Bond Market Crisis

[red viking]

Something very interesting happening here. Bond yields skyrocketing lately. People are dumping U.S. debt. I wonder if China is part of this. 

If not, they will join in eventually and make it much much worse if Trump continues to play around. 

People think we hold all the cards  but that's 100%  wrong. It's not 1950 anymore. 

 

 

[red viking]

Bond yields now up 0.21 and 5% just in one day. Something definitely going on here. 

[scourge165]

15 minutes ago, red viking said:

Bond yields now up 0.21 and 5% just in one day. Something definitely going on here. 

I just saw the 10 year was above 4.5 yesterday. That's a BIG problem as I think that was a driving force behind this. Trump wants it down to 2%. Though if people are bailing out...I don't know. I'm mostly just holding....hoping they can work out some deals and Countries like India and the UK hold off on hitting us back(and Japan, SK, etc...). 

[red viking]

10 minutes ago, scourge165 said:

I just saw the 10 year was above 4.5 yesterday. That's a BIG problem as I think that was a driving force behind this. Trump wants it down to 2%. Though if people are bailing out...I don't know. I'm mostly just holding....hoping they can work out some deals and Countries like India and the UK hold off on hitting us back(and Japan, SK, etc...). 

Very dumb move to take on the entire world at once. If the guy had a brain, he'd "divide and conquer." You want to start a trade war with China? OK, well just make sure you aren't doing it with the rest of the world at the same time. 

Yah, he may not care too much about the stock market, but you are right. I can guarantee he cares about this. 

[scourge165]

3 minutes ago, red viking said:

Very dumb move to take on the entire world at once. If the guy had a brain, he'd "divide and conquer." You want to start a trade war with China? OK, well just make sure you aren't doing it with the rest of the world at the same time. 

Yah, he may not care too much about the stock market, but you are right. I can guarantee he cares about this. 

I think he cares about the market, but...yes, it was. 

However, right now...the market is sky rocketing up like something big is happening. 

[red viking]

1 minute ago, scourge165 said:

I think he cares about the market, but...yes, it was. 

However, right now...the market is sky rocketing up like something big is happening. 

He read my post and listened to me. Seriously, I think he did. decided to just concentrate on fighting China, right after I posted that. 

[Wrestleknownothing]

The basis trade was pretty well blown up Thursday to Monday causing treasury yields to spike.

The basis trade involves buying treasuries and selling futures against them. Pension funds and long only managers like to get exposure to treasuries via the futures rather than buying the cash bond because it is more capital efficient for them. As a result of that demand treasury futures trade at a slight premium to cash bonds. So hedge funds step in and borrow money to buy the bonds so they can sell futures to the buyers who want them. This is a massively levered trade. 

They effectively manufacture treasury futures. 

When other markets are going to hell and a hedge fund needs to raise money they tend to do it in the most liquid, safest market, which visits the problem onto that market too (contagion). As a result big chunks of the basis trade got unwound over the last few days.

Add to that when we buy products from overseas a lot of those US dollars we spend get invested in treasuries. (We import goods and export financial products). If we aren't going to spend those dollars then the treasuries won't get bought. And the ones that are owned by foreigners tend to get sold. Trump hates this form of balance of trade.

So it was a double whammy.

Trump wants lower 10 year yields, and one theory of tariffs is that he is attempting to force Jerome Powell's hand to cut interest rates. No one thinks that is the only reason, or that Trump has coherent reasons, for tariffs, but that the tariffs had the opposite effect may go a long way to explaining the 90 day pause. And hopefully cause Trump to rethink (haha, that implies he thought in the first place) entering into The Dumbest Trade War In History.

[JimmySpeaks]

The plan. All. Along.   

[Wrestleknownothing]

5 minutes ago, JimmySpeaks said:

The plan. All. Along.   

Never the plan. I would say that Musk is now giving you a peak behind the curtain with his Navarro comments.

Trump does not understand what he is doing and he has surrounded himself with cabinet members who do not know what they are doing. Their only qualification is how deeply they kiss Trump's ass. As a result you get a TV pundit running the military and giving away attack plans to the media over unsecure, non-approved channels and a trade advisor who devises the dumbest possible equation (that he may have found by using ChatGPT?) to prosecute The Dumbest Trade War In History.

[JimmySpeaks]

4 minutes ago, Wrestleknownothing said:

Never the plan. I would say that Musk is now giving you a peak behind the curtain with his Navarro comments.

Trump does not understand what he is doing and he has surrounded himself with cabinet members who do not know what they are doing. Their only qualification is how deeply they kiss Trump's ass. As a result you get a TV pundit running the military and giving away attack plans to the media over unsecure, non-approved channels and a trade advisor who devises the dumbest possible equation (that he may have found by using ChatGPT?) to prosecute The Dumbest Trade War In History.

I’m glad you have an opinion.  Too bad Americans wanted this even though the sheeples didn’t. 

Edited April 9 by JimmySpeaks

[red viking]

25 minutes ago, JimmySpeaks said:

The plan. All. Along.   

He could crap his pants in the middle of a speech (not like he typically does inside his diapers but I'm talking about it leaking outside his diapers) and you would still think it was "part of the plan." 

Incredibly naive. 

Edited April 9 by red viking

[JimmySpeaks]

5 minutes ago, red viking said:

He could crap his pants in the middle of a speech (not like he typically does inside his diapers but I'm talking about it leaking outside his diapers) and you would still think it was "part of the plan." 

