This is the yield of 30 Years US Bonds.... You will see different handles this year... like 5, 6 ... maybe 7.. If you had been following me at least for 6 months, you know I had been very consistent on my call on bonds... I spent 30 years in US rates... I can use my observation skills and pattern recognition to make calls on other assets... but US rates had been my bread and butter unlike others for a very long time. Now I will explain why I was so determined about the direction of long end rates.... It is actually mostly about the worst Treasury Secretary US ever had... #Bessent... He believes he is a hot shot macro trader... he is neither macro, nor trader... he was an execution monkey for Soros and later failed hedge fund manager. Catastrophies happen when ego is much larger than the talent... esepecially if one drinks his own cool-aid... which Bessent served #Trump but also drank himself. In trading, there is something called fulcrum... for the entire leverage... it helps the rest to float or go up... u never touch the fulcrum, u don't goose it up to push everything up. Bond market had been the fulcrum of the system after European Integration moved a lot of capital from USD domain and replaced with China dollars... however, China did not fund the eurodollars... instead bought US Treasuries... that's why Libor blew up... Since 2017, China started to get out of US Treasuries as well and now has half of them they used to have... you can see that the dynamics that played betweem 2000-2007 that blew up Libor are at play since 2017 for US Treasury market.... Before talking about what will happen now... let's see why US Treasuries had been the fulcrum for the rest of the markets.... You see that rest of the world, especially China got developed so well last 20 years... they are better than USA in nearly every tecnology... but US stock market is valued more than all markets combined. How? US System developed by NSA since Feb 2009 depends on financial repression. You live with 8% inflation, but told it is 3%... and bonds yield 5%... that means any large corporation can borrow at -2% to -3%... and use that to buyback their shares... EPS always better than expected. This system relied on lies from BLS for CPI and a bond market... If you are a trader, you never fck with this system... but Bessent did and you will see the results... Bessent decided to lower the long end and mortgage rates when economy was hot because we are running over $2 Trillions in deficits 6 years in a row with very wrong rates... He told his scvm friends to buy mortgage bonds to stuff Freddie and Fannie... these svms bought without hedging, so vol and long end got lower and lower.... In his simple mind, he thought he was helping Trump to win in midterms with lower rates... lower mortgage rates... when #IranWar spiked #OIL prices, he panicked and started to manipulate it... that delayed it but not changed the course. Now he is sitting exactly how #FederalReserve was sitting like a duck on September 2007..... In the next 6 months, you will see how a Treasury Market blows up... since Trump is surrounded by charlatans and clowns, they will not be able to do anything to stop it. Save this post and see how it works....you never touch the fulcrum... but Bessent is not a trader.

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