Tag Archives: Us Treasury Bonds

NFTRH 380 Out Now

By Biiwii

nftrh 380We have been on the bounce scenario and speaking as a bear on the intermediate trend, I say thank you Mr. Kuroda.  Everything, including clear as day analysis on the precious metals sector, is brought up to date in 34 highly graphical pages; and I feel that I, as a puny little market participant, am as well prepared as possible after once again doing the work.

I no longer tend to offer discounts or other incentives, as I see happening with some services as a bear phase engages.  Frankly, this work is still under valued at today’s price.  You read the more formal stuff at nftrh.com and the less formal stuff at biiwii.com.  You know who I am by now.

The screen shot reprises the old Whack-a-Mole shtick and then NFTRH 380 gets down to serious business.  This market is burping up data points and parameters left and right.


The Post-BoJ Landscape

By Biiwii

After the Bank of Japan action…

I have let things settle out and even though I am short an investment bank, a bank index and a Semi equipment company, I am positive on the day.  That is not to minimize the fact that today would be much nicer had I held SPY and GOOGL, but it is what it is.  Not bad.

Going right into Kuroda’s wheel house I purchased a stock that just yesterday I noted as being a formerly over hyped (though high quality) Machine Tool company pitched by financial suits as a Robotics company…

A Prime Machine Tool Builder w/ a Hyped Twist Falls Flat in Q4

Fanuc got hammered again today and considering BoJ’s stance on the Yen, I took a shot on this exporter.  You see, BoJ had been talking about reforms and certain financial entities had been explaining a bullish thesis on Japan, in part based on reform and the potential of a strengthening Yen (don’t look now but Japan’s banks are conspicuously bearish today).  Well, that is out the window as any wax that went on was stripped right back off again by BoJ last night.  Indeed, not only is the wax off, they are grinding down into the metal now.

Continue reading The Post-BoJ Landscape

Long Bond CoT Discrepancy

By Biiwii

I have turned comments on for this post so that anyone with the answer (or an opinion) can chime in.  I have not allowed comments for years now because a) I don’t have time for trolls and b) there was a formatting issue last time I tried it.  But I may allow comments for select posts (assuming the format is not a mess) and see how it goes.

A subscriber and keen market watcher sent me a link to this ZH post touting a massive net long position in the long bond:  The ‘Smart’ Money Has Never Been This Long the Long Bond.  That post used a chart from GaveKal to make its point.

30yr yield and cot

But he also sent a CoT chart (also by way of GaveKal) of ‘US Treasury Bonds’ that looked nothing like the chart above, asking if I know why they are different.  Answer: I don’t.  I thought, what are “US Treasury Bonds?”, i.e. maybe it was of different duration?  So I pulled the individual 30 year at Sentimentrader and indeed, it is nothing like the ZH chart.

Continue reading Long Bond CoT Discrepancy

China’s ‘TIC’ for May…

By Alhambra Investment Partners

TIC For May Is Really What Is Missing About China

The latest update for TIC “flow”, for the month of May, was mostly what was expected given the “dollar pause” at that time. Central banks were still active but not nearly as engaged as they had been through the worst parts of the “dollar” crisis in late 2014 and early 2015. Official accounts (central banks and foreign governments) had turned positive in May for the first time since November, and even treasury mobilizations had dropped considerably.

This is not to say that all was decent and good about the “dollar” in May, only that it wasn’t nearly so vibrantly depressing. Given the activities in July, we may find out through TIC a few months down the road that this was the proverbial eye of the hurricane.

ABOOK July 2015 TIC Official UST Continue reading China’s ‘TIC’ for May…

Large Investors Can’t Buy US Dollars

By Steve Saville

I was recently sent an article containing the claim that during the next financial crisis and/or stock-market crash there will be a panic ‘into’ the US dollar, but that unlike previous crises, when panicking investors obtained their US$ exposure via the purchase of T-Bonds, the next time around they will buy dollars directly. This is wrong, because large investors cannot simply buy dollars. As I’ll now explain, they must buy something denominated in dollars.

