Sold pre-market TECS as high as $16.00 and SOXS as high as $12.20. Reduced leverage short portfolio position from 15% to 12%. Added to EMD in small amounts as EM bonds sell off due to US higher yields. EMD yield approaching 11%.
This post was edited 1 minute after it was posted.
correct on interest rates. Sp500 ended the year at 3839 And now a year later we are at 4330 In this business, that looks like dead-on accuracy.
GOLDMAN cuts $SPX target again “The expected path of interest rates is now higher than we previously assumed.” Now models “a P/E of 15x (vs. prior forecast of 18x) and implies a year-end (3-month) S&P 500 target of 3600 (-5%) .. and 12-month forecasts of .. 4000 (+6%).” [Kostin]
Nah. The problem here is an economy running too hot, not collapsing.
Peter Schiff @PeterSchiff The yields on a 5-year U.S. Treasury is now 3.94%, the highest since Nov. of 2007. 5.25% will be the highest in 22 years. The low interest rate environment that has propped up an overly-indebted U.S. economy is crumbling. Soon the entire house of cards built on top will collapse. 11:09 AM · Sep 22, 2022
The strange part of this panic is that inflation data keep getting better....but bonds are going the other way - they are suggesting higher inflation.
Weird. Maybe the bond market is more saying 'the post-pandemic inflation surge is over, sure, but an economy growing at 3-5% demands interest rates in that zone. because of traditional inflation pressures from high econ activity plus it looks like the anti-trade views of the US are inflationary. That last suggests a change - that the deflationary pressure from China and other nations...is over and the 'make it in the USA' plan will increase prices for a longer time.
Or the bond market is starting to see increasing inflation in 2024.
But core CPI and PCE are running at just 3%. Which is fine for capitalism...not a problem.
“With newly issued US Treasuries now up at 4.5% for 30 years, 2% handle corporate bonds are trading in the 60s, the mark to market losses on bonds issued 2019-2021 are in the trillions $$$ across CMBS, MBS, Corporate debt and yes, Treasuries.”
The schools of thought around stock market bottoms are interesting...many think that because human psych is predictable...bottoms all look alike. The last big panic shakes out the final weak hands in one convulsion. That's what this poster was talking about. He was wrong. When he wrote this the market had just a percent or two more to fall before a big rally.
Macro Charts @MacroCharts The bottom won't come while hopeful investors crowd around an indicator (most record Put spikes led to big losses). Big bottoms in Bear Markets (June for example) are far more disorderly, emotional. Ran a new historical analysis: Now vs prior Big bottoms. We're not even close. 12:18 PM · Sep 25, 2022
Here's more of the Austrian 'we must destroy this village to save it' talk that we hear from so many people. Destroy the economy so it can regrow in a way they see as more correct. This is the Igy view. Good example, from the lows a year ago. These people *want* financial destruction...it's not great. But yeah human nature.
Santelli nails it here. The one guy on CNBC who really isn’t afraid to call out what is actually happening.
“With newly issued US Treasuries now up at 4.5% for 30 years, 2% handle corporate bonds are trading in the 60s, the mark to market losses on bonds issued 2019-2021 are in the trillions $ across CMBS, MBS, Corporate debt and yes, Treasuries.”
—Lawrence McDonald
All these Banks holding T-bills paying less than 2% are in trouble.
“With newly issued US Treasuries now up at 4.5% for 30 years, 2% handle corporate bonds are trading in the 60s, the mark to market losses on bonds issued 2019-2021 are in the trillions $ across CMBS, MBS, Corporate debt and yes, Treasuries.”
—Lawrence McDonald
All these Banks holding T-bills paying less than 2% are in trouble.
Currently, there are no T-Bills yielding less than 2%, or 3% when issued.
All these Banks holding T-bills paying less than 2% are in trouble.
Currently, there are no T-Bills yielding less than 2%, or 3% when issued.
No kidding.
But the banks loaded up on T-bills paying less than 2% a few years ago and are stuck with them now that rates are way up and so the bonds they hold are next to worthless.
That's what happened to Silicon Valley Bank, Silvergate Bank, and Signature Bank 1/2 a year ago.
Silicon Valley Bank (SVB) failed when a bank run was triggered after it sold its Treasury bond portfolio at a large loss, causing depositor concerns about the bank's liquidity. The bonds had lost significant value as market interest rates rose after the bank had shifted its portfolio to longer-maturity bonds.
This post was edited 56 seconds after it was posted.
Currently, there are no T-Bills yielding less than 2%, or 3% when issued.
No kidding.
But the banks loaded up on T-bills paying less than 2% a few years ago and are stuck with them now that rates are way up and so the bonds they hold are next to worthless.
That's what happened to Silicon Valley Bank, Silvergate Bank, and Signature Bank 1/2 a year ago.
Silicon Valley Bank (SVB) failed when a bank run was triggered after it sold its Treasury bond portfolio at a large loss, causing depositor concerns about the bank's liquidity. The bonds had lost significant value as market interest rates rose after the bank had shifted its portfolio to longer-maturity bonds.
You need to learn the difference between; Treasury Bills, Treasury Notes and Treasury Bonds.
But the banks loaded up on T-bills paying less than 2% a few years ago and are stuck with them now that rates are way up and so the bonds they hold are next to worthless.
That's what happened to Silicon Valley Bank, Silvergate Bank, and Signature Bank 1/2 a year ago.
Silicon Valley Bank (SVB) failed when a bank run was triggered after it sold its Treasury bond portfolio at a large loss, causing depositor concerns about the bank's liquidity. The bonds had lost significant value as market interest rates rose after the bank had shifted its portfolio to longer-maturity bonds.
You need to learn the difference between; Treasury Bills, Treasury Notes and Treasury Bonds.
Do you not understand that American banks loaded up on low interest, long term T-bills a few years ago and that with the rapid and significant increase in what T-bills being issued recently are paying in interest, those old T-bills have depreciated significantly?