Treasury supply has surged to $400 billion in new debt in a single month, and the Treasury has announced it will AT LEAST DOUBLE its coupon buyback operations as Treasury yields threaten to break out while bond prices would concurrently crash. The buyback scheme is a panic signal that fails to account for the fact that it xxxxxxxxx xxxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxxx beyond the insane xxxxxx xxxxxxxx xxxxxxxxxx must already bear.
Repo issuance has stalled or turned down even as leveraged fund shorting resumed, a divergence from the pattern of the past three years. Foreign private demand for Treasury notes and bonds has fallen sharply year over year even as foreign buying of US equities has risen. Stock valuations, money supply growth, and the ratio of stocks to deposits are all at or near record extensions.
Hedge funds are rebuilding short positions in 10-year Treasuries, but the usual repo financing that would normally accompany a basis trade buildup has stalled, suggesting the shorts are xxxxxxxxxx xxxxxxxxx xxxxxxxxxxx xxxxxxxxxx xxxxxxxxx.
Crash risk, previously seen as present but not imminent, is xxx xxxxxxx xxxxxxx, with a xxxxxxxx xxxxxx xxxxxxxx xxxxxxxx the biggest proximate risk.
Liquidity is context. Technical analysis provides action signals, given the context. Be prepared to act on xxxxxxxx xxxxxxxx technical signals or xxxxxx xxxx. This is no joke.
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