An Intriguing Short-Selling Idea Given The Trump Victory

I'm probably doing it today with some puts.

• New SIFMA stats on T-bills cross-referenced with Treasury Quarterly Refunding announcement suggest RRPs will drain before 2025.

• A short-selling idea now that Trump has won and Kennedy is on the warpath.

• Gold was not slammed yesterday. All commodities were. The gold commodities ratio is stable.

• 10Y yield downtrend line hit.

New SIFMA Stats on Treasurys

SIFMA's October summary is out and T-bills are up by $182B in net issuance. Makes sense that reverse repos are down by about the same amount, about $200B from September to October. All we need is November to repeat this pattern and the tank should finally be mercifully empty. This is very likely, since the Treasury expects to borrow $546B for October-December according to its quarterly refunding announcement, and they've already borrowed $260B. That leaves $286B more across bills (3M-1Y), notes (2Y-10Y), and bonds (20Y-30Y).

The maximum monthly net issuance for bonds this year was $50B, which leaves $236B for notes and bills. At least half of that should be bills, or say $120B, and there's about $170 in RRP left.

Then we wait for bank reserves to hit the critical level somewhere around $3 trillion and then brace for impact.

Recall that the 2008 financial crisis impacted in the final months of the Bush administration. This one could hit in the final months of the (Whatever the Hell) Administration, and Trump will start his tenure with quite a doozy.

Short-Selling Idea

I may do this myself today with a little extra cash. As risk assets exploded higher yesterday on Trump's win, there was one exception.