"Absolutely Spectacular Meltdown": The Basis Trade Is Blowing Up, Sparking Multi-Trillion Liquidation Panic - Upgoat

"Absolutely Spectacular Meltdown": The Basis Trade Is Blowing Up, Sparking Multi-Trillion Liquidation Panic
submitted by dosvydanya_freedomz to EconomicCollapse 3 weeksApr 8, 2025 21:52:38 ago (+2/-0) (www.zerohedge.com)
https://www.zerohedge.com/markets/absolutely-spectacular-meltdown-basis-trade-blowing-sparking-multi-trillion-liquidation

To summarize:

Multi-trillion basis trade is blowing up and countless funds and banks are unwinding positions, but...

There is not nearly enough liquidity in the system
The lack of liquidity shockwave is rampaging across all markets, sending stocks plunging (liquidation panic), bonds crashing (yields up 50bps in 2 days), and a flight to safety in FX (yen soaring... but at some point the inflection point will get hit and there will be an acute shortage of dollars as the global synthetic dollar short at around $6 trillion is even bigger than the basis trade).

We have critical liquidity drainage events as soon as tomorrow (the 10Y auction followed by the 30Y auction on Thursday), and if there is not enough liquidity in the system, we may have an unofficially failed auction - yes Dealers would in theory take down the whole thing, but if we get a 40 or 50% dealer award, it's the same as a failed auction.

7 comments block

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[ - ] boekanier 4 points 3 weeksApr 9, 2025 01:35:35 ago (+4/-0)

and three days later the stock market is going up again. Everybody, who just panicked, happy again. Stupid humans.

[ - ] oyveyo 2 points 3 weeksApr 8, 2025 22:38:37 ago (+2/-0)

Your shit's all retarded and you talk like a fag.

[ - ] xmasskull 2 points 3 weeksApr 8, 2025 22:27:00 ago (+2/-0)

Post want's "subscription" fee? WTF?

[ + ] Sector2

[ - ] Sector2 2 points 3 weeksApr 8, 2025 22:34:20 ago (+2/-0)

"THIS ARTICLE IS SO GOOD
IT'S FOR PREMIUM MEMBERS ONLY.
DOES THAT SOUND LIKE YOU?"

[ + ] xmasskull