Pabst's Blue Ribbon Trades

I sold another 10 Bonds at 110.15. Short 20.

 

Don't you think that bonds are in a "squeeze" area?
It may come at any time soon...

 

I'm not a complacent short.

A steady downtrend like this could turn into a "squeeze" in a moment's notice.

However: Many longs are under water. Fed policy is on hold. Metals, energies and the Dollar have bond investors nervous. Yields should at least take a look at 5% on the 30yr.

 

Paid 06 for 10 ZB.

 

I'm long 20 Corn futures but 10 of them are aced out by 10 CK 360c shorts. That's fine. My July's have plenty of +d.

Beans are a thorn in my side. I'm long a de facto 20 futures. I really need this pop!

I'm also long 5 CTN. I HATE that position.

Edit: Still short 10 Bonds.

 

S 5 CTN 53.25, think I made a few points. Good riddance. (for now at least)

 

B 5 sk 39.50

 

Bittersweet. While grabbing a burger I was filled S 5 SK at 41 1/2. I'm unable though on scaled sales from 44-46. Also unable on a bond offer up at 1010.

 

Everytime I would like to short 200 bonds I am reminded of this



China On track to add $500b to its reserves in 2007, heading toward $2 trillion fast …
Brad Setser | Apr 13, 2007 Please allow me a bit of latitude. China won’t add $500b to its reserves in 2007 for the simple reason that the central bank will some of its reserves to the state investment company. Moreover, China might opt to ship some of its spare dollars over to the banks. But rather than spell those qualifications out, I am going to talk of “reserves.”



There is just no way to get around the fact that China bought a ton of foreign exchange in the first quarter. Its reserves went up $135b in the quarter – topping its previous record quarter ($85 or so in q4 04). Only about $5b of the increase came from valuation gains v. $20b or so in late 2004, so China actually bought a lot more fx in the market now than then -- $130b v $75b (by my estimates). $130b in a quarter works out to $520b for a year.



To paraphrase Macro Man – who is almost as reserve-obsessed as I am – China accrues foreign exchange reserve faster than Britney Spears accrues tabloid headlines.



Jon Anderson of UBS is more measured, but he still wrote:



.. "We're shocked. From trend reserve growth of around $20b a month in 2006, January, February and March rolled in at nearly US$50b a month, or $140b for the first quarter as a whole. This is more than just a jump. The magnitude and abruptness of the acceleration are simply stunning."