Looks like my scenario is playing out, might have Bubble popping potential at this point. The funds are in touble with their long Treasury, ED bets. The USD rally is pretty feeble so far considering the event though, probably tells us something.:
Message 20706873
Right now the funds are as long FX (300,873)and Gold (208,312)as I've ever seen them. They are also very offside long the Eurodollar and 5 year. Take that bit of information and combine that with the calendar coming up, and you have the potential for some fireworks, and much of it will be MoP silly season phony(*) (I typically fail to pick the exact causation event in advance, it just "happens", often with something unimportant to my eyes) fireworks no doubt. For my money, at least for more high beta leverages trades (futures, Amex listed PM juniors that I use, etc), I want to be much lighter in my positions right now. Philosophically I could never go short hard real money, but I might (have so far gingerly) go short the five year, IEF or EDs.
10/2 year spread closes to 140 bps, making leveraged "banking" tougher. Agency spreads widen 2 bps.
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