comes back down and settles lower than the back end (i think this is called a bull steepening) or 2. the back end of the curve rises and settles above the front end of the curve (i think this is called bear steepening).

Either way, something's gotta happen. Should be fun.

 

It's a confusing time for me because on one hand bonds have almost zero volatility(sovereign default risk is still possible i.e. ending the gold standard) when held to maturity but for those that trade in fixed income (bonds) you may find it surprising that as an asset class it has actually been trending more volatile than equities. The VIX index measures the volatility of the S&P500 and the MOVE index measures the volatility in treasury yields. Check out this chart

 

You know you're wrong for that one, haha