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Stock Market Today: Dow, S&P Live Updates for November 28 - Bloomberg

The most-active investors in the Treasury market are as bullish Bloomberg Terminal as they’ve ever been, according to a weekly survey conducted by JPMorgan Chase & Co. since 1991. JPMorgan’s Treasury client survey for the week ended Nov. 27 found that 78% of active clients were positioned long relative to their benchmark, up from 56% the previous week. None of them were positioned short for a second straight week, for a 78% net long position that was the biggest in the history of the survey. The remaining respondents were neutral.

Chartbook 238: Making & remaking the most important market in the world. Or why everyone should read Menand and Younger on Treasuries.

American public finance has long been closely intertwined with the American monetary framework and that deep and liquid Treasury markets are, in large part, a legal phenomenon. Treasury market liquidity, in other words, did not arise organically as a product primarily of private ordering. Instead, it was actively constructed by government officials. The high degree of convertibility between Treasury securities and cash—the market’s “liquidity”—depends upon entities that can create new, money-like claims to buy Treasuries. Sometimes the government’s central bank has issued these claims directly, as in March 2020; other times these claims were issued by central bank-backed instrumentalities, such as banks and select broker-dealers.

10-Year Treasuries Are a ‘Screaming Buy’ as Fed Shows Credibility, BMO Says - Bloomberg

Lyngen sees a 3% yield on 10-year Treasuries sometime in 2024’s first half. “But we can easily close in a range of 3.5 to 3.75 this year,” he said. Real rates as measured by the spread between 10-year Treasuries and their inflation-protected peers should be in a range of 1.65% to 2.15%, “well within what the Fed wants to see,” Lyngen said.

Goodbye to the Bull Market for US Treasury Bonds - Bloomberg

Second, the US government’s fiscal health keeps deteriorating: Last month, the Congressional Budget Office raised its estimate of this year’s federal budget deficit to $1.7 trillion from $1.5 trillion, and no improvement is likely anytime soon given the political deadlock in Washington. The outlook will probably deteriorate further as higher interest rates drive up debt service costs and retiring baby boomers push up Medicare and Social Security expenditures. Larger deficits push up r*, and add to the bond term premium by increasing the risk of long-term lending to the US government.

Bond Calculators

Bond Calculators

Note to the Federal Reserve: Don’t Panic About Inflation | The New Yorker

The details of the inflation report provide some evidence to back up these arguments, but also some evidence that is less supportive. The price of medical services rose by 0.6 per cent last month, the cost of domestic services (such as housecleaning) rose by 0.9 per cent, and the cost of haircuts and other personal-care services jumped by 1.2 per cent. These were significant rises. However, taking the services sector over all (less energy services), prices jumped by 0.4 per cent in January, compared with 0.3 per cent in December, and 0.4 per cent in October. That doesn’t look like a sudden takeoff.

‘Confusing Time’ for Managers Weighing Stock Bubble, Page Says - Bloomberg

If I look at the price-earnings ratio on the S&P 500, it’s in the 99th percentile compared to the last 30 years. But if you think stocks are expensive, have you looked at bonds recently? And if you compare the valuation of stocks -- that PE ratio, and you can invert it and look at the yield, which makes an easier comparison -- with bond yields and in particular real rates -- the yield you get on bonds after inflation -- then you get to the conclusion that it’s in the bottom 1%. So stocks are as cheap as they’ve ever been.

A living artifact from the Dutch Golden Age: Yale’s 367-year-old water bond still pays interest | YaleNews

According the water authority, Yale’s bond is one of five known to exist. The bonds were issued by the Hoogheemraadschap Lekdijk Bovendams, a water board composed of landowners and leading citizens that managed dikes, canals, and a 20-mile stretch of the lower Rhine in Holland called the Lek. (Stichtse Rijnlanden is a successor organization to Lekdijk Bovendams.) Yale’s bond, written on goatskin, was issued on May 15, 1648 to Mr. Niclaes de Meijer for the “sum of 1,000 Carolus Guilders of 20 Stuivers a piece.” According to its original terms, the bond would pay 5% interest in perpetuity. (The interest rate was reduced to 3.5% and then 2.5% during the 17th century.) The interest payments were recorded directly on the bond. The water board used the money raised to pay workers at a recently constructed cribbinge, a series of piers near a bend in the river that regulated its flow and prevented erosion.

Wall Street’s Old, Unwanted Bond Salesmen Find a Home in Chicago - Bloomberg

In the new Wall Street, there are simply fewer jobs. Post-crisis rules to curb risk-taking and shrinking bond-trading revenues have compelled banks to cut costs. Electronic trading platforms have let clients bypass salespeople. In the past five years alone, the biggest global firms have cut almost 10,000 trading and investment banking jobs, according to research firm Coalition Ltd. Older, higher-paid traders and salespeople have been especially vulnerable.

Companies Derive Credit Scores from Phone Metadata

Prompt bill payers are typically more reliable than those who hold off, and people who make frequent calls far outside a bank’s network are more likely to have trouble making deposits. However, even the esoteric information can factor in — researchers at Cignifi, a Cambridge-based firm studying the predictive capabilities of mobile data on loan repayment and savings, found that the time of day and neighborhoods from which calls are placed can be indicators, too.

Thomas Piketty: “Germany has never repaid.”

Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Franco-Prussian War of 1870, when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt. The history of public debt is full of irony. It rarely follows our ideas of order and justice.

Once in 3 billion years? Fix your model.

The Oct. 15 gyration, when Treasury yields fluctuated by almost 0.4 percentage point, was an “unprecedented move” that would have serious consequences in a stressed environment[…] Treasuries are supposed to be among the most stable securities. […]It’s just a matter of time until some political, economic or market event triggers another financial crisis, he said, without predicting one is imminent. The Treasuries move was “an event that is supposed to happen only once in every 3 billion years or so,” Dimon wrote. A future crisis could be worsened because there “is a greatly reduced supply of Treasuries to go around.”

The future has taken a looong time to reach the US Treasury market

The face of automation on Wall Street is a computer hooked up to nine blinking screens that goes by the name Quantitative Market Maker, or Q.M.M. Until last year, the work that Q.M.M. performs was handled by human traders at JPMorgan Chase, who would shout prices into a phone and yell “Done!” when the trade was executed. Now, Q.M.M., which sits on the same floor as those traders in a Midtown Manhattan skyscraper, can come up with the same prices in a fraction of a second. When it completes a trade, it emits a jingling cash register sound, making the trading floor sound like an arcade. […]These trading desks have long been the noisy, competitive heart of Wall Street, and JPMorgan’s operation has been the biggest in the world in recent years, bringing in $15.5 billion in revenue last year.