Sunday, January 22, 2017
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Treasuries Besieged by ‘Idiot Money’: Record Shorts in Treasuries Paint an Ominous Picture for Bond Bears


If you recall, in December of 2015, I went long treasuries, due to my belief that negative interest rates would wreak havoc across the investment landscape — bring with it a deflationary vortex that would consume all whole — especially equity holders. For the better part of 2016, this was the single best trade to be in — and I had it before anyone deemed it to be fashionable.

Then the elections came and a gigantic Trump induced squeeze commenced — helping rout bonds and buoy equities in record fashion. Looking back on that rally, it was a fucking month — literally nothing in the big scheme of things. Should bonds rally again, recapturing some of its former glory, no one will remember the faux inflation days of November-January — post Hillary annihilation.

Looking at the bond trade, it’s ripe for a reversion from the mean. After all, the most reprehensible people around, pavement apes and the like, are short bonds. These are the ‘Fast Money’ people — the same lads who bought mortgage bonds in 2007 and dot com hand grenades in the spring of 2000.


The amount of speculators’ bearish, or short, positions in
10-year Treasury futures exceeded bullish, or long, positions by
394,689 contracts on Jan. 10, according to the CFTC’s latest
Commitments of Traders data.

A week earlier, speculators held 344,931 net short positions
in 10-year T-note futures.

Net shorts in five-year T-note futures and Eurodollar
futures among speculators also climbed to record highs in the
latest week, while speculative T-bond net shorts rose to their
highest level since March 2012, according to CFTC data.

Net shorts in federal funds futures among speculators rose
to their highest since August 2015.

The rise in net shorts among these futures contracts
suggested this group of market participants believes bond prices
will resume their fall despite their rebound since mid-December.

Juxtaposing short data with actual yield action, proves, in fact, that the shorts are literally pavement apes — idiots devoid of reason — slaves to the base instincts that require zero thinking.



Yields on the 5 year treasury have doubled since our glorious leader, Donald J. Trump seized power, to 1.94%. Short contracts now outstrip longs by a record 1.1 million — making this Tower of Pisa trade indelibly lopsided.

In the end, “real money always wins,” said Tom di Galoma, the managing director of government trading and strategy at Seaport Global Holdings. “Speculators tend to get taken out. We’ve seen this occur several times in the last 10 to 15 years, where everybody thinks rates are too low.”

A shift back into Treasuries may already be starting. Fixed-income managers who oversee a combined $225 billion held 24.7 percent of their assets in U.S. government debt in the week through Jan. 17, according to Stone & McCarthy Research Associates client survey. That’s higher than the average of 24.2 percent in 2016.

However, signs of even a slightly more aggressive Fed can still make the bearish trades worthwhile. Last week, Fed Chair Janet Yellen said rates could rise “a few times a year” from now through 2019. That caused five-year yields to soar by the most since the central bank raised rates Dec. 14.

In the past, the Fed has been notorious for being too confident about growth and the pace of rate increases. Jason Evans, co-founder of hedge fund NineAlpha Capital LP and the former head of U.S. government bond trading at Deutsche Bank AG, believes this time the central bank will stick to its projections and lift rates three times in 2017.

“It’s understandable that there’s going to be a little ebb and flow,” said Evans, who said his firm put on short positions this month. Even so, “we’ll have higher yields later this year. We at least know the direction we’re heading in.”

The expectations for the Federal Reserve is for 3 hikes in 2017, then more in 2018. However, that hope is predicated on economic growth expansion — which cannot happen without the cooperation from a Congress who has only, at this time, approved 2 of Trump’s 21 cabinet appointees and appear to be ready to fight him, tooth and nail, every step of the way. Couple that with the fact that the dollar is at 14 year highs and the cost to borrow funds has spiked, dramatically, since election day — making Trump’s fiscal dreams increasingly difficult to attain.

I am long zeroes, via $ZROZ.


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Good News: FOXCONN Slave Factories Are Coming to America


If this is China’s way in trying to placate President Trump, with slave factory jobs, taking the place of American manufacturers who hold themselves to higher standards, they’re in for a rude awaking.

