we are not boneheads we trade this thing up and down. You did not respond when the thing went down 6 handles in a week but come back as stocks go to 5 year lows and the Chinese are grabbing every piece of US paper issued. I also said I would buy it but when it was 113 handle but don't belittle people or talk about it others were very nice to praise me and I do not seek that but please add something to this discussion oh wait you won't till after spooz rally back to 930-1000 (and the Zb is down to 115-118 handle) and when ES get killed again you will repeat your statement old and done.
just had a dream: won't be long before the Chinese own the lot, after all they are about the only ones having substantial US $ reserves ( and they may as well make use of those before the US $ is worth next to nothing - certainly a lot of other countries don't want them. ) first you teach them everything you know, then you give them all your manufacturing capability, then you give them the capital to manipulate the markets so what's left to give away? Sun Tzu would be proud of winning this war without ever firing shot. (at least I hope it is only a dream, please wake me up) M.
U.S. Treasury YR Price Yield 2-Year Note 100.31 0.99 5-Year Note 103.256 1.94 10-Year Note 104.22 3.20 Long Bond 113.01 3.76
glad I hit my downside limit and went home at 8:45 am this morning. Thank god for that! Ronin you were right in the end but I wish I could take 5-6 handles of heat to make ten if that is you then you are a well capitalized shark or should I say whale I hope I can trade that way one day! 6 Handles in one day is sick.
and the overnight move in the 10 year notes was unreal, I'm spinning, have not had a lot of sleep yet.... Maria
7:14am ZB 127.08 7:28am ZB 125.10 2 handles in 14 minutes come on untradable! Spooz for me today! Ten Yr. Basis 20 tick move in an hour = untradable!
http://acrossthecurve.com/?p=2155 quoted explanation for the 30 yr move: "we have seen heavy receiving from insurance companies and real money who are faced with significantly lower assets and have seen the duration of their CMBS positions shorten dramatically as dollar prices have fallen over 40% in two weeks. We know that pension funds are underfunded and need long dated assets and that structured desks need to receiving the long end both as the curve inverts and the yen appreciates. option desks are short significant amount of low strike receivers on 20y and 30y tails from the pension fund risk reversal trade (starting in 2003 when pension funds first started to become underfunded and the longer dated forwards were around 6% they went on huge programs in which they gave up their upside- sold 7% payers (+100 bp) since 7% was greater then their liabilities to buy 5% (-100 bp) receivers to lever up in a low rate enviornment). Since that time they have consistantly been rolling out their low strikes, leaving dealers short gamma and vega on the long end. given that the rates came into the week already at historic lows they have been reluctant to cover their shorts as those rates moved 150 bp, resulting in a capitulation yesterday. In my commentary on Monday i stated all of the reasons why the market was too cheap and that a few different ways to get long the belly of the curve. While those reasons are all still valid, at this level in rates it just doesnt make sense for insurance companies or pension funds to receive the market as their liabilities are higher then 3% and they would just be locking in losses. It seems to many are now in the market cant sell off camp which makes us very succeptable to a big flush out on any news by the fed/treasury/govâtâ¦.. and oh i should add that gamma was up another 8 bp vol (1m10y is now 212 bp vol) and vega another 4 bp vol as dealers and agencies are short from the contraction of their bermuda books. "
So what now? Kudos to those who were long last week and sold above 128 and 129 and.or went short into the spike. I shorted way too early and had to cover. Don't ever listen to "The Dude" when it comes to ZB... Will it go to 129 anytime soon? I have no idea but it seems thin. InvertedC, you still trading it intraday?