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While the stock markets were crashed within the trade war, the US Treasury Secretary Scott Bessent, tried to calm down the seeds of fresszled last weekend. “401 (k) (cheeseing plan) have a majority of those called 60/40 … they are 5, 6 percent over the year,” It television has been declared.
Or, in English, Investment Managers, usually 40 percent of a portfolio, in fixed income, falling capital prices, it should be partially placed in the opposite directions, at least for financial textbooks.
. Last week, bond prices increased as seemingly capital due to increasing the descent fears. But this week has guest-shaped Among the signs of low quality demand in the treasury auction.
It is an unusual case as market analysts Larry McDonald Note: In the Exchange 2008, 2001, 1997 or 1987, bond prices increased. Indeed, this double stick was recently seen during the Covid-19 panic.
If bond prices continue to fall along with capital prices, he states at least three questions: can markets tolerate this pain? Will the federal reserve intervene as in 2020? And what is the bond market to sell Self?
We are not able to answer the first two questions for several days. However, there are many tips around the third issue.
One (open) possibility is macroeconomic: Investors are concerned about inflation due to tariffs. The other is, some investment funds are likely to throw the most liquid assets to get acquainted with margin calls.
But something else – more terrible – explanation is the eruption of this variability because Hedge funds have to open their words “Basic trade”. “Sometimes the odds sometimes, sometimes 100 times, sometimes as a” an arcane strategy “, as a” arcane strategy “, as a torsten slock Apollo Private capital group puts it.
In recent years, such traders exploded – even if it is on a scale that is difficult to follow. Indeed, the explosion is so marked Three of the best five sources Luxembourg, Cayman Islands and London – Hedge Foundation Centers for non-US treasury demand were centers.
This Car Recently (Gu) estimated that these trade were Worth 1TN, Bloomberg Analysis, Hedge Funds organized 7 percent of the treasures that appear more than the seller banks and a sharp increase. Slick, in turn, only $ 800 billion and (() says a significant part of a 2TN dollar in the broker balance. “
In both cases, because the bond markets fell, the businessman is unlikely to create a businessman, to create a similar whip effect one Seen in 2020. And this is the bad thing like the bad thing, the founder of the bridgewater Ray Galio Terrible warnings about the portable debt of America, the conversation on the Putative future standard risks is growing.
White house insists that it is ridiculous. However, the traders know that Trump has repeatedly defaulted its debt when there is a businessman. Some of the Wilder policy ideas floating around the White House include Putative change debt, or quasi is reconstructed. Once inconceivable scenlicity They are imagined – and precious.
Then there is an elephant in the bond room: the US-China Trade War, Beijing (the biggest treasure of the second largest treasures) is the risk of avoiding the dollar assets.
It has little evidence of what happened – yet. But Beijing transferred a surprising money this week: left renminbi Weakly with the dollar by increasing the perspective of currency wars. This makes it easier to imagine other scenarios. “Avoid the transition to a trade war in a financial war,” the FX study in Deutsche Bank wrote.
So a macro strategy, why Ed Yanken explained to customers The Trump’s team now plays with “liquid nitro” with treasures. Perhaps Bessent’s calming words can calm investors, or the Fed will interfere – or (hopefully) will reverse the reverse course in the tariffs or conclude a contract with Japan. However, it is correct that the Yargen likened to the same time; Would slip into a financial crisis.
