Halloween fit check – Bond vigilante costume


1980s vintage trader print tshirt

With Halloween coming up, it’s time to bust out this vintage 1980’s trader print shirt and dress as the scariest thing seen in 2022, the bond vigilante.  Accessorizing it with my Resistol hat and holstered Beretta would really complete the look.

James Carville famously said in the 90s:

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”

This is on track to be the worst year for the 10 year Treasury according to the century lookback of data I’ve seen, and it’s the worst year for 60/40 portfolios in almost a century as well.  It wasn’t always like this, just two and a half years ago in May 2020, I put out the first 0% and negative rates prints in Fed Funds futures.  No wormholes were opened in the process, let alone any stops in the market, but it was one small uptick for a local, one giant leap for market possibilities.  The concept of negative USD rates is hard to believe actually traded, especially today when Feds Funds futures broke into the 94 handle earlier today with the possibility of a 5% terminal rate.  As a postscript, after trading above 100 for a week and half in May 2020, that April 2021 Fed Funds contract eventually settled 99.93.

FedFunds futures 0% and negative trade

I made the first 0% and negative interest rate trade in Fed Funds futures in May 2020