10y UST yields are collapsing. Why. According to financial media - nothing. "Things look gloomy." "Upside on economic rebound priced in." "Supply/demand for USTs" (that last one is technically correct, but is so incredibly basic/generic that it can be categorized under the same → you people have no idea why, and you're just talking for the sake of talking.)
So here is a stupid explanation. Or maybe not so stupid. Maybe pure coincidence. Maybe not. Maybe grey areas. Who knows, I certainly don't. But you will never see anyone in financial media a) ever connect these dots, or b) ever dare put such a thought out there.
I'm doing just that - putting something I'm observing out there. Could be nothing, could be everything. At least its SOMEthing concrete to answer: WHY are USTs bid, and WHY NOW. And no, people didn't just suddenly flood into USTs on something generic like COVID resurgence or something economic - why did they crush yields to sub 1.3% today in such a rush. Did the delta variant show up at US cash open for the first time??
In Jan, institutions (hedge funds especially) were completely caught off guard on the meme rally - and they were scared. The final week of Jan '21, GME shares and the VIX moved in tandem (chart it out), and there was also demand for the safety of USTs.
Since then, HFs have now gotten involved in trying to trade meme stocks. This time last month, AMC options traded over a trillion dollars notional value in a week. Retail might have firepower, but a trillion in turnover in a week on AMC vol? Yeah, there are hedge funds in there too.
Now we're seeing AMC collapse - and collapsing right in line with USTs getting bid. Risk → safety.
Stupid observation? Sure, can criticize away. At least its something concrete to put out there.
-Weston
So here is a stupid explanation. Or maybe not so stupid. Maybe pure coincidence. Maybe not. Maybe grey areas. Who knows, I certainly don't. But you will never see anyone in financial media a) ever connect these dots, or b) ever dare put such a thought out there.
I'm doing just that - putting something I'm observing out there. Could be nothing, could be everything. At least its SOMEthing concrete to answer: WHY are USTs bid, and WHY NOW. And no, people didn't just suddenly flood into USTs on something generic like COVID resurgence or something economic - why did they crush yields to sub 1.3% today in such a rush. Did the delta variant show up at US cash open for the first time??
In Jan, institutions (hedge funds especially) were completely caught off guard on the meme rally - and they were scared. The final week of Jan '21, GME shares and the VIX moved in tandem (chart it out), and there was also demand for the safety of USTs.
Since then, HFs have now gotten involved in trying to trade meme stocks. This time last month, AMC options traded over a trillion dollars notional value in a week. Retail might have firepower, but a trillion in turnover in a week on AMC vol? Yeah, there are hedge funds in there too.
Now we're seeing AMC collapse - and collapsing right in line with USTs getting bid. Risk → safety.
Stupid observation? Sure, can criticize away. At least its something concrete to put out there.
-Weston