The Bond Bulls are Here

Thank you guys for joining me and welcome to Episode 11 of Season 2 brought to you by Magnelibra Trading & Research (MTR). This episode is entitled “The Bond Bulls are Here”

Quick Disclaimer: The following podcast is for educational purposes only. This is not a solicitation to buy or sell commodity futures or options. The risk of trading securities, futures and options can be substantial and may not be appropriate for all listeners.

Ok guys hope your week is going excellent, we just wanted to touch on a couple of items before we get into covering the recent bond market moves. First off this whole USAID issue with the new Dept. of Govt. Efficiency uncovering the vast amounts of wasteful spending shouldn’t really be much of a surprise. We feel Americans fall into 4 distinct camps on this,

1. There are those that have always known that this is how everything has operated and simply just ignore it or chalk it up to well “its just how things are, there is nothing I can do so why bother.”

2. Then there is another camp that claims that they could never believe this level of corruption could exist within the govt in regards to spending and will ALWAYS chalk it up to conspiracy and absolute denial.

3. Then there is the group that has greatly benefitted from this excess and frivolous spending and we all know, nobody will bite the hand that feeds it and thus these are the products of the environment types, those funded directly that benefit from all of this Govt. spending. NO, we are not talking about legitimate social use cases by the way, we are talking mainly of all the other non essential, non societal true benefit spending.

4. The last group is the very small subset that have always known but have never been able to have enough resources in regards to those in power that could actually make a difference. This group has known the US Govt debts and spending have been out of control BUT never having the resources and capacity to actually, one, force the issue out there to the masses for disclosure, and second, the ability to actually force change, this is now the DOGE officials.

So that is our take, one thing is certain, all of this should not be taken lightly. Sorry all Americans are affected by this, and we are never, ever going back, that is a good thing. The US Govt for far too long has been left unchecked to placate and fund virtually anything and everything at the cost of trillions and trillions in capital that should be strictly used to secure American interests that are valid both here and abroad. This is funding that Americans are paying heavy interest and funding that could have been used to secure a better infrastructure perhaps. The biggest factor that we see is that all of this has led to massive inflation that directly affects every single person on this planet not just Americans and this inflation is a direct tax, a direct defunding of American wage earnings.

That last part is probably the most important distinction to make and one that we feel many Americans fail to truly understand and or grasp the severity of it to their own detriment. I often feel like this kind of thinking, by which people feel powerless to change is unfortunate. I say this because one person does make a difference, can make a difference and one person can change the course of history. There are many examples of this, Elon Musk, is one man, Donald Trump is one man and there in of itself is proof enough.

I’ve listened to thousands of hours of philosophy, especially works by Alan Watts and I highly recommend anyone who wants to learn more about their lives to do the same. One of the things that I am always reminded of from his teachings is that our lives are always evolving, always changing and as much as we may feel like we are not going anywhere, it is in those times that we are in constant transitioning, yet we just aren’t recognizing it. That perhaps our constant state of worry or denial clouds our senses and deters us from seeing that obstacles are merely learning lessons, necessary adjustments to be dealt with in order to accelerate our understanding so that we can become more consciously aware in order to improve upon something. Quite often he spoke of failure to act and or to quitting something and this is probably the worst thing that one can do, in fact he said the majority of failures are not because of ones own inaction, or because of any other externality, but rather failure is a result of just giving up. A result of not pursuing something long enough, a result of continuing on and persistence. The crazy thing is, I have heard Trump say this very same thing, that a lot of his success, came from not giving up, that everything is a challenge that we must continue to fight on and then success will eventually come. I have often heard my pastor say similar things as well, saying God answers all our prayers, sometimes you just need to look and more so, it might not be within the time frame that you want, but ultimately our prayers are answered.

Ok guys sorry for the metaphysical branch, but I think its important to present to my listeners what is on my mind, for I am a firm believer that everything is good and that if we just look at things from that perspective, life will flow much, much easier.

Alright, I wanted to look at the US bond market as we have seem quite a resurgence here lately and its kind of running under the radar, but take a look at yesterday’s US bond market yield curve move. A hefty flattening as the 30Y bond outperformed and saw 10.4bp drop as the 2Y only fell 3.1bp flattening the 2s/30 curve by 7.3bp on the day: