Into the Gloaming

You have to ask yourself, "Why would they let it happen?" The EDZ16 again is the heaviest part of the strip, as Fed induced hallucinations of "hikes and normalization" filter back into the pricing. The contract has dropped 30 ticks in a month. The futures curve, after a slight bump, remains essentially flatlined (a medical term for DEAD). The Red/Gold (a 2/10 proxy) is 75, a shocking 20bp lower than the actual T curve. Yesterday, the Twitterati finally noticed Japanese bonds trade under US 2s !

It doesn't have to be this way. It could last into the first 100 days of the next Administration. The US is presented with an historical "green light" to do something reckless with its policies. We seem to be opting to spiral into the gloaming with the rest of the developed world. Its time to get out the paddles, stand clear and shock. These spreads need to explode. The Fed needs to shut up and go away.

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