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Lawrence McDonald Profile picture
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24 Feb, 4 tweets, 1 min read
If you are trading stocks right now (especially tech), you must realize, you are really trading bonds.
Is your pension fund long duration?

-24% off sale.

#Bonds Image
*NASDAQ 100 EXTENDS DECLINE TO 2% AS TECH STOCKS SINK - Bloomberg

(2)
US Treasuries: Rates futures, puts trading expensive to calls, most in seven years. Options, bond skew all one sided, while swaption volatility surged, highest levels since the March liquidity drama.

Via @BearTrapsReport

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Lawrence McDonald Profile picture
26 Feb
The Year 2021

Two 6 standard deviation moves so far.

- hedge fund deleveraging in the GameStop drama.

- relative value rates, sell-off in 5s vs rest of the curve, US treasuries.

*in both cases too much capital was hiding out in crowded venues.
When central banks do NOT allow the business cycle to function over longer and longer periods of time - the good news is wealth creation becomes colossal. Bad news is Capital moves into crowded venues, poised for disruption.

(2)
In rates, as the bond market sold-off. Originally, the long end 30s was deemed at risk, capital moved into 10s, 7s, a “safe” place. As selling pressure moved into the middle part of the curve, trillions moved into the front-end looking for duration risk shelter.

(3)
Read 4 tweets
Lawrence McDonald Profile picture
28 Jan
INTERACTIVE BROKERS PUTS SOME OPTION TRADING INTO LIQUIDATION - Bloomberg

*Market participants wisely moving ahead of the regulatory sword.

Very important read, new updates here:

thebeartrapsreport.com/blog/2021/01/2…
*ROBINHOOD RESTRICTING TRANSACTIONS FOR GME, AMC, BB, OTHERS - Bloomberg

(2)
*SENATE PANEL TO HOLD HEARING ON CURRENT STATE OF STOCK MARKET - Bloomberg

*more macropru pressure on Powell. China has more interest in systemic risk reduction than Federal Reserve right now? See #PBOC actions.

cc @steveliesman @jturek18 @GabyHeffesse

thebeartrapsreport.com/blog/2021/01/2…
Read 4 tweets
Lawrence McDonald Profile picture
27 Jan
Companies Outed by Short Sellers

Enron
Wirecard
Sunbeam
Lehman
Worldcom
Madoff
Cendant
Tyco

*In a world of state-controlled central bank liquidity, message boards, and leverage; who are we actually protecting?

Must read:

thebeartrapsreport.com/blog/2021/01/2…
White House Psaki: says the Biden team is "monitoring" the surge of GameStop shares. 

"The stock market isn’t the only measure of the health of our economy”

What can the Fed do? New toolbox?

thebeartrapsreport.com/blog/2021/01/2…
Froth Impact: Market Trigger’s the Policy Response

SEC: “We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets.”

(2)
Read 4 tweets
Lawrence McDonald Profile picture
10 Jan
Goldman Year End Targets vs. Current Level

Gold: $2300 vs. $1835
Brent: $61 vs. $56
Copper: $9500 vs. $8100
Core PCE Inflation: 1.6% vs. 1.4%
US GDP: +6.4% vs. -3.4%
Treasuries: 1.30% vs. 1.11%

via @BearTrapsReport
One of the problems with sell side banks is a classic silo-ization. Splintered fiefdoms litter the field often times with little top down coordination between the views of equity analysts, economists, high yield bond traders, fixed income strategists, rates trading etc.

(2)
Each group is a power center with their own p/l, their own Senior MD leadership - with the highly profitable silos carrying the most weight, influence over high level decision making across the firm. In periods of significant market dislocations

(3)
Read 7 tweets
Lawrence McDonald Profile picture
8 Jan
Indoor dining restrictions, weather seasonal impact. Leisure & Hospitality Sector, a colossal 498k jobs were lost in December, 372k of those L&H layoffs were at restaurants and bars. Fiscal relief is NOT focused here, should be.
In the first week of '21, Wall St. strategists already have to revise their growth forecasts and average missed on jobs numbers. Reprint the 500-page new yr outlook, a good kindling recourse for the fireplace.

(2)
Why does @stoolpresidente have more focus here than Congress? House and Senate are shotgunning billions of dollars around the planet. More targeted U.S. focused assistance to those in need is in order, asap.

(2)
Read 4 tweets
Lawrence McDonald Profile picture
4 Oct 20
US 30 Year Bond Yield

Oct 2: 1.49%
Aug 6: 1.16%

*when stocks or bond yields, don't go down when they should, it is very telling...
Since Early August - 60 Days

Microsoft $MSFT -5%
Amazon $AMZN -1%
Nasdaq 100 $NDX +1%
Materials $XLB +6%
Dow Transports +12%

via @BearTrapsReport
Look at the above two tweets and ask yourself one question. Where on earth would the performance data be if we did NOT re-lockdown and had a vaccine? Then think about the next 12 months.
Read 7 tweets

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