So what you are saying then is that those who shorted March 09 and beoynd, either still have their positions or they closed them with a loss but did not go broke.
Why to you think it is logical for bonds to go up when the debt limit is raised? A raised debt limit means more bonds will be printed. The treasury will buy plain paper, $5 worth of it, and print on it $2 trillion worth of obligations. It is clear that someone was buying bonds yesterday to send the stock market down. Maybe you are too young to know but this has happened before, in the 1990s. Big firms were prosecuted for manipulating the bond market and eventually the dollar and the stock market. I am getting the impression that the sqeeze in on a very outspoken bond fund manager whose firm has damped US bonds and went short not too long ago. Something similar happened to LTCM. When someone gets too arrogant in this business, others team up to get his money. The retail investors is cought in the middle and gets crashed. Monday's market was not normal action. Far from it.
Because the debtor is tightening his belt, is not defaulting, and a third reason I cannot write in here. As for your supply analysis, while I would agree with it in the case of other countries, it would not apply to the US, because the US is the rock base on which other prices are built which invalidates any supply based analyses-- the rock base is a rock base only if it is believed not to be moved by the weight put on top of it.
No, you argument is not logiccal because bonds do not only go down when there is fear of default and it is also the case that the debtor is not tightening belt, as a matter of fact it is rasing debt limit. Therefore, your premises are false and any conclusion based on those it is also false. Commodity prices for the last 8 years have been largely determined by economic activity in China mostly and then India and some other Asian and Latin American countries, therefore, this argument is also false. I regret that I have to disagree with everything you wrote
Market will end up positive today. At least a little. Here are the reasons: 1- Too much bad news priced in 2- Many investors are scared - Contrary effect 3- Senate will vote yes today so you don't want to get caught in possible rally 4- If you were short, today is a good day to cover which will drive the market up Those who stay short today or initiate a short, are: 1- Either they know too much. 2- They are stupid novice traders who just listen to CNBC 3- Have a longer horizon which don't mind if their position goes against them 5-10%