{"id":50242,"date":"2019-08-17T08:00:23","date_gmt":"2019-08-17T12:00:23","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=50242"},"modified":"2019-08-16T17:03:48","modified_gmt":"2019-08-16T21:03:48","slug":"when-the-bond-bubble-blows-up","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2019\/08\/when-the-bond-bubble-blows-up\/","title":{"rendered":"When The Bond Bubble Blows Up"},"content":{"rendered":"

Amazing isn\u2019t it? It was only back in H2 2018 when everybody but you (because you are as smart as I think you are or because you read\u00a0NFTRH<\/a>\u00a0or\u00a0nftrh.com<\/a>) and I was unbelievably\u00a0<\/a>bearish about\u00a0the\u00a0TREASURY BOND BEAR MARKET!!!<\/strong><\/em><\/span><\/p>\n

Today\u2026 not so much. The herd is absolutely pile driving bonds right now.<\/p>\n

\"tlt<\/a><\/p>\n

I know this all too well because while my SHY (cash equiv.) position is doing well it\u2019s not anything like the above, and is basically \u2013 given relative position sizes \u2013 offsetting a position in this, which I am still holding with all the stubbornness of a pissed off contrarian.<\/p>\n

\"tbt\"<\/a><\/p>\n

The two positions are part of my at least temporarily interrupted yield curve steepener. Hilariously the spread is up almost 500% today and just barely not inverted.<\/p>\n

\"yield<\/a>\"yield<\/a><\/p>\n

And so the Continuum\u00a0continues<\/em>\u00a0downward.<\/p>\n

\"tyx\"<\/a><\/p>\n

Here, let\u2019s magnify it so see what it actually looks like with respect to recent history.<\/p>\n

\"tyx\"<\/a><\/p>\n

While I am not a bond expert I do know that the 30yr US Treasury bond is the debt-riddled Uncle Sam\u2019s promise to pay and in mass herding into the long bond investors are seeking the safety of Unc\u2019s good faith and promises. No seriously, this is the last time they are going to conspire to break the bank and spend well beyond their means.<\/p>\n

Spend spend spend, Bush, Obama, Trump, Congress always\u2026 The chart above mentions the Fiscal Cliff, and I distinctly remember laughing at the hissy fit the markets were having with all the hand wringing about \u2018will they or won\u2019t they?\u2019 continue to spend off the charts. Oh yes, right. They. Always. Spend.<\/p>\n

Anyway, you\u2019re buying bonds right now? You\u2019re funding a spend-o-holic that just keeps adding layers of excess, talks some talk about fiscal restraint and then adds more layers\u2026 routinely and forever, until the thing rolls over, wheezes and exhausts itself\u2026 or until bond yields rebel.<\/p>\n

Speaking of which, when \u2013 and it could still be a wait \u2013 the bond revulsion materializes, the herds clustering in bonds will be the food, the dupes funding the system yet again. A knock-on effect for me personally is that while the stock market is fairly bearish at the moment and could get more so (did you see FOX and CNN last night babbling on and on about the inverted yield curve as the cause of the market correction and its predictive powers about recessions?) this bond bubble makes me suspect of a hardened bear view on stocks.<\/p>\n

If this is finally the great deflation, that\u2019ll be one thing. But if it\u2019s yet another inflationary operation in the making the gun is loading for yet another cycle. The Continuum has broken below all-time lows. Ooh, that\u2019s scary. So is it real (deflationary crash) or Memorex (a shakeout of the inflationists before yields tear ass in the other direction with the force of a thundering herd breaking out of the slaughterhouse pen)?<\/p>\n

This feedlot of bond investors is so massive you need to take an aerial view.<\/p>\n

\"\"<\/a><\/p>\n

Check back to see my next post!<\/p>\n

Best,
\nGary Tanashian
\nnftrh.com<\/a><\/p>\n

Subscribe to\u00a0NFTRH Pre<\/strong>mium<\/strong><\/a>\u00a0(monthly at USD $33.50<\/a>\u00a0or a 14% discounted\u00a0yearly at USD $345.00<\/a>) for an in-depth\u00a0weekly market report<\/strong>,\u00a0interim market updates<\/strong>\u00a0and\u00a0NFTRH+ chart and trade setup ideas<\/strong>, all archived\/posted at the site and delivered to your inbox. [Note: the subscription rate to the value-priced NFTRH service will increase near summer\u2019s end, so if you are considering a subscription don\u2019t wait to lock in the current rate]<\/strong><\/em><\/span><\/p>\n

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Amazing isn\u2019t it? It was only back in H2 2018 when everybody but you (because you are as smart as I think you are or because you read\u00a0NFTRH\u00a0or\u00a0nftrh.com) and I was unbelievably\u00a0bearish about\u00a0the\u00a0TREASURY BOND BEAR MARKET!!! Today\u2026 not so much. The herd is absolutely pile driving bonds right now. I know this all too well […]<\/p>\n","protected":false},"author":31,"featured_media":50245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[9252,10738,8523,4273,9004,9247],"class_list":["post-50242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ino-com-contributors","tag-30-year-bond","tag-30-year-treasury-yield","tag-bond-bubble","tag-gary-tanashian","tag-u-s-bond-market","tag-u-s-bonds"],"yoast_head":"\nWhen The Bond Bubble Blows Up - INO.com Trader's Blog<\/title>\n<meta name=\"description\" content=\"You\u2019re buying bonds right now? 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