68.2 US Treasury Bond Futures Crossed Red Line Long Ago
———Part 2 Summary———
Open interest in US Treasury Long Bond futures have crossed the 800,000-line only a few times in the past quarter-century. Nothing ever good happened in markets or the world economy when that happened. Where are they today? Almost 1.2 million. Why, who and when?
But first, this from Eurodollar Enterprises! Friends, are you employed by the Ministry of Treasure? Do your political masters require foaming asset prices to placate the great unwashed? Are you unsure how to balance maniacal froth with sustainable momentum? Then a box of Bath Suds from Eurodollar Enterprises is for you!
Yes, practice blowing bubbles in the gurgling luxury of your free-standing clawfoot tub. Find the perfect mix between liquidity and hot air with the capital markets foam formulation. Our line of bubble brews include: currencies, commodities, cryptos and collectibles. Blow them all! Orders received today will come with a fussy central banker – typically retailing for the price of hedge fund general partner – absolutely free! Simulate the political arena trying to blow it in the presence of an erratic technocrat. Don’t blow it! Blow it, with Bath Suds. New! From Eurodollar Enterprises. (Central banker swimsuit not included.)
———Ep 68.2 Topics———
01:31 U.S. Treasury Bond futures traded on the CME have remaining term of 15 to 25 years
02:06 Open interest is the number of outstanding derivative contracts (i.e. not yet settled)
02:26 When OI crosses 800,000 contracts in UST Bond futures bad things seem to happen
04:40 What does the hedge-fund US Treasury cash-futures basis trade have to do with 800,000?
06:13 The rise in open-interest signals that money dealers are likely constrained
07:51 Would a reduction in OI signal that money dealer constraints have been lifted?
09:34 What is the argument for “too many Treasuries”?
13:15 Primary Dealer Net Position US Treasury data suggests dealers need safe, liquid assets
14:49 Final concluding, summarizing thoughts by Jeff.
———Ep 68.2 References———
The Warehouse Gap Does Much To Fill In Why There Were Never Too Many Treasuries: https://bit.ly/332LpL5
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7
Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski, who likes long bonds. Art by the nice version of Gordon Ramsey, David Parkins. Podcast intro/outro is “Pa Na Ma” by Giants’ Nest at Epidemic Sound.