ConvexityMaven
@ConvexityMaven
Creator of $MOVE Index; $PFIX; $RFIX; $MTBA
Publisher of (the free) Convexity Maven Commentary
1 Following 36.4K Followers
New Commentary.....
The CBOT Bond future is Negatively Convex such that a further rate rise could create the equivalent of Scott Bessent selling $110 Billion twenty-year bonds into the market.
Today, I detail the construction of this futures contract and posit that this could be a contributing factor to why interest rates have risen so quickly.
More specifically, be careful that 6% on the twenty-year rate could become a Convexity Vortex.
@profplum99 @LukeGromen @dampedspring @jam_croissant @biancoresearch @EconguyRosie @ErikSTownsend @tracyalloway
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New Commentary....
Today I propose that the reason UST rates are touching twenty-year highs is NOT because of Inflation, but rather the market does not trust the US Government to manage its Fiscal matrix (Revenues vs Expenses).
In what can only be called gross Fiscal mismanagement, since 2001, under equally divided Governments, we have reversed a budget surplus to a relentless 6% deficit while debt has accumulated from $5.8Tn to over $40Tn.
My prescription - While perhaps not quite a redux of Jack Nicholson standing on the wall in “A Few Good Men”, Fed Chair Warsh needs to shock the market and make investors believe he will do “whatever it takes” to maintain US Dollar’s reserve currency status.
@profplum99 @biancoresearch @dampedspring @LukeGromen @DariusDale42 @ErikSTownsend @EconguyRosie @tracyalloway
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