If you have $50K of investments in corporate bonds and stocks, then you can sell these investments and deposit the proceeds in a bank account. You can also withdraw the $50K in physical notes and put the money in a home safe. In the first case you are effectively lending the money to a bank and therefore taking-on credit risk, but the deposit will be fully insured so the credit risk will be close to zero. In the second case you have no credit risk, but there will be the risk of theft. The point is that it is feasible for an investor with US$50K to go directly into US$ cash.

This is not true, however, for an investor with hundreds of millions or billions of dollars.

If you have $1B of investments and you want to ‘go to cash’ you can, of course, sell your investments and deposit the proceeds in a bank account. The bank will certainly be glad to receive the money, but less than 1% of the deposit will be covered by insurance. This means that more than 99% of the deposit will be subject to credit risk (the risk that the bank will fail), which can be uncomfortably high during a financial crisis. In effect, depositing the money at a bank will be risking a loss of almost 100%. Not exactly the safety you were looking for when you shifted to cash!

Also, if you have a huge sum of money then removing the money from the banking system will not be an option. First, you probably won’t be permitted to convert such a sum to physical notes, but even in the unlikely event that you are permitted you will have the cost of transporting, storing, insuring and securing the cash. This cost will be large enough to preclude the exercise. Furthermore, accumulating a physical cash position of that magnitude will have the undesirable side effect of drawing greater government scrutiny to your business dealings.

Therefore, if it’s US$ exposure that you want and you are looking for a place to safely park a large quantity of dollars for a short period, you really have no choice other than to lend the money to the US government via the purchase of Treasury notes or bonds. That’s why a panic ‘into’ the US dollar will always be associated with a panic ‘into’ the Treasury market.

T-Bond Open Interest Peak Looming

Guest Post by Tom McClellan

T-Bond Open Interest
November 20, 2014

It is time again to look to a fascinating signal from T-Bond futures open interest, one which gives really reliable signals, but only for a fraction of the time.  There is a really interesting price behavior that I have noticed in relation to this open interest peak, which I want to share with you this week.

Continue reading T-Bond Open Interest Peak Looming

The Treasury Market Safe Haven Bid is Bogus

Guest Post by Bruno de Landevoisin

It’s not about the current Dollar & Treasury market safe haven bid, it’s about tomorrow’s confidence in our monetary system.  


Are you confident?

Have you asked yourself why Gold remains by far the best performing asset class of the entire new millennium.  It’s an undisputable categorical fact, and there clearly is a well established and completely understood reason for this. Monumentally excessive irreversible debt loads can no longer be discharged without necessitating the devaluation of the currency. Due to this certitude, throughout this millennium we have experienced an extended period of extraordinary monetary accommodation which is unprecedented in the modern central banking era.

Continue reading The Treasury Market Safe Haven Bid is Bogus


Who would have thought that you could stow cash away in a safer equivalent (1-3 year US Treasury bonds), keep your principal, add asset value and get monthly income?  Well that’s what my primary cash ‘equiv.’ is doing now that the bull fantasy of organic economic growth seems to be coming unglued or is at least getting a righteous adjustment.  Of course the likes of SHY could eventually be secondary to a certain pretty, heavy and much reviled elemental relic in this atmosphere.


TIPs Continue Upward

Since we noted a couple weeks ago that the TIP fund was trying to put in a short-term bottom, it ground around but continued upward.  Of course, with the smell of risk ‘off’ in the air, TLT has gone up even better lately.

What I find pretty cool is the inverse nature of TIP-TLT and USD (UUP) in the lower panels.  We are still on the potential ‘inflation trade’ (anti-USD) bounce theme but it is safe to say that for it to get going, TIP-TLT would need start climbing.  I have some TIP and STIP to go along with SHY as part of my ‘cash equiv.’ but think of it more as an indicator.