Fear and Loathing in the US Bond Market

[] Today's market commentary from TradingPub is here! To view this email as a web page, go [here.]( To view this email as a web page, go [here.]( [] [] [] Fear and Loathing in the US Bond Market The bond market never lies. So, believe your eyes when I say that the U.S. is experiencing a maturity crisis… and deep concerns about the state of our long-term debt. This chart from Bloomberg tells you everything you need to know about why the S&P 500 has taken a bath over the last few weeks, and why we’re nowhere close to stability. [] The average par-weighted price of U.S. bonds is sitting at 86 cents on the dollar. This is the face of the challenge weighing on the mighty United States. And we’re only in the third inning. What Comes Ahead The U.S. experienced another downgrade to its long-term financial stability in March. The usual crowd crowed that “America has a money printer.” But we can’t take this seriously when this crowd has already let the mask slip: Just inflate away all the debt… As if that’s a sustainable practice. There’s a reason why nations around the world are trying to get away from the U.S. dollar. The so-called BRICS and the dozens of emerging markets worldwide got hooked on dollar-based debt in the early 1990s. With the U.S. dollar soaring, their local currencies are struggling to keep up. This is how you end up with sovereign wealth challenges. The problem is that the U.S. debt crisis creates an even more confounding challenge. Short-term debt in the three-month to two-year range yields much higher than longer-duration bonds. The problem for the Treasury is that it needs to roll over more than $7.5 trillion in short-term debt… all while financing what will probably be another $1.5 trillion to $2 trillion added to the deficit. The jump in the 10-year to around 5% to 5.25% may trick investors into longer-term conditions, where we’ll effectively run a $50 trillion deficit by 2032 with hundreds of trillions in other unfunded liabilities. (I guess economist Paul Krugman’s solution by that point would just be to create a $1 QUADRILLION coin and cover all of the debt). But the rest of those investors — people who were buying 10-year bonds back in the COVID-19 era — they’re stuck in an ugly situation. Like the banks that were struggling with duration bonds in March because their maturities were years out, countless investors are holding U.S. debt that is trading well under par. It’s an ugly scenario, and it could be something that breaks another large bank, a major fund, or even a foreign investment company (think Japanese insurance firms) that has long-held U.S. debt. The bigger question is… Who will buy this future debt? The American people? They’re tapped out. The Fed? The central bank is cutting its balance sheet — and will see another $500 billion roll off next year, according to projections… China’s largely out, as it’s trying to shore up its currency from cratering. And Japan’s central bank is driving domestic investors into the arms of their local bonds. Even the Saudis are cutting their holdings of U.S. debt. So, I ask… Who will be the buyer of last resort? My thesis goes that it will be the Fed. But not until the duration crisis wears out… not until the government shutdown is resolved… and likely not until we reach the beginning of the year. I expect the Fed’s balance sheet to go up — not down — over the next few years. We’ll watch if executives start trying to call the bottom in this market along the way. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] Unless You’ve Worked on Wall Street, You’d Never Know This Existed There’s an “invisible hand” that can [control where any stock is heading next.]( It doesn't show up on the balance sheet…or on a stock’s chart… It’s nowhere to be found when you look at the fundamentals… And it’s completely undetected by commonly used valuation metrics. Unless you're on the inside… working on Wall Street… or for one of the top firms… You’d never know it even exists. But once you can see this “invisible hand” for yourself… And how it can completely control a stock’s every move… [You’ll Never See the Market the Same Again]( [] _______________________________________________ [] Market Momentum is RED Stocks remain under pressure as yields rise and markets fret over rising oil prices. This was all entirely predictable and has been the subject of our analysis at [Tactical Wealth Investor](. Next week, I’ll provide a complete breakdown of events around the globe, and we’ll reveal our latest income pick for long-term, buy and hold investors. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] [] [] Fear and Loathing in the US Bond Market The bond market never lies. So, believe your eyes when I say that the U.S. is experiencing a maturity crisis… and deep concerns about the state of our long-term debt. This chart from Bloomberg tells you everything you need to know about why the S&P 500 has taken a bath over the last few weeks, and why we’re nowhere close to stability. [] The average par-weighted price of U.S. bonds is sitting at 86 cents on the dollar. This is the face of the challenge weighing on the mighty United States. And we’re only in the third inning. What Comes Ahead The U.S. experienced another downgrade to its long-term financial stability in March. The usual crowd crowed that “America has a money printer.” But we can’t take this seriously when this crowd has already let the mask slip: Just inflate away all the debt… As if that’s a sustainable practice. There’s a reason why nations around the world are trying to get away from the U.S. dollar. The so-called BRICS and the dozens of emerging markets worldwide got hooked on dollar-based debt in the early 1990s. With the U.S. dollar soaring, their local currencies are struggling to keep up. This is how you end up with sovereign wealth challenges. The problem is that the U.S. debt crisis creates an even more confounding challenge. Short-term debt in the three-month to two-year range yields much higher than longer-duration bonds. The problem for the Treasury is that it needs to roll over more than $7.5 trillion in short-term debt… all while financing what will probably be another $1.5 trillion to $2 trillion added to the deficit. The jump in the 10-year to around 5% to 5.25% may trick investors into longer-term conditions, where we’ll effectively run a $50 trillion deficit by 2032 with hundreds of trillions in other unfunded liabilities. (I guess economist Paul Krugman’s solution by that point would just be to create a $1 QUADRILLION coin and cover all of the debt). But the rest of those investors — people who were buying 10-year bonds back in the COVID-19 era — they’re stuck in an ugly situation. Like the banks that were struggling with duration bonds in March because their maturities were years out, countless investors are holding U.S. debt that is trading well under par. It’s an ugly scenario, and it could be something that breaks another large bank, a major fund, or even a foreign investment company (think Japanese insurance firms) that has long-held U.S. debt. The bigger question is… Who will buy this future debt? The American people? They’re tapped out. The Fed? The central bank is cutting its balance sheet — and will see another $500 billion roll off next year, according to projections… China’s largely out, as it’s trying to shore up its currency from cratering. And Japan’s central bank is driving domestic investors into the arms of their local bonds. Even the Saudis are cutting their holdings of U.S. debt. So, I ask… Who will be the buyer of last resort? My thesis goes that it will be the Fed. But not until the duration crisis wears out… not until the government shutdown is resolved… and likely not until we reach the beginning of the year. I expect the Fed’s balance sheet to go up — not down — over the next few years. We’ll watch if executives start trying to call the bottom in this market along the way. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] Unless You’ve Worked on Wall Street, You’d Never Know This Existed There’s an “invisible hand” that can [control where any stock is heading next.]( It doesn't show up on the balance sheet…or on a stock’s chart… It’s nowhere to be found when you look at the fundamentals… And it’s completely undetected by commonly used valuation metrics. Unless you're on the inside… working on Wall Street… or for one of the top firms… You’d never know it even exists. But once you can see this “invisible hand” for yourself… And how it can completely control a stock’s every move… [You’ll Never See the Market the Same Again]( [] _______________________________________________ [] Market Momentum is RED Stocks remain under pressure as yields rise and markets fret over rising oil prices. This was all entirely predictable and has been the subject of our analysis at [Tactical Wealth Investor](. Next week, I’ll provide a complete breakdown of events around the globe, and we’ll reveal our latest income pick for long-term, buy and hold investors. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. 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[Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States