It is notable and a little funny how the followers of 3G (Gurus Gross & Gundlach) have gotten hammered here as the Fed makes its adjustments of US Treasury security holdings. For reference, recall Macro Tourist‘s highlight of Martingale Macro’s observations about the Fed’s SOMA days.
We had been planning for a bounce in bonds since well before I was reminded of the SOMA schedule by a subscriber. That was because public sentiment had been stacked against bonds and commercial hedgers were stacked for bonds.
Enter the Fed with its month-end sales and you have a perfect setup. The usual dumb money counter-party in place ready to buy the move that has already happened as the Fed sells into it. Thanks Gurus! You are a couple helluva guys. How about next time you shut the fuck up and stay out of the media? No? Of course not.
So now QT makes another small step forward, Treasury bonds have blasted upward as the Continuum’s ™ ‘limiter’ holds once again…
…and global yields get dropped left and right.
I am going back to a more neutral stance on bonds now from the contrary bullish stance. But until the limiter breaks, it has not… Bueller? Broken.
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