NIKKEI is reporting that FOXCONN, home of the factory suicide net, is interested in investing $7b in a plant that will make Apple products, which will create 30-50k jobs.

Source: Bloomberg

Foxconn Technology Group Chairman Terry Gou told reporters in Taipei the company is considering a joint investment with Apple Inc. for a display manufacturing facility in the U.S., according to a report by the Nikkei Asian Review.

The facility would cost more than $7 billion and may create an eventual 30,000 to 50,000 jobs, the publication cited Gou as saying. The rising demand for larger displays makes domestic U.S. production a better solution than shipping from China and “Apple is willing to invest in the facility together because they need the (panels) as well,” he said. Apple didn’t immediately respond Sunday to a Bloomberg News request for comment.

Foxconn, also known as Hon Hai Precision Industry Co., is also planning a new molding facility in the U.S., possibly in Pennsylvania, Nikkei reported. Separately, Smart Technologies, a Foxconn-controlled interactive display company in Canada, may move to the U.S. in light of President Donald Trump’s indication he may seek to alter terms of the North American Free Trade Agreement, Nikkei reported Gou as saying.

Gou said he sees American protectionism as “inevitable” while questioning whether U.S. consumers will be willing to pay much higher prices for equipment of equal quality, according to Nikkei. The publication said Gou spoke to reporters after Foxconn’s holiday party in the Nankang district of Taipei.

We need these jobs like we need a hole in the head. Nice try Tim Cook.

Try again.

As for FOXCONN’s management of their employees: it is reprehensible and it hearkens back to the Victorian era, before we gave a shit about human life.


In years past, these workers said, Foxconn would make liberal use of overtime to ensure that assembly lines were fully staffed. But they say Foxconn has now shifted tactics in some units, and is allowing only workers who can recruit another worker to be eligible for overtime. They say this creates hardships for those who can’t find recruits, as without overtime wages are barely enough to live on.

“This was not that much a problem in previous years, when lots of people wanted to work at Foxconn,” said one Foxconn employee who worked in recruitment. “But everyone knows now that the work doesn’t pay. It is hard to recruit your friends.”

Without overtime pay, Foxconn assembly line workers take home around 1,400 yuan ($211) a month after deductions for expenses including food and housing, workers said. Overtime hours can double that, but even then pay is less than the 5,000 yuan or more that they earned a few years ago during the iPhone’s boom, they say.

Workers said that among their colleagues who can’t convince a friend to join, it has become common to pay a stranger 200 yuan to work temporarily in order to qualify for overtime.

“It is a pressure for workers, especially those with families,” said a 26-year-old worker surnamed Zhao. “If you can’t get overtime hours, you barely earn anything.”

Since 2010, there have been at least 25 suicides at FOXCONN. But as you could imagine in China’s state run media, many have not been reported. That number is low.

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Trump to Renegotiate NAFTA with Mexico and Canada


The days of the American homeowner competing against the Mexican guy living in a cardboard shack made from garbage is coming to an end — God willing. While no one deserves to live in cardboard shacks made from garbage, it is not the burden of the American people to uplift the lifestyles of the Mexican people. If Mexico is unable to do that, they should permit our armies to take control of their cities and properly build their economies the way Alexander Hamilton intended.

source: Reuters/Bloomberg

U.S. President Donald Trump said on Sunday he plans talks soon with the leaders of Canada and Mexico to begin renegotiating the North American Free Trade Agreement.

“We will be starting negotiations having to do with NAFTA,” Trump said at a swearing-in ceremony for his top White House advisers. “We are going to start renegotiating on NAFTA, on immigration and on security at the border.”

Trump pledged during his presidential campaign that if elected he would renegotiate the NAFTA trade pact to provide more favorable terms to the United States.

NAFTA, which took effect in 1994, and other trade deals became lightning rods for voter anger in the U.S. industrial heartland states that swept Trump to power this month.

Trump has said little about what improvements he wants, apart from halting the migration of U.S. factories and jobs to Mexico.
Since winning the Nov. 8 election, Trump has singled out and threatened to impose tariffs on U.S. companies that move any production to Mexico.

He has also intends to build a wall along the U.S. southern border to deter illegal immigration and insisted that Mexico will pay for it.

