They’re buying treasuries today like “they” are expecting a crash next week…given all the “great news”, it does seem strange…what with the Dow Global Index up a huge 46 pts-I’ll probably go home today with a 100 VXX Dec 20th $20 calls [for 10 cents] just in case…even though stocks have a foundational bid under them for the next 10yrs…O, yeah, and gold had caught a bid, too.
https://futures.tradingcharts.com/marketquotes/ZB.html
This means that by mid-January, the Fed’s balance sheet will surpass its all time high of $4.5 trillion!
Is Zoltan’s Market Doomsday Imminent? Here Are The Two Things To Watch
In the aftermath of Zoltan Pozsar’s stunning “doomsday” report about an upcoming crisis in the repo market, which we discussed extensively yesterday, and which predicted that the Fed may “lose control of overnight rates” leading to a vicious dislocation in repos coupled with a paralysis in the FX swap market, many traders who (pretend to) understand the implications of what the former Fed strategist said, have quietly hunkered down and are looking carefully for sings that Pozsar is correct, a worst case scenario that could then lead to a spike in Treasury yields, a forced deleveraging of hedge funds, and a plunge in equities. In short: a stock market apocalypse.