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Message
Look at bonds
Posted on 4/7/25 at 3:58 pm
Posted on 4/7/25 at 3:58 pm
They will tell you we're not crashing. Bond traders are the smartest traders in the world. If this were 1987, you'd see them go parabolic. Instead they're getting sold into the ground the past 2 days.
This post was edited on 4/7/25 at 4:00 pm
11
Posted on 4/7/25 at 4:26 pm to The Scofflaw
Can you explain this like I have no idea what any of that means?
Posted on 4/7/25 at 4:33 pm to The Scofflaw
VIX over 40, Bonds sell off.
This morning, the 10yr yield actually went up bigly.
Last week, it was dropping with market.
Seems like everything sold off today, including those bonds, gold, so where's all that cash? Ready to go back into market is what OP is hinting at.
(Or massive deleveraging before someone blows up)
This morning, the 10yr yield actually went up bigly.
Last week, it was dropping with market.
Seems like everything sold off today, including those bonds, gold, so where's all that cash? Ready to go back into market is what OP is hinting at.
(Or massive deleveraging before someone blows up)
This post was edited on 4/7/25 at 6:09 pm
Posted on 4/7/25 at 5:15 pm to Pendulum
Isn’t that bc China sold $80B worth of treasuries today?
Posted on 4/7/25 at 5:18 pm to The Scofflaw
quote:In general, it's the best barometer of what's actually going on, yes.
Look at bonds
quote:10 year up 17bps today - likely one of the biggest moves in a long time. No bueno.
They will tell you we're not crashing. Bond traders are the smartest traders in the world. If this were 1987, you'd see them go parabolic. Instead they're getting sold into the ground the past 2 days.
Corporate credit has sold off a bit too
Mortgage credit, pretty stable.
Posted on 4/7/25 at 5:20 pm to Huey Lewis
quote:Equity (stocks) is an inherently volatile instrument. It's value can fluctuate wildly even if the company is at core basically safe (e.g. imagine a situation where a company is breaking even or making a small profit - easily paying it's bills but not much left for its shareholders). When credit (bonds) start selling off, then the market is "saying" bankruptcy and solvency and the like are in question, so it's much more worrisome.
Can you explain this like I have no idea what any of that means?
So far, the credit markets have mostly held.
Posted on 4/7/25 at 5:49 pm to Big Scrub TX
BBB spreads are a whopping 1.5% 
Although bankruptcies are rising
Although bankruptcies are rising
Posted on 4/7/25 at 6:32 pm to The Scofflaw
quote:I came to a different conclusion. Bond traders didn’t pull the 10 year up 28 bps. There is another major country or countries dumping our bonds to inflict as much pain as possible.
They will tell you we're not crashing.
Posted on 4/7/25 at 6:54 pm to Huey Lewis
quote:
Can you explain this…
One of its indicators is risk sentiment:
•In times of uncertainty (like financial crises or geopolitical instability), investors buy Treasuries for safety, pushing yields down.
•When confidence is high, they may sell Treasuries for riskier assets like stocks, pushing yields up.
What happened today? The 10-year Treasury yield increased.
Boiled down: no need to jump off of a bridge
This post was edited on 4/7/25 at 6:56 pm
Posted on 4/7/25 at 7:02 pm to beaverfever
quote:
I came to a different conclusion
A big dump by foreign countries drives up interest rates…negative impact to U.S. economy. Short term helps strength of USD (buying dollars). I suppose that makes their goods a little cheaper (USD buys more)?
That in turn slows demand for their imported products, above amplified impact from tariffs. Hurts U.S., yes! Hurts themselves, yes?
How much does that represent of China’s total holding of U.S. debt (10% ish)? If Y, why sell only 10%?
This post was edited on 4/7/25 at 7:27 pm
Posted on 4/7/25 at 11:51 pm to wutangfinancial
quote:That's my point. I'm not sure why my entirely accurate explanation was downvoted.
BBB spreads are a whopping 1.5%
Posted on 4/8/25 at 12:48 am to Big Scrub TX
Several possibilities:
1. Market is recognizing Trump will see the tariffs through for a while, which puts the Fed in a bind as inflation expectations become dislocated from the targeted rate. No cuts until real data comes in weeks-to-months from now. I think Powell is hesitant to bailout given the personal attacks and the precedent it would set for Fed independence. He will take and see approach on the data as an excuse.
