May

13

A famous fixed income trader alerted the public via social media in somewhat existential terms that he was bearish on bonds stating several points after the peak of 1 week ago that the bull market was no longer intact. It elicited this thought from a old speculator. It is surprising to see someone who presumably holds many hundreds of billions of dollars long in a portfolio reveal such a thing. A big speculator I knew well often discusses his views on the market and the world state. And while he would never buy before a bullish pronouncement, he certainly would not sell. That would be unfair. And while insiders in general don't always buy before good news, they are often loathe to sell before good news is announced. Thus the surprise. This is human nature. In any case it elicited the thought "never ask a barber if you need a haircut".

Alex Castaldo writes: 

Some old timers I know are talking about how this reminds them of the day Henry Kaufman and Albert M. Wojnilower turned "bullish" on bonds. Probably there are not many on the SPEC_LIST who remember those days…

Victor Niederhoffer replies:

One wondered that day whether the houses that they worked for became long before the 4 point rise at the 9 am announcement. And one wonders whether the upside down man alerted his colleagues with the 2 trillion position of his turn to the bearish side before the tweet. One noticed a 1 1/2 point drop on the day following the refunding of 30 years before the announcement, a greatest decline ever. My former friend the large speculator turned from bearish to bullish that day as now "the great Henry had changed the playing field and we're in a bull market". His change was very sagacious as the bonds went up about 10 or 20 points the next 6 months. I must confess that I did not participate in that move as I felt that I had to go with my numbers.

anonymous writes:

Apropos the recent social media expressions about bonds, could this be like a paranoid man who fears his wife is cheating on him? He subconsciously wants to catch her in the act so he can finally know that it is over. 


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