Mad Hedge Fund ...'s  Instablog

The incredible melt up in Treasuries yesterday tells you that traders are dumping the global reflation trade like a hot potato. The ten year yield spiked up to a high of 3.28%, down from 4% only a month ago. Yesterday’s auction of ten year Treasury notes saw an amazing bid to cover ratio of 3.28, the highest in 15 years. When traders don’t want to play, they flee to government paper. The music has stopped playing, so it’s time to sit down. It looks like the deflationistas are going to have the upper hand over the inflationistas for the next couple of months. See my interview with Janet Yellen . This certainly puts my TBT trade on hold (see “Sell in May and Go Away” and “The Viagra is Wearing Off”. It’s best to read the writing on the wall, especially when it is in ten foot high, in fluorescent block letters, like this.