COT Blue: Nobody Buys a Dead Horse

FRBNY’s December 2017 Primary Dealer survey results aren’t yet published, so we will have to wait a few days for the collection of those banks’ economists to tell us what they think their own traders likely won’t do. It’s a mess in that situation, but one as old as the crisis. Nevertheless, Economists for some…


Desperately Seeking 1995

The year 1995 wasn’t exact a good year to remember. There was the Oklahoma City bombing, the San Diego tank rampage, the New Jersey Devils winning the Stanley Cup in a lockout shortened NHL season, and some former Buffalo Bills running back named OJ getting into trouble out in LA. Steve Forbes would announce his…


Data Brand Dependence

If it is a day ending in “y” you can be sure there is somewhere in the financial press a story or “news report” of the looming bond selloff – even if it is due to some future event or made up phenomenon. Today’s is another in the series this time using a dramatized setup…


The Glut Lives Still In Imagination

While I commend the mainstream media for refraining the past few months from their orthodox tendencies to shout BOND ROUT!!! every time long Treasury yields rise for more than a few days at a time, that doesn’t mean the total absence of the ridiculous. With the long end once again trending lower in nominal yields,…

201710.25 1

Bond Kings and the Future(s)

Maybe there is hope for the media yet. The benchmark 10-year US Treasury bond yield has passed above 2.40% for the first time in several months. In the past any similar move or technical breakout of the like was met with uniform screeching about a BOND ROUT!!! This time, however, commentary appears at least to…


Not Really Wrong On Bonds

It is often said that the market for US Treasuries is the deepest and most liquid in the world. While that’s true, we have to be careful about what it is we are talking about. There is no single US Treasury market, and often differences can be striking. The most prominent example was, of course,…

201707.05 3

Chart of the Week; Marathon, Not A Sprint

After the 2013 “reflation” selloff, it took just about two years for the treasury market to revisit (10s) the 2013 lows (rates). In all that time, each and every bond selloff was met by the same assurances that “rates had nowhere to go but up” when instead the underlying fundamentals (economy as well as money/liquidity)…

201704.04 3

‘Nowhere To Go But Up’ Survives Because The Fed Refuses To Be Honest About Its Assessment of the Output Gap

The Federal Reserve under Ben Bernanke committed several unforgivable mistakes during his tumultuous tenure, but cumulatively they could be easily summarized as “they really don’t know what they are doing.” Time and again whoever followed monetary policy and the conventions built upon it were led either off a cliff or somewhere just less dramatic. Federal…