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PlungeProtectionTeam Profile picture
@gamesblazer06
Jul 10, 2020 • 10 tweets • 5 min read • Read on X
Real Rates aren’t gonna be this low forever...Break Evens Lead with Copper. #Reflation
10 yr tsy bonds to moon trade. Crowded like 10 year Tsy Bonds to Zero crowd back in Fall ‘18..Scary Charts back then now it’s Scary Charts to Zero Yields. Truth probably somewhere in middle. CFTC Spec 10 Yr Govt. Bond Longs now ripping to +31K.. vs -756K Short in Fall 18.
#DV01
Just a matter of time..
#Reflation
Image
10 Yr Break Evens.🚀

Buffett no dope...adds to Most Asset Sensitive GSIB in US this week..Literally when Long End ripping on huge bid..& unamortized Agency premium charges gonna linger in 3Q.. But Long End erasing Bad Debt with Lower Real Rates.
#RecoveryYr #Sequence ImageImage
Now CFTC 10 Year Govt. Bond Contracts are at +73K Contracts... Intelligentsia still got them Long Term Charts with Yields breaking down.. just like they did back in Fall ‘18 breaking up.. it’s a Momemtum feeding frenzy.
Trades at 189x P/E.
#DV01 #Reflation
5Y5Y +4bps this a.m to 1.91%.
#Reflation #DV01
3M Cross FX Basis moving back to par.. FRA OIS still flat as a pancake.
10 Year Govt Bond was trading at a 192x P/E.

Bye bye
10 yr at 197x P/E...Like cautionary tale of getting too close to the wall of Jedi Transition..getting too close to perfection can sadly end very poorly for even the best aviators. Sometimes don’t let great get in the way of good enuff.


@BlacklionCTA #FatherCrowleyOutlook
If u have been short from 100+ back in March on no Depression 2.0..now 93..u can never go broke booking a gain & cashing in..Severely over shorted with CFTC Specs now -7K..& come back later. gains can also be on econ strength as 10 yr < 200x PEs get DV01d at some point.
LIBOR OIS has now collapsed to 24bps from over 90bps back in March...there is some bank to bank risk... NII starting in 4Q20 could stabilize with better economic news. strength doesn’t have to be on weakness imho @SantiagoAuFund
#Reflation

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More from @gamesblazer06

PlungeProtectionTeam Profile picture
Nov 2, 2022
Problem with the Fed is they suddenly have this view that they can just put the Deflation toothpaste back in the tube with the utmost of ease. It’s very complacent, unfortunately.
This is nothing like the 1970s to even use a Volcker playbook is flat out wrong.
There are enough Academics & Street Intelligentsia that are convinced Inflation is entrenched like the 1970s… thus the issue.
Read 4 tweets
PlungeProtectionTeam Profile picture
Nov 2, 2022
CPI 8.2%… 1 Year Breakevens 2.85%

5Y5Y 2.66%… we were North of 3% in 2011 & 2012 when we were fighting Deflation at ZIRP.
The Bond Markets don’t believe in entrenched LT Inflation.
The irony is… they never did all the way up to 9% CPI. Peak in 5Y5Y Inflation Swaps were at 2.85% in late April.
Read 4 tweets
PlungeProtectionTeam Profile picture
Nov 1, 2022
Decent thread… I would say around 1Q23 we see Terminal Reserves. This year more of a Balance Sheet Scarcity issue v Liquidity at GSIBs (small nuance that ultimately ends in less intermediation)..& QT can actually free up more Balance Sheet for 2023 in conjunction with RWAs down
Banks have overcome SCB & GSIB Scores get better with less liquidity.. via solid retained earnings + suspended buybacks in 2022…plus at Basel IV end state so SLR relief also on the horizon especially if Congress changes hands, but heavy lifting already largely done in 2022.
So that’s on the Balance Sheet side that’s clearing up… now strictly on Liquidity let’s remember MMFs absolutely provide liquidity into Sponsored FICC Repo which is low Sheet usage coz Netting + also Triparty… so Cash moving from $2.3T RRP would foam runway for further QT….
Read 12 tweets
PlungeProtectionTeam Profile picture
Oct 31, 2022
“Internal metrics thus far in October suggest continuing solid performance in 4Q22 as Sep did v Aug & Aug v July. It’s certainly possible things could change for the worse..but that would require an adverse change that we don’t broadly see in current environment.”
- $GPN CEO
$GPN clears $900B+ of annual Merchant Processing Spending Volume w 3Q22 at +11% YoY.
First Data TrendSpend +9.33% YoY for the Full Month of October.. that’s 1/3 of 4Q22.
Read 5 tweets
PlungeProtectionTeam Profile picture
Oct 14, 2022
$JPM 3Q22 Solid Beat:

Rev $33B +10% YoY
NII $17.5B +35% YoY (Once again Raising FY22 Guidance to $66B on Hikes & subdued Deposit Betas)
Loans +7% YoY w Flat Deposits YoY… Fed’s draining continues but Bank Liquidity is extremely strong w 113% HoldCo LCR & Bank OpCo at 165%…
Reverse Repo was down 6% QoQ…not surprising given GC/SOFR still at RRP Floor & massive Hikes offering huge IORB returns w Loan Growth that’s partially been funded on RWAs at expense of Cap Markets.. $JPM usually Repo Liquidity provider at 11AM Repo Stress..& prices accordingly.
Front End Stress non existent.. given huge Buffers.. but Long End Stress was coz SLR etc… still needs recalibration.. better to front run $JPM imho… they will ultimately be buyers…
Read 13 tweets
PlungeProtectionTeam Profile picture
Oct 12, 2022
September PPI Final Demand +0.4% MoM… last month MoM revised down to -0.2% MoM.. +8.5% YoY.

Core PPI +7.2% YoY v +7.3% YoY in August.

PPI Series Peaked in March 2022 at +11.7% YoY. Core CPI Series peaked in March at +9.7% YoY.

Inflation Deceleration continues..
September CPI… +8.2% YoY vs a recent high of +9.1% YoY in June.

Core CPI +6.6% YoY took out +6.3% YoY high in March.. Core driven mainly by Rents… Rental Appreciation is BLS sticky… But in the Real World appreciation has been cut in 1/2 already.

Energy down big…
BLS OER Estimates are +6.7% YoY v +6.3% YoY in August…

OER Growth Rate is in a +2.78 Sigma Right Tail Bubble (data since 1984)…

We already know Rental Growth has been cut in 1/2 in September in the Real World.. Ask Sternlicht or Redfin.

Rental Bubble already popped.. Image
Read 28 tweets

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