Post

More from @biancoresearch

Jim Bianco

@biancoresearch

Apr 12

1/16

What Happened to Bonds Last Week?

🧵

Last week, the 30-year yield rose 46 basis points last week to end at 4.87%.

As this chart shows, this was its biggest weekly rise since April 1987 (38 years ago!).

2/16

Why Did This Happen?

Let's start with what it was not. It was not data that suggested the economy was strong or recent inflation was high.

Here is a tick chart of the last 3-days of the 10-year yield.

3/16

The better-than-expected CPI and PPI reports (green) had no impact on the 10-year yield.

The worst-than-expected Michigan Survey (red), with its collapse in sentiment implying a severe slowdown or recession, did nothing to stop the drive in yields to the highs of the day.

Read 16 tweets

Jim Bianco

@biancoresearch

Apr 10

1/4

How stressed are markets? By this metric, the most in 17 years.
---
SPY = The S&P 500 Index Trust. This was the first ETF created in 1993 and is one of the largest at $575 billion.
----
The middle panel is SPY's Net Asset Value (NAV). The price closed at a 90-basis-point premium to the underlying value of the assets.

The last time anything like this happened was 2008. To emphasize, not even in the crazy days of 2020 did its divergence get this big.

2/4

VOO = Vanguard S&P 500, $566 billion in assets

At the same time VOO, which is Vanguard's version of SPY, went out at one of its biggest discounts in years (middle panel).

3/4

Finally, IVV iShares Core S&P 500 ETF, $559 billion in assets
It has been trading at a persistent discount for a few weeks (middle panel).

Read 4 tweets

Jim Bianco

@biancoresearch

Apr 9

Something has broken tonight in the bond market. We are seeing a disorderly liquidation.

If I had to GUESS, the basis trade is in full unwind.

Since Friday's close to now ... the 30-year yield is up 56 bps, in three trading days.

The last time this yield rose this much in 3 days (close to close) was January 7, 1982, when the yield was 14%.

This kind of historic move is caused by a forced liquidation, not human managers make decisions about the outlook for rates at midnight ET.

It keeps going, the 30-year yield is now 5.00%!

As chart shows, since Sunday Night, 54 hours ago, the 30-year is up 67 basis points. Cannot find a move like this in my database.

The only overlay is the 30-year Gily blowing up during the Liz Truss moment" in September 2022. That was 130 bos in 5 days. We are now 67 bps 2 1/2 days.

S&P futures are down another 100 points or 2% tonight as I write. This sell-off might not be about tariffs but on the realization that the bond market is broken/breaking.

Markets are fragile. Tariffs broke the bond market and now this decline is about this realization.
---

A liquation is underway and must be completed, losing positions have to be exited, not supported or ignored.

Cutting rates and making financing rates cheaper in the middle of this kind of liquidation, encourages speculation ... exactly what is not needed in the middle of such a move.

I think the market knows this which is why the chart below shows only a 63% probability of a cut in rates in a month. Not intra-meeting! Rates cuts are not the answer.

The Fed restarting QE to artificially raise bond prices will only cement the belief that a massive spike in inflation is coming.

This is not a problem that can be fixed with "printing." It was years of "printing" that encouraged the massive build-up in speculation that is now being forced to liquidate.

You cannot drink yourself sober. You can encourage speculation by cutting rates/WE to stop a speculative unwind.

Read 7 tweets

Jim Bianco

@biancoresearch

Apr 7

1/n

Polymarket betting for an emergency rate cut is 26%. This looks consistent with April fed fund futures.

2/n

Fed fund futures now have spiked to a 77% probability of a rate cut on May 7.

3/n

Market are crashing and the economy barreling toward a recession.

Read 7 tweets

Jim Bianco

@biancoresearch

Mar 30

1/14

67% of the US Federal debt outstanding can be tied to military spending.

Getting Europe/Canada and the rest of NATO to take up more of this spending can take a huge weight off US government finances.

Europe/Canada appear to be willing to do exactly this.

🧵

2/14

European leaders have gotten the message from Washington about doing more for their own defense and for Ukraine, too.
nytimes.com/2025/03/26/wor…

3/14

Europeans are mooching and that any American military action, no matter how clearly in American interests as well, should be somehow paid for by other beneficiaries.

nytimes.com/2025/03/25/wor…

Read 22 tweets

Jim Bianco

@biancoresearch

Mar 27

1/6

Uncertainty measures, sentiment swings, and doubts about American Exceptionalism have all been overdone. They set up a sentiment low in markets.

Now, markets are bouncing back.

🧵

2/6

The Policy Uncertainty Index is from the 10 largest newspapers' policy stories that contain words that denote uncertainty.

March 11 this index reached its highest level in over 40 years, higher than 9/11, the Iraq War, the Financial Crisis, and the Covid-19 shutdown.

3/6

Did last week’s buildup to Trump’s April 2 tariff announcement (aka Liberation Day) really exceed the uncertainty surrounding these other events? Investors are reacting as if this is the case.

Investors’ Intelligence is a survey of newsletter writers about the stock market. The bottom panel of the chart below shows that in the three weeks ending March 11, the same day as the uncertainty peak above, the percentage of respondents describing themselves as bullish declined by 21.6%. This is the fastest exit over three weeks since the 1987 stock market crash.

Read 7 tweets

Share this page!

Enter URL or ID to Unroll

Jim Bianco

Try unrolling a thread yourself!

More from @biancoresearch

Jim Bianco

Jim Bianco

Jim Bianco

Jim Bianco

Jim Bianco

Jim Bianco

Did Thread Reader help you today?

Don't want to be a Premium member but still want to support us?

Send Email!