Incredibly naive. 

Coming from comrade RV I’ll take this as a badge of honor.  I’m on the side of anything that keeps wokeness, progressiveness and communism as far away from America as possible.   You created Trump and  It’s why he got elected. 
 

not me 

Edited April 9 by JimmySpeaks

[red viking]

Spiked to highest level in 1.5 months today. 

[Wrestleknownothing]

It is an interesting dynamic right now. Treasuries have always been the safehaven in risky times. Even to a paradoxical extent. When the risk was the US and treasuries being downgraded by ratings agencies, people sold risk assets and bought treasuries.

But now the risk is the capriciousness of the decision making by Trump, making holding treasuries as a reserve asset by foreign governments too risky.

Trump has a target for 10 year yields, but his own actions are making the target unattainable. Apparently it was the bond market that made him blink, not the stock market.

[red viking]

18 minutes ago, Wrestleknownothing said:

It is an interesting dynamic right now. Treasuries have always been the safehaven in risky times. Even to a paradoxical extent. When the risk was the US and treasuries being downgraded by ratings agencies, people sold risk assets and bought treasuries.

But now the risk is the capriciousness of the decision making by Trump, making holding treasuries as a reserve asset by foreign governments too risky.

Trump has a target for 10 year yields, but his own actions are making the target unattainable. Apparently it was the bond market that made him blink, not the stock market.

Yah. A lot of people don't realize that it's both unusual and a much bigger problem when the stock market is tanking, dollar tanking and bond yields skyrocketing (without any action by the fed) all at the same time. 

[ionel]

5 minutes ago, red viking said:

Yah. A lot of people don't realize that it's both unusual and a much bigger problem when the stock market is tanking, dollar tanking and bond yields skyrocketing (without any action by the fed) all at the same time. 

Not if you are short selling like rv.  

[JimmySpeaks]

15 minutes ago, ionel said:

Not if you are short selling like rv.  

He’s Short selling on the short bus 

[red viking]

1 minute ago, JimmySpeaks said:

He’s Short selling on the short bus 

I have no idea how you haven't been banned yet. 

[JimmySpeaks]

1 minute ago, red viking said:

I have no idea how you haven't been banned yet. 

Ummm you’re still here so I’m good. 

[red viking]

Bond market unraveling today. Investors losing faith in the US dollar. 

I can guarantee that this is making Trump  sweat. Much much bigger than the tanking stock market. 

Edited April 11 by red viking

[wrestlingguy]

2 hours ago, red viking said:

Bond market unraveling today. Investors losing faith in the US dollar. 

I can guarantee that this is making Trump  sweat. Much much bigger than the tanking stock market. 

 

19 hours ago, red viking said:

Yah. A lot of people don't realize that it's both unusual and a much bigger problem when the stock market is tanking, dollar tanking and bond yields skyrocketing (without any action by the fed) all at the same time. 

Which one is it? 

[JimmySpeaks]

1 minute ago, wrestlingguy said:

 

Which one is it? 

I think you just confused him…….. again 

[red viking]

2 minutes ago, wrestlingguy said:

 

Which one is it? 

Both. The fact that all of those are happening concurrently is highly unusual and bad AND the unraveling bond market is the worst of all of them. 

It's not complicated. VERY simple for both to be true at same time. 

[scourge165]

On 4/9/2025 at 1:49 PM, JimmySpeaks said:

The plan. All. Along.   

Jimmy! Are you kidding?!?

China just start dumping US debt and it just HAMMERED the bond market! Trump wanted rates at 2% and they're at 4.5% right now!

 

This was not the plan. This is 50B dollars more for the 10T he has to restructure coming due this year. If this was his plan ALL ALONG, it is without a doubt...the dumbest, most poorly executed plan in the History of Presidential Fiscal Policy.

 

This was an unmitigated disaster! China could keep dumping US debt and just...HAMMER the US further. 

 

Both sides need to work something out...but my god what a joke. Putting 20% tariffs on China and threatening the rest of the world, that...well, that would have been crazy, but alright. Putting 10% or 50% on Australia or countries we're strong allies with is...remarkably stupid. 

[scourge165]

17 hours ago, wrestlingguy said:

 

Which one is it? 

Dude...how do you not see it's all of them?

The one thing he set out to do, the FIRST priority, to "cut or a economic disaster," he's not doing. That actually got 50B dollars WORSE.

-Then on TOP of that, you add that he did that while CRIPPLING the markets and causing people to lose trillions, but without a doubt hurt the middle class the worst(those who have a retirement fund and maybe they have 200K-1M in it and they sold on the way down because they were afraid he wouldn't stop...because he said he wouldn't stop and it would go down another 20-30%...and now they triggered massive penalties, taxes and then they lost that vlaue when it went back up because they don't have the money to "be patient." 

 

 

Here's a simple answer.

Bond Market-Bigger deal to Trump and what he was trying to accomplish short term.

Stock Market-BIG deal because he did everything for no reason.

 

To use his analogy, he did the operation, it was terrible, the patient now has a colostomy bag, he's unable to walk, move...and THEN we found out the whole point for the surgery...well, surgery only made it worse. 

 

17 hours ago, JimmySpeaks said:

I think you just confused him…….. again

Jimmy, the one constant is you don't have a clue what is going on. Why the 10 year is important, why what happened with the Bond Market was a disaster.

 

I have had time to look into this, but...if you can get 4.5%...Trump did all of this for literally nothing.