Another day...another weak story on the Treasury "Crash Up" of Oct. The promulgated meme is that "There was record volume so everything is fine." This is an argument only the head of the CME Group could love, oh wait , HE's THE ONE THAT MADE IT !
That the Ultra Bond went up 9 points on roughly 165 contracts is never mentioned. Abnormally large volume after the crash up is to be expected. The real question is: Why do exchange officials and regulators persist in selling this false narrative? IF, they truly believe this falsehood, we are in bigger trouble than thought because the leaders and officials of the industry are ignorant.
Everything is NOT ok in the trading of US Treasury securities and futures. The reasons are a mulligatawny of LSAP, regulatory change, electronic platforms and ZIRP. Rates fell in the Oct seizure but the next disruption could be in the other direction. We got a glimpse of the carnage that could cause in the Taper Tantrum. In the meantime, people will keep telling you there's nothing to see, move along, everything is fine. It reminds me of the Mayor in Jaws: They're not going to look inside and have the little Kitner boy spill all over the dock.