Lots of media hype. Nonetheless interesting. The total futures value is $1B? Or only the margin they placed? From which brokerage the trade came from? If its Goldman Sachs then it's something to worry about
Get you facts straight. The majority of the US debt is held by US. A technical default would shake away many weak hands that will panic and not hold bonds to maturity and give the treasury the opportunity to buy back those bonds really cheap, bringing the debt down by 50% overnight. This is America. Be very careful with whom you mess... http://www.businessinsider.com/who-owns-us-debt-2011-7#ixzz1SigWIR70
Big time. My first reaction was that the author had never seen a live CME or Eurex Treasury futures order book in his life, and had no concept about how truly ordinary and mundane and routine his observation really was. So, in his bio on the 'website' he worked in the PR department at Franklin-Templeton Funds and is a part-time fireman with the Forestry Service. Which of course explains the article's genesis.
This clown wouldn't know an "edge" if it stepped on his dick. What happens when the debt limit issue gets 'resolved' and they rally to October 2010 levels ? Whomever took the other side of the trade has had three days and counting to book a profit if they were so inclined.
Well excuse me! It would seem that you are a prime example of someone who lets his emotional patriotism lead over the cold facts of day. Your post proves my thesis as you have clearly trawled the internet (a fountain of dubious and incorrect information) until you have found a 'story' that supports your hopes, encouraging your hypothesis that it is easier to keep ones head in the sand. Why, even the US govt agrees with my stance, and disagrees with which ever sold-out hack cooked up that story you posted. Not everything on the internet is true you know! http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt Boy would you believe it! The Chinese are in fact the largest holder of US debt. BTW, I think a 'technical' default as you put it will lead to a little bit more than a 'shaking out of weak hands' just like the Greek default shook out more than the weak hands, and the strong hands, and the banks, and the governments, and the.... Lets wait for next week when USA gets down graded. SSSSOOOOOOOOLLLLDD!! Next.
A good point, but if it was a basis trade, wouldn't an EFP or EFR have been better than a Block? I thought the benefit of a Block was that it can be executed away from the market, giving the party who will be off side an immediate chance to cover at profit, while giving the other side a 'wholesale' price for taking a large chunk of inventory off the other sides book?
I think there is to much risk (or profit) to be reaped from trading bonds right now... this is always true, but in tumultuous times such as these now the moment is more relevant than ever in recent history. I personally will still away from trading bonds until the situation clears....
"The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01." "The number of shops or even central banks that can take on this level of market risk is extremely small. Some that come to mind are hedge fund manager John Paulson, Bill Gross's PIMCO, and the U.S. and Chinese central banks." This is so unbelieveably wrong I don't know what to think.