2. Market is sniffing out a softening of language/deals around tariffs ahead of equities. Bond money is smarter and deeper than equity money, and less likely to get squeezed and liquidated.
3. Healthy retracement after a historic rally in bonds in such a short time.
4. Foreign governments dumping in size in retaliation or for other reasons (currency/export interests).
5. Who knows.
For those bond traders, I’m curious your thoughts about the yield curve and what that foretells.
1. Market is recognizing Trump will see the tariffs through for a while, which puts the Fed in a bind as inflation expectations become dislocated from the targeted rate. No cuts until real data comes in weeks-to-months from now. I think Powell is hesitant to bailout given the personal attacks and the precedent it would set for Fed independence. He will take and see approach on the data as an excuse.
2. Market is sniffing out a softening of language/deals around tariffs ahead of equities. Bond money is smarter and deeper than equity money, and less likely to get squeezed and liquidated.
3. Healthy retracement after a historic rally in bonds in such a short time.
4. Foreign governments dumping in size in retaliation or for other reasons (currency/export interests).
5. Who knows.
For those bond traders, I’m curious your thoughts about the yield curve and what that foretells.
Posted on 4/8/25 at 5:49 am to The Scofflaw
quote:
not crashing
The VIX spiked up to almost 60 yesterday and is flattening out above 40. Unrelated securities are trending towards a 1 correlation with one another. There seems to be some sort of systemic liquidity issue brewing behind the scenes. The 1-day selloff in bonds (and gold) could indicate desperation to free up liquidity. It could also be the result of large overseas holders dumping our debt, as others have posted. The least likely reason is renewed confidence in economic expansion IMO.
This post was edited on 4/8/25 at 6:04 am
Posted on 4/8/25 at 6:51 am to williejameshuft
quote:
The 1-day selloff in bonds (and gold)
Gold has sold off for a few days now. Maybe it is people liquidating their recent winners to cover margin calls.
Posted on 4/8/25 at 7:26 am to Shepherd88
quote:
Isn’t that bc China sold $80B worth of treasuries today?
China's sell off certainly propped up yields.
There might still be one, but there wasn't a huge flight to safety over the last few days, nor was their capital flight from overseas markets into US Treasuries.
The bond market signaled that it isn't buying all the doom and gloom...at least not yet. Investors are also about to pile back into equities.
When foreign markets start cratering and/or our economy (not the stock market) starts REALLY showing signs of significant distress, you'll see yields come down as investors park money in safety.
This post was edited on 4/8/25 at 7:28 am
Posted on 4/8/25 at 8:12 am to Longhorn Actual
This guy gets it. To add, China doesn't have the ability to tank the US bond market, if they tried to market sell their entire holdings at once, it would move their holdings value underwater.
Posted on 4/8/25 at 11:05 am to Shepherd88
quote:
Isn’t that bc China sold $80B worth of treasuries today?
... and US traders are wholesale dumping foreign equity holdings, mainly China
Take it from a greyhair .... as somebody who still carries scar tissue from the 2000 crisis ... this reminds me of then .
I entered a dozen equity positions yesterday, mostly well-known tickers, and benefited from the ride up earlier today ... after all, you had to know the retail investors were going to be bargain shopping and pushing up prices early..
and as soon as I had gains I placed stop loss orders beneath them. IMHO, keeping stop loss triggers really tight during volatile times like these is required. When its this frothy it could easily get spooked into dropping another 10-12% to put us looking the bear squarely in the eyes.
Good fortunes, and protect yo' gainz
This post was edited on 4/8/25 at 1:23 pm
Posted on 4/8/25 at 3:03 pm to The Scofflaw
Posted on 4/8/25 at 3:07 pm to The Scofflaw
The funniest shite today was watching all of the MAGA lunatics on twitter talking about the market ripping and making fun of the "dumb people" who were panicking. Then the market collapses and closes down 1.6%
Posted on 4/8/25 at 3:07 pm to The Scofflaw
Muni bonds yesterday (down 2.85%) had their single worst day since 1994, and were down again today.
High yield spreads out to a near-term high of 472ish.
High yield spreads out to a near-term high of 472ish.
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