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One Bank, One Intervention, is One Thing


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25 minutes ago, DrStool said:

Primary Dealers, by virtue of their special status aren't just first in line to buy Treasuries, they are in fact to take down what the rest of the market does not absorb. They are REQUIRED to bid at every auction. So they are forced to buy shit with extreme leverage that is constantly falling in price. 

This is the crux of the problem and why I have been so hysterically bearish, particularly on the bond market. 

Or as the French would say, when the bond market rallies,  the chat mort rebond market. Yes that is the French for "dead cat bounce." 

The only thing the dealers can to is to hedge with futures. Not only haven't they done enough, they went the wrong way again in August-September. 

Markets Face Catastrophe as Dealers Mitigate Too Little Too Late

 

 

I didn‘t know that they are forced to buy. That explains a lot. Thank you.

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45 minutes ago, DrStool said:

Primary Dealers, by virtue of their special status aren't just first in line to buy Treasuries, they are in fact to take down what the rest of the market does not absorb. They are REQUIRED to bid at every auction. So they are forced to buy shit with extreme leverage that is constantly falling in price. 

This is the crux of the problem and why I have been so hysterically bearish, particularly on the bond market. 

Or as the French would say, when the bond market rallies,  the chat mort rebond market. Yes that is the French for "dead cat bounce." 

The only thing the dealers can to is to hedge with futures. Not only haven't they done enough, they went the wrong way again in August-September. 

Markets Face Catastrophe as Dealers Mitigate Too Little Too Late

 

 

The new Bear's pickup line when meeting others at a french cafe... Just need to say it in french with an  authentic accent.

the chat mort rebond market

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11 hours ago, fxfox said:

VIX, TLT, HYG didn‘t make new lows yet

Good afternoon fxfox...

I'd personally prefer they don't.

I didn't call our current support just above 3600 the battle of the dopamine(liquidity) dripsters for nothing. 

The whole world is addicted to the sweet nectar(of free money).

England's intervention was the first response as even a notion was made for intention to cross 3600. 

I believe the cry will only be louder if you attempt to do it again.  As far as I can tell, there are brush fires everywhere.

I'll say it again.  As far as I'm concerned....3600 is the line in the sand.

3500 will yield the same decline possibility(MAGNET), BUT in the "business as usual" format.

Does our current economic situation yield feelings of..."business as usual" to you?

As I'm sitting here...I'm personally hoping this is a retest and rejection.  I can see the alternative quite clear from my vantage point...and I don't really want to go down that road.

For me...it's never the destination that concerns me...It's how you get to that destination. 

That's where my interest lies. 

Best,

TCG

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19 minutes ago, The CoinGuy said:

Good afternoon fxfox...

I'd personally prefer they don't.

I didn't call our current support just above 3600 the battle of the dopamine(liquidity) dripsters for nothing. 

The whole world is addicted to the nectar...of free money.

England's intervention was the first response as even a notion was made for intention to cross 3600. 

I believe the cry will only be louder if you attempt to do it again.  As far as I can tell, there are brush fires everywhere.

I'll say it again.  As far as I'm concerned....3600 is the line in the sand.

3500 will yield the same decline possibility(MAGNET), BUT in the "business as usual" format.

Does our current economic situation yield feelings of..."business as usual" to you?

As I'm sitting here...I'm personally hoping this is a retest and rejection.  I can see the alternative quite clear from my vantage point...and I don't really want to go down that road.

Best,

TCG

The „alternative“ is a concerted global CB‘s intervention

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1 hour ago, fxfox said:

I didn‘t know that they are forced to buy. That explains a lot. Thank you.

Not forced. Required as part of their special status. Normally it always works in their favor. This wasn't in the playbook. Used to be in the old days that they would short against the upcoming auctions. Until 2009, they were always net short. Of course, that was wrong in 2007-08, which is why they went bust and collapsed the financial system. Today is a mirror image of that. They were record net long at the bond market price top in July 2020. And they've never gotten net short. Not even for a day. Positioned wrong all the way. They made money on stocks to cover for it. But now that game is done too. 

Markets Face Catastrophe as Dealers Mitigate Too Little Too Late

 

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9 minutes ago, fxfox said:

Reninds me of back then stoolie Mark chain posting pics of houses in a dying housing market in 2008/09 

Warehouses, as I recall. Chain posting while chain smoking... something. 

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21 minutes ago, DrStool said:

Not forced. Required as part of their special status. Normally it always works in their favor. This wasn't in the playbook. Used to be in the old days that they would short against the upcoming auctions. Until 2009, they were always net short. Of course, that was wrong in 2007-08, which is why they went bust and collapsed the financial system. Today is a mirror image of that. They were record net long at the bond market price top in July 2020. And they've never gotten net short. Not even for a day. Positioned wrong all the way. They made money on stocks to cover for it. But now that game is done too. 

Markets Face Catastrophe as Dealers Mitigate Too Little Too Late

 

That‘s frightening. So they play moral hazard again and get bailed out AGAIN.

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