🧵on Twitter conduct. This is an epic forum for finance, market enthusiasts and we have to cultivate and grow it. We have a culture and etiquette, and I am sharing a priceless lesson from last week how you can get more here.
2/Whether you realize it or not there are several people, most widely followed, running money for a living, and are consummate professionals. They are often happy to help.
3/Last week I needed to reach out to two of the best and both were most generous with their time. They are the finest of gentleman, but it takes a while to grow relationships to ask the questions I did.
3/I've run money for clients, myself (still), and now at a family office. I've traded rates futures from STIR to Ultra's, and now focus on STIR, #ZB_F, and 2Yr when I trade rates.
4/I've not traded UST futures in size in spreads. Additionally, I've only been a Bloomberg user for 18 months which means I've used about 15% of its capability, maybe.
5/We've been talking about curve steepeners with the 2M/10Y at century deep inversion. I've done the math on spreadsheets, but not in size or in Bloomberg. After days grinding in Bloomberg, I got the nerve to ask @EffMktHype and @JorgeCalderonMx for help.
6/EMH and Jorge were both willing to help timely for me to interpret Bloomberg. I cannot say enough about how gracious and generous both were. I learned a great deal in little time.
7/I've received questions from others and thankful for the opportunity, so I get it. Here are some things to consider about how we conduct ourselves on #fintwit, learn, and grow the community.
8/ •If you disagree with someone, try asking a question instead of "Yeah, fuck off bro, have fun being poor..."
•Always consider and respect time frame. Your timeframe is likely not aligned with your audience or the original tweet.
9/ •For those in the back: mismatched timeframe is the root of 90% of disagreement on #fintwit.
•Try thanking someone for their content or comment how it helped you. Good posts get 100 likes, the 101st like isn't getting noticed.
•Disagree? Back it up with some data, a chart.
10/For those who are doing this for a living some thoughts:
•75% of the pushback comes from anon accounts with less than 100 followers. Is it really worth your time to argue with them?
•Timeframe
•When someone does reach out it makes a big difference to respond.
11/If you are curious about how relationships grow and mature here. Check out @bennpeifert He runs a master class on sharing and responding to high quality content.
This may be Elon's business, but it's our community and what we make it.
Supporting my thesis.
• • •
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One of this morning's projects was to use @TheTerminal to better analyze Macro/FX. Spent time on 🇯🇵. No alpha here and hope others will point out what I'm missing. 🧵
1/ JPY/USD Cross Rate. The Sept 22nd BOJ intervention is evident as is the 145 level where the intervention occurred. Others have mentioned it was as much the rate of change as the absolute level prompting the intervention.
2/ Why is the Yen weakening so dramatically against the USD? Basic answer: Rates. While the rest of the world led by US is raising rates and tightening financial conditions Bank of Japan (BOJ) is dug in with loose financial conditions including negative policy rate.
Post Jackson Hole Review🧵
Treasury Yield Curve: higher on the short end and in the belly, lower on the long end i.e. flatter. Reflects expectations FOMC may raise higher than expected and keep rates there longer dampening growth/inflation in the out years.
Treasury Inflation Protected Securities TIPS yield curve. Up sharply on the near.
UST Breakevens all down post Wyoming with 2Years declining the most as the market sync's up with J. Powell's serious speech on Friday. Also note 2Yr < 5Yr again.
Evidence of inflation and supply constraints easing across the macro landscape save one: Labor and the potentially dreaded wage🔃price spiral (edited for incorrect charts)🧵
2/US Civilian Labor Force (supply) <pre COVID.
3/US Employment Total Labor Force (supply) <pre COVID.
TIPs Yield Curve. This is the first time in my memory since pre-2020 cold/flu season that all tenors have been >0. Interested to hear from others if a) that is correct and b) significance.
The shift up in TIPS curve is more than the shift in nominal yields lowering inflation expectations derived from the Nominal - TIPS spread in the bottom pane.
One area this manifests itself in markets is Gold futures. $GC_F peaked March 8th and has declined 13% since.
Brief Credit Market Stress🧵
1/Agg Corporate - High Yield Spread narrowed from 4.23 to 2.87 in just over a month.
2/MOVE Index is still elevated, but stable in a range around 122.5.
3/Gov't Securities (Treasuries) Liquidity Index keeps going higher. The market can and is functioning at this elevated stress level. I think it will be an issue if there is market dislocation that starts moving treasuries in size. The liquidity isn't there.
1/It's the weekend, macro review, and time to post Reverse Repo making ATH last week and there will be wailing and gnashing of teeth across #fintwit over this rather uninteresting phenomenon so a 🧵on why it is so high.
2/Fed Balance Sheet Assets: prior to GFC this was <$1T and reflected NY Fed OMO to maintain Fed Funds, then Bernanke lost his mind IMO and started QE. The balance sheet grew from $946B to $4.5T ~8Yrs. We👀paint dry as the balance sheet shrank $700B until August 2019.
3/We had a bad cold/flu season in 2020, lost our collective minds, shut the economy down, and the Fed expanded the balance more using QE in the next 2 years than it did in 8 years following GFC.