Many western policymakers have never understood the UST market implications of Putin’s move; they will soon (Page 2) “Global foreign currency reserves are falling at the fastest pace on record as Central Banks support their currencies.” (Page 4) “Treasuries’ liquidity problem exposes Fed to ‘biggest nightmare’.” (Page 6) “Current levels on the MOVE UST volatility index occur when the Fed has lost control” – Index creator Harley Bassman (Page 9) “Saudi Arabia and Russia plan

…the 2nd Oil Crisis could be worked through, slowly, but the international financial system could not survive a 3rd Oil Crisis – the inflation would make it impossible to recycle the petrodollars to the oil importing countries with any hope of repayment, trade would crumble, and the system would be brought to its knees.-BIS Chair Jelle Zijlstra, 1980 In Central Bank circles, it is well known that the world debt markets as we know them,

“Senior banker describes leveraged unwind in UK gilts as coming close to triggering a ‘Lehman moment’” (Page 2) “Summers says global market risk is building like in August 2007” (Page 3) Similar to 2007, US policymakers are shockingly complacent as they appear to be “fighting the last war.” (Page 6) “Holy moly: ‘The UK only has net FX reserves of $80 billion, less than two months’ worth of import cover.’” (Page 9) “Japan’s intervention in

Market shock: AAA rating [on subprime mortgage bonds] might be junk.-New York Times, July 20, 2007 The March Eurodollar futures contract is pricing in a 4.97% terminal Fed Funds Rate… Luke, the US government is out of business at 4.97%!-Veteran macro trader DC, to FFTT on 9/23/22 …as Luther described the deteriorating situation in Germany, it finally dawned on the BOE’s Norman that the game was up.  The German economic position was now irretrievable.  As

“The Fed needs to break the market.” (Page 2) Trailing 12-mma Foreign Private UST Bond and Note Purchases hit 40-year highs (Page 3) “Japan intervenes to prop up JPY for first time in 24 years” (Page 4) “It’s feeling a little disorderly in the UST market” (Page 8) “LQD (high-yield bond ETF) is back to the COVID lows (though a lot of this is due to duration.)” (Page 9) “California sees warning sign from weak

A major crisis will likely follow if the Fed does not follow the BOJ in loosening policy.-FFTT, 4/20/22 Why we think the Fed will stop tightening by the end of 3q22-FFTT, 4/27/22 edition of FFTT The crescendo of what we have been calling “the scariest macro environment in our 27-year career” for the past 5 months is looking highly likely to arrive in September and into 4q 2022.  The EU (and likely the UK and