“We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength,” Trump said in Friday’s inaugural address.

This, of course, is bound to have massive ramifications on U.S. equity markets — which have done nothing but ignore Trump and the seriousness of his massive policy changes. For those of you who are too young to remember, there was once a man named Ross Perot (Presidential run 1992) who warned us about NAFTA and how it wreak havoc across the American industrial landscape.

Here is an article published by the NY Times in 2003, after 10 years of NAFTA.

The pain, he said, is concentrated in places like the Midwest, where manufacturing jobs have been lost to Mexico and Canada, and now to China. ”Nafta-related job loss and lower income may be small, but the echo is very large because of all the other jobs lost to globalization,” he said. ”Nafta is the symbol for all of that pain.”

”It has definitely created export-related job growth,” said Bill Richardson, the governor of New Mexico. As the Democratic whip, he helped pushed through passage of Nafta in the House.

”On the whole Nafta’s been a plus, but still, with a lot of alarmingly bad follow-up on commitments made on the border,” he said. Promises to protect workers’ rights and the environment have ”failed alarmingly.” So have pledges to close the economic gap between the United States and Mexico.

”The whole idea that Nafta would create jobs on the Mexican side and thus deter immigration has just been dead wrong,” he said. ”That was oversold.”

”We’re the losers,” said Bonnie Long, one of at least half a million American manufacturing workers who lost their jobs due to Nafta, despite the surge in trade. ”We lost our health care, our living wages. The winners are the corporate executives who don’t even live here and can locate their factories wherever they find the cheapest labor.”

Chester F. Dobis, speaker pro tem of the Indiana House of Representatives, held four meetings this year around the state to gauge feelings toward free trade. Mr. Dobis, a Democrat from Merrillville, said he had thought the only problems would be in his own district, a steel-producing region.

”Boy, was I wrong,” he said. ”These trade pacts have had a devastating effect on every part of the state. The companies deserted Indiana for Mexico a couple of years ago and now they’re heading for China.”

The warning signs were there and evident. Our politicians knew, but did not care enough to do anything about it.

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Chuck Todd Melts Down in Contemptuous Interview with Kelly Ann Conway


Chuck was given the ‘Large Marge‘ treatment, then sent on his way — after robotically repeating the same question over and over and over again. Chuck wanted to know why Sean Spicer LIED to the American people about the inaugural crowd size. It was such an important question, he felt, quite frankly, it deserved 15 separate questions over a period of 13 minutes. It’s almost as if George Soros himself had hacked into Chuck Todd’s little brain to program him to only have one thing to ask Kelly Ann.

After Conway answered the question, for the 10th time, he asked it again. This went on during the whole interview, exposing his hard biases against Trump — which was used by Conway in a public admonishment so embarrassing and humiliating, Chuck might as well sign up for penis removal ‘treatment’, in order to better fit in with his fierce and zesty female cohorts in the media.

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In Speech to the CIA, Trump Offers to Build Them a Room Without Columns: ‘Do You Understand That?’


At the end of Trump’s speech to a room filled with 400 employees of the CIA, Trump said, rather cryptically, that maybe he’d build them a bigger room ‘by someone who knows how to build and we won’t have columns, do you understand that?’

Here is the full speech.

For those of you who are fucking retards and haven’t the slightest clue what that could mean, I suggest you read up on the fifth column theories — which are essentially the existence of a shadow government.

A fifth column is any group of people who undermine a larger group—such as a nation or a besieged city—from within, usually in favor of an enemy group or nation. The activities of a fifth column can be overt or clandestine. Forces gathered in secret can mobilize openly to assist an external attack. This term is also extended to organized actions by military personnel. Clandestine fifth column activities can involve acts of sabotage, disinformation, or espionage executed within defense lines by secret sympathizers with an external force.

Indeed. A new room, built by a capable architect, without columns, sounds awfully good to me.

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The Election is Officially Over; Go Drink a Beer


America is delving into barbarism. The rise of the social justice left is just about the dumbest movement since cavemen said ‘the wheel would never work.’

