The 🐿️ takes a look at the long bond again.

Our insurance policy against US rates market meltdown ($TLT Acorn) needs to be rolled. Much has changed but we still want the insurance.

The recession ‘can’ continues to be kicked down the road but ‘everybody’ is still positioning for a large drop in long-dated US Treasury yields.

Summary

• The economic picture remains confusing. As / when / if [delete as appropriate] the US recession hits, a very large crowd is convinced that an overweight position in long dated treasuries will protect their portfolios.

• The 🐿️ is not convinced. We need to renew the treasury market meltdown insurance that we put in place back in April and think it looks even more interesting this time.

The 🐿️ takes a look at the long bond again.

Back in April, we published this Acorn (link 👇), contemplating forms of insurance against an ‘accident’ in the US Treasury market. The Acorn was a put option structure on TLT, the iShares 20+ Year Treasury Bond ETF (with a long-only alternative in the form of PFIX 0.00%↑ for those that don’t use options). It’s time for an update.

What if JPOW lost control of the long-end?

So, let’s take a look at what has shifted in terms of price and narrative.

Back in April, we w…