Stupid Comment Of The Day

From Bank of America: “Everyone, including ourselves, is selling into strength”

Really. Selling. Surely, there’s a buyer for every one of those shares? Or has “Everyone” finally developed the one-sided trade? You know, where money appears from thin air replacing your shares without the need to find a buyer? Seriously:

1. For every security sold by someone, one is bought. By someone else. Except for HFTs, who are frequently and illegally both the buyer and the seller.
2. Every security, at all times, is owned by someone.
3. When someone buys a security, their money goes to the seller. There is no change to “money in the market” or “money on the sidelines.” Those are not meaningful phrases.

German 30-year bonds are now yielding 0.83%. 30-year JGBs are at 0.84%. Eurozone consumer prices are most likely now in deflation, Japan prices are flat. Since the peak in 2008, commodity prices have fallen by 83% (basis GSG) or 69% (basis RJI). I am further increasing my already chunky position in long Treasuries.


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