Last night, the US CPI data for September was released, which directly slapped everyone in the market. The expectation was 3.6 and the result was 3.7. Don’t underestimate the 0.1 gap, just pay attention to the consequences of exceeding expectations.
Originally, commodities surged in September, and everyone knew that this wave of inflation could not be suppressed, and the data would definitely soar. However, the so-called statistical data has always had a fuzzy range. The PS method is not too difficult. The US Statistics Department He has always mastered it very well.
The United States has always been very cunning. The Fed’s so-called expectation management is to first let go of its own paparazzi and give a so-called expectation, and then release data that jumps left and right above the expected value based on the actual situation.
If there is an expectation of rising inflation, and then the data comes out that inflation exceeds expectations, then the market will unanimously expect that the Fed’s monetary policy will be more aggressive than expected in the future. In addition, there was a sudden surge on October 6. In September, the United States added new non- Agricultural employment was 336,000, significantly exceeding expectations.
The Federal Reserve has always advertised that the two indicators it pays most attention to are inflation and employment. Now that they are better, both exceed expectations. Doesn’t this mean that the current U.S. monetary policy is not strong enough? It cannot stop raising interest rates and shrinking its balance sheet, and must use more powerful drugs. Exciting!
Laomeiwan’s expectation management is a good hand. If it gives you an expectation, the market will guide asset prices in the direction early.
So the question is, why does the Fed have to guide the market to make a short prediction? Who is it to profit from?
A big thing happened in the bond market during the National Day, with U.S. Treasury yields soaring.
During the epidemic, a large number of stock gods and investment experts emerged on Capitol Hill in the United States, all of whom were masters of making real money.
So you see, the world has always been like this, and all insider information will be clearly traded beforehand.
Let’s look at the 10-year U.S. Treasury yield chart. After reaching a high point on October 6, it began to decline.
Why the high point? Short sellers take action en masse! When the bizarre non-agricultural data came out, U.S. bond yields suddenly reflected and slowly fell back.
On September 19, the Bank for International Settlements issued an extreme report, which provided survey data: short positions in two-year U.S. Treasury bond futures reached a record high in August. Hedge funds hold $600 billion in short positions in the U.S. Treasury market, which totals about $25 trillion.
Hedge funds engage in highly leveraged transactions in the U.S. Treasury market. According to a series of arbitrage operations on Wall Street, margin can be used to amplify leverage by up to 150 times.
Who would have the nerve to become a hedge fund boss these days without some inside information?
If short sellers dare to make big bets, they must have a response plan.
Does anyone remember the particularly popular short-squeezing method of junk stocks in the US stock market in 2021? There was a battle between long and short, and short sellers fell into a trap, forcing the exchange to temporarily pull the plug.
On September 19, the whole world knew about the BIS report and that a large amount of money was shorting U.S. Treasury bonds. At this time, the short sellers were like fish hanging on the chopping board, waiting to be cut at any time.
The short sellers have to find a way to counterattack?
In fact, it is very simple. Create expectations and manage expectations, so that the bulls will be beaten in the face by the sudden data. During the National Day, the net was almost shut down. The US debt bulls were defeated by the rapid decline, and then they were overwhelmed by the so-called economic employment in the United States. If the data is poured into a pot of hot oil, a large piece of it will die.
When short positions are closed at profit, the yield on U.S. Treasury bonds will naturally fall.
Of course, the amount of funds is so huge that shipments will not be exhausted for a while, and CPI data has to keep up.
Shorts can quickly close their positions amid fluctuations, but longs in U.S. debt still dominate the market after all, and the big buyers of U.S. debt are mainly U.S. financial institutions.
Previously, Silicon Valley Bank was hit by a thunderstorm, which led to a wave of bankruptcies of small and medium-sized banks in the United States. The main reason here was that they had too many floating losses on U.S. debt and suffered a run on it. Suddenly, there was a liquidity crisis, and a large number of U.S. debt had to be sold to solve the liquidity problem. , the sell-off caused floating losses to turn into real losses. With more people killing more people, Silicon Valley banks had no choice but to go bankrupt.
In order to avoid a chain debt collapse, the Federal Reserve has developed a tool to provide liquidity for U.S. debt.
As the saying goes, there is no harm if there is no buying and selling. Floating losses on U.S. debt are easily solved. If you mortgage the debt according to its previous value and go to the Federal Reserve for liquidity, if you can borrow money to solve the liquidity problem, there will be no series of thunderstorms due to runs.
That’s how the Fed responded.
As we all know, the accounts of the Federal Reserve and the U.S. Treasury Department are highly confidential. No one has ever dared to audit them. Even if they are as bold as Sichuan Bao, they only dare to touch the butt of the Department of Defense.
So is the Fed really shrinking its balance sheet? Have you confirmed that it is shrinking? Without the liquidity support of the Federal Reserve, U.S. financial institutions would have died collectively due to the collapse in Treasury bond prices.
The Federal Reserve secretly uses various tools to provide liquidity. This can explain why U.S. assets have risen due to interest rate hikes. The stock market has not fallen. Real estate has returned to historical highs. It is probably only commercial real estate that has problems.
Think about the miraculous economic miracle of the United States. GDP exceeds expectations and employment is better than expected, but electricity consumption is miraculously declining. This is the era of electrification. How can there be an economy that grows without electricity?
I have always envied people like Buffett who have insisted on doing insider trading for many years without wavering. If there are no insiders, then use the political resources at hand to instigate bills and create insider opportunities.
This is an example of financial capital governing the country, and it is clear who the father is.
If even the law can be changed according to the wishes of the funder’s father, what’s the big deal about changing some innocuous economic data?
In “House of Cards”, Kinoshita keeps a journalist lover, and uses her to spread news to influence the political arena. This is really not made up.
It is said that the Federal Reserve also has important informants. All the Fed’s data expectations, such as dot plots and the like, have long been put into the market through informants to guide expectations, and then they use PS methods on top of the expectations formed by the public to let everyone follow the instructions. Walk.
What a great way to make a profit.
Don’t call me a conspiracy theorist. This is not a conspiracy at all. This kind of operation in the United States is even completely legal. It’s just that ordinary people have no way to use this set of rules to make profits. The control power is in the hands of the big guys, on Capitol Hill. Why are seats so precious? Is it really because Americans are selfless and dedicated to politics?
No, no, no, if you want to participate in the distribution of top-level interests, you must first grab the top chair, otherwise it will all be delusional.
Inflation in the United States is naturally unstoppable, and inflation will rise around the world. Today, major Eastern countries also released CPI and PPI data, and many people have seen deflation expectations.
Haha, is it really deflation? How deflation?
Data is often lagging behind. It is better to focus on past data than to think about future development.
The reason why all seemingly unreasonable things can happen is that there must be an unreasonable distribution of certain interests hidden in them. It’s as simple as that.