1/6
What is the bond market signaling? And how to read it? A thread to detail.
This chart shows YTD 10-yr total return each year since 1973. Gray lines show past years’ returns, while the blue line shows this year’s returns. Through October 21, the 10-year has returned -5.60%.
2/6
Only 3 years posted worse total returns through Oct 21 – 2009 (worst), 1999, and 1994. 2021 is already one of the worst years in bond market history.

How much pain in the bond market does the transitory crowd demand before they acknowledge the market is signaling a problem?
3/6
Bond market volatility is also beginning to show signs of concern, as the next chart shows.
4/6
The next chart shows the 5-year inflation breakeven rate is now at a new record.
5/6
A month ago, Powell said in his presser that the taper was coming in November. He said it again yesterday.

One month ago, the 10-year was 1.30%. The next day the bond ylds broke out (red line below). A month later = 1.70%.

10-year is ylds averaging a 10 bps rise/week.
6/6

Many believe the yields have been driven by the Fed’s $120B/month of QE buying. So, whenever the Fed began to remove this support, the bond market would be in trouble.

Since Powell’s taper announcement a month ago, isn’t this exactly what is happening?

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More from @biancoresearch

23 Oct
@dandolfa
What causes this run on stablecoins that you worry about? And it seems your concern is they will exposure weakness in the current financial system, so those weaknesses must be protected, not that stablecoin growth means it should be corrected.

marketnews.com/region/north_a…
You wrote: "History shows very recently that the might get into trouble if they experience a wave of redemptions than they can't honor the dollar peg, and might feel compelled to dump a whole pile of CP on the market."

Sounds like the problem is CP, not stablecoins ...
What history are you referring to? Seem like USDT has spent most of its life NOT holding its peg (green), yet, the growth of stablecoins has not been bothered by this at all.
Read 6 tweets
20 Oct
1/4

A new wave?
2/4

New, and nearly new, highs
3/4

Showing no signs (yet?) of turning lower
Read 4 tweets
16 Oct
1/13

The supply chain is running at capacity and cannot keep up with overstimulated demand thanks to 18 mos of fiscal/mon priming.

This suggests the fix is not expanding supply, hard in the ST, but to raise prices high enough to reduce demand.

A thread to explain

@RaoulGMI
2/13

The Los Angeles and Long Beach ports collectively unload just under one million containers a month. For the last year, they have been running at/near a record pace.

In other words, they are running as fast as they can. The problem is they are at their limit. Image
3/13

The much-heralded solution is to run the ports 24/7. The problem is the Long Beach terminals are already 24/7 and the LA terminals are already running 18 hours a day. These added hours at LA are only going to increase unloadings by 2%-3%. This is not going to matter much.
Read 13 tweets
14 Oct
1/4

13 years ago today (October 14, 2008) was a very important event that forever changed financial history, and, I believe, provided a big tailwind to Satoshi Nakamoto's new project called bitcoin

A thread to explain
2/n

October 14, 2008 was infamous meeting at the New York Fed where the largest banks accepted $250 billion in TARP bailout money.

The financial world has not been the same since.

history.com/topics/21st-ce…
3/4

I believe this one act forever sullied the banking system's reputation that led to everything from the Tea Party to Occupy Wall Street.

I believe it also provided a big tailwind for a something coming just a few months later, Bitcoin, it’s first trade was January 3, 2009.
Read 4 tweets
12 Oct
1/8

The August "JOLTS" (Job Openings and Labor Turnover) Survey was out the morning.

As these charts show, a record 4.27 million, or 2.9% of the labor force, "quit" their jobs in August.
2/8

More than 20% of quits were in "accommodation and food services." This category is usually the largest, as the chart shows, this was a record for this group.

With some employers desperate for employees and willing to pay $21 to $22/hr for new hires, why work in fast food?
3/8

This type of report is often an indication of a strong labor mkt, employees are comfortable quitting thinking they can find another job.

But as the weak Aug and Sept payroll reports suggest, these newly minted "quits" are not running to new jobs.

reuters.com/world/us/us-jo….
Read 9 tweets
11 Oct
1/6
Now 1800+ flights

*SOUTHWEST COO: STILL SHORT ON WORKERS, ESPECIALLY FLIGHT CREWS

*SOUTHWEST COO COMMENTS ON CANCELLATIONS IN VIDEO FOR EMPLOYEES

*SOUTHWEST COO: `WE NEED MORE STAFFING CUSHION FOR DISRUPTIONS'

*SOUTHWEST COO: `CANNOT TELL YOU THAT WE ARE OUT OF THE WOODS'
2/6

Apparently This is not an organized protest per say.

Rather those that have not been vaccinated, and will not, expect to be fired on October 28 (final date to show proof of vaccination).

So they are using up their accrued sick and vacation days now.
3/6

I’ve argued that the nature of jobs and work has changed. Don’t know what we are transforming too, but it is not back to 2019.

Prior to the pandemic this was unthinkable for employees to do. Now it is happening everywhere.

Something has changed
Read 6 tweets

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