I hate both parties, so I stopped going to F16. Apparently, speaking truths about the current state of American politics and how we got here will ruffle the mods over there. It's like they took a couple mods that were hardcore Trump and a couple of mods that are economic illiterate, emotional leftists and rolled the ball out into the middle of the court and said "make this place even more toxic than it was before"

Seriously, that board sucks, and it has nothing to do with the posters. It has everything to do with the moderation. It's also why I left Billy's board. You can't challenge the idiotic 'woke' crowd with rebuttals or you're "RAYCESSSSS"

Mostly Foggy Recollection said:

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I hate both parties, so I stopped going to F16. Apparently, speaking truths about the current state of American politics and how we got here will ruffle the mods over there. It's like they took a couple mods that were hardcore Trump and a couple of mods that are economic illiterate, emotional leftists and rolled the ball out into the middle of the court and said "make this place even more toxic than it was before"

Seriously, that board sucks, and it has nothing to do with the posters. It has everything to do with the moderation. It's also why I left Billy's board. You can't challenge the idiotic 'woke' crowd with rebuttals or you're "RAYCESSSSS"

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FbgTxAg said:

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Prognightmare said:

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Missed you guys!

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Degenerate troublemaker and rabble rouser.

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He's the sort that give that sort a bad name.

It isn't so much ruffling feathers. The business of texags is hosted on AWS servers and in effort to not piss off their overlords they moderate out certain thought.

I'm not debating the AWS connection, but there are some partisan mods that "control" debate on certain threads. It's their business, so to each his own.

I haven't seen any setups that I love while we are at +3 daily ATR. I am going to see what sets up this week. Also OPEX, so it will have to be long theta plays anyway

Powell..."The Outlook Has Brightened Substantially"...CBS 60 Minutes

We watched the Powell interview on CBS's 60 minutes.... He was upbeat as you can see in the headline above.... He sees this years GDP in the 6-7% range... The rest of the talk was boilerplate... No rate rises this year...... Treasuries are opening lower prices, higher yields...but not by much 5/7/10 are about 1.5 basis higher..3's and 30's about 1.2 basis higher... Big auctions Monday..equities are lower by marginal amounts S+P s lower by about 8 .

Our general view of Powell and rates for this year will be dependent on inflation... If inflation soars and is sustained, we expect the Fed to react... We will detail more early tomorrow... Do not expect anything more from us tonight unless markets get unruly.

Mornun Gents!

Hope y'all had a great weekend.

Monday Macros.


Treasuries Caught Between Oversold...Inflation...Supply...Large Short Base

One would have thought that after 18 days of no treasury coupon supply, that today's double barreled auctions of 3 years and 10 years, coupled with tomorrow's long bond auction, with CPI in the middle of it all tomorrow morning, would send treasuries lower... But that is not the case... The war between the longs and shorts continues....Oversold conditions of treasuries is meeting the Godzilla of long duration shorts... So there is a lack of satisfaction from both sides... Even Powell's comment on 60 minutes last night only sent treasuries one basis higher before going back to unchanged

"Powell..."The Outlook Has Brightened Substantially"...CBS 60 Minutes

We get to hear 14 Fed speakers again this week with all of the big boys, including Powell and Clarida on Wednesday ,and Clarida again on Thursday. Clarida's view was very clear in his BB interview Friday... But we have been noticing the change in Powell's tenor, even though he is clearly saying no rate increases in 2021, he is trying to give himself some wiggle room in case the Fed gets dramatically behind the inflation curve...with CPI YOY expected at 2.5% tomorrow and last Friday's PPI 4.2% YOY, transitory excuses will not work... The current supply chain is in trouble and will take much longer to resolve

CTA's... Our Chicago colleagues who monitor CTA's (commodity trading advisors) point out to us that CTA's have held onto their short base in global rates and are estimated to be short an aggregate of 146 billion unlevered holdings of treasuries Bunds, Gilts and JGBs, with the largest short position of 58 billion treasuries. 134-16 is the level that we would expect to see short covering for treasuries in the 10 year futures contract.

Equities... Wilson of MS is still negative on small caps for a trade, while JPM technical team still thinks another melt-up of 10-15% in equities will happen... One thing we have continued to point out is that equity volumes have been declining substantially as indices hit new highs... That is not a good sign... Some tried to explain it as vacation mode over the recent holidays... That is not the right answer..We see retail pulling back permanently... Schwab numbers show a decline of trading week over week of 10%...that is now 7 consecutive weeks of declining trading activity. We are now 40% below peak levels of late January... We think it is two fold...First, the gamblers are gone as sports are back... So the punters that took up stock trading now have their full menu of world sports to bet on... Say good bye to those traders... Second, more people are heading back to work, so the stay at home crowd that spent their day trading are actually back to work... Those people are declining rapidly... That in our opinion is why trading volumes are off... And most of that is not only not coming back, but we expect it to decline further... What does that mean for equity prices?.. We continue to see higher prices until about Mid May, then we get worried as we hit the summer until we reach the fall... Depends on stimulus, but the correlation between more stimulus and higher stock prices is not a strong one. The big option bet on the Vix last week is a precursor to problems ahead...here a mega trader is betting that the Vix, currently under 18, will surge to 25-40 over the summer.

Corporate bond market continues to be in good shape for now...the first quarter was one of the best for HY issuance ever... But there are problems developing in other markets... The WSJ ran a story on Friday about start up companies borrowing heavily through the ABS markets without earnings... Too detailed to discuss here... IG spreads are their tightest in a very long time, some of the offerings we are seeing are absurd out there...

Here are some one offs that got our attention over the weekend... Miscellaneous
1) Jefferies put out a piece that the April non farm payroll number could reach over 3 million... Not one, not two , but three million...
2) Percentage of subprime car buyers more than 60 days late has surged to 10.9%, the most since 2005
3) Buy now pay later company Affirm shows the layaway crowd is up to 4.5 million active customers and 2.1 billion of gross merchandise, up 52 and 55% respectively, from a year earlier

With treasury auctions and CPI, along with 14 Fed speakers, the war between the bulls and bears will continue, so will the war between the Hawks and Doves... But do not expect a conclusion this week.. The uncertainty of rates and equity prices will continue.

Thank you for doing this so regularly. Very insightful!!

This is the dip buy opportunity on Zest. Regular investors saw the amount as a loss. They don't see the big picture and panic sold. We saw this coming but now should stabilize and climb back.

Pretty bloody so far this morning.

More WWR accumulation I guess