I see it in my kids’ schools first hand. The sensitivity by school administrators to create a ‘bully free environment’, one that eschews gender inequality and all of the lovely trimmings that are part and parcel of the absurdity of the social justice movement, isn’t working. By shining a light on the differences of others, the kids are using that to mock and ridicule others. The gender neutral bathroom in their school is incessantly laughed at and used as a punchline for jokes by the children — who, by the way, are the byproduct of liberal parents (my neighborhood is mostly liberal).

You cannot force people to become enlightened. You can, however, program people to believe in certain ideals. However, that isn’t exactly the best way to evolve the human mind, is it? Unless of course you think it’s okay with government mind controlling the masses with their approved forms of propaganda, resources could be better spent on helping the kids build life skills.

A few things to look forward to in the markets, now that Trump is President.

1. China, China, China. What will become of it?

2. EPA will be shredded. This is great news for miners.

3. Lower taxes.

4. Fuck off Dodd-Frank. Goldman is going to be great again.

5. Somehow he will find a way to fuck with Amazon’s monopoly.

6. Trade wars.

7. The Wall.

8. Make fracking great again.

8. Big Oil.

Right away, the easiest places to position are the places he has direct control, without needing approval from Congress. To that end, banks and miners should continue to enjoy Trumpism the most. Also, we’ve never had such a big oil friendly administration — ever. Expect oil prices to firm and both deep water drilling and horizontal fracking to commence on the largest scale ever.

Some quick ideas include $GS, $NAK, $UEC, $RIG, $FTK and maybe $GBX.

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National Park Service BTFO: Cucked Agency Ordered to Cease Using Twitter After Mocking Trump Inauguration


Victim #1: National Park Service

Reason: For being democratic shills on Twitter

Cause of Death: Fucking with the God Emperor on his day of ascension

I can hear the cries of fascism from the social justice warriors of America now. By god, Trump ordered the assholes from the NPS to cease using twitter after the agency retweeted a picture comparing Obama’s crowd to his.

Guess what? In the real world, when you fuck with the boss, there are consequences. The NPS is supposed to be an apolitical agency. Since they’re too incompetent to know that, I surmise the incoming Trump administration would like to make some personnel changes before letting them back into Twitter.

After Retweeting this picture, the left wing media went apeshit with joy.

Now, not so much. You’re fucking fired.

Trump admin to the NPS following the twitter incident.


We have received direction from the Department through [the Washington Support Office] that directs all [Department of Interior] bureaus to immediately cease use of government Twitter accounts until further notice.

PWR parks that use Twitter as part of their crisis communications plans need to alter their contingency plans to accommodate this requirement. Please ensure all scheduled posts are deleted and automated cross-platform social media connections to your twitter accounts are severed. The expectation is that there will be absolutely no posts to Twitter.

In summary, this Twitter stand down means we will cease use of Twitter immediately. However, there is no need to suspend or delete government accounts until directed.?

This does not affect use of other approved social media platforms. We expect further guidance to come next week and we will share accordingly.

Thanks for your help!

Here are the rules for using social media by the NPS. Clearly they violated them and need to be greatly punished.



These decadent cuckolds are messing with an angry nation. A purge is coming.

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Wall Street Celebrates the Inauguration of Donald J. Trump with Exuberance


Markets advanced 94 points today, a stark difference from when Obama was first sworn into office and the market got decapitated for 4% of its worth.

Breadth was around 65%, with the majority of gains found in shippers, gold, tankers, silver and regional banks.

There are a ton of EPA plays out there, like $NAK, worth exploring and we’ll get into that as the weeks progress.

With oil prices firming and environmental restrictions abating, we could be entering a golden age of oil exploration — including fracking and deep water drilling.

Two plays off the top of my head, both which are dear to me, are $FTK and $RIG.

Let’s not forget nuclear energy, something I am adamant about for the next 4 years. My favorite plays there are $CCJ, $UEC and $URG.

Lastly, come check out Exodus, free through Sunday. You can even spy on my GARP index, my personal portfolio of shitty stocks, and the wide sundry of tools that make the platform magnificent.

I’m just about Trump’d out. I’ve spent all of my emotional nationalistic pride these past few months and truly hope for a period of calmness — permitting me to focus my frantic energies on finance related matters.

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