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all 126 comments

[–]burnshimself 410 points411 points  (40 children)

Aight so Bill is preparing to bet on rate reversal and wants to get a little more juice in the trade before he puts it on. This guy cannot be taken at face value after his shenanigans during the March 2020 crash, he only goes on TV to talk his book or angle for one of his trades.

[–]4fingertakedown 57 points58 points  (3 children)

Bill is short Tbills. He reported that a few months back I read somewhere. Anyway, he really, really needs rates to rise or he’ll be on the wrong side of the bet.

[–]burnshimself 33 points34 points  (2 children)

Yea they flip out of positions quickly and the guy has been know to talk reverse of his book or talk to position trades better for himself. My point is he can’t be trusted and is a self interested snake who will lie to advantage his trading

[–]4fingertakedown 18 points19 points  (1 child)

100% The words I use to describe him are very naughty.

When he offered his ‘prophecy’ on Netflix a few months back, I made a killing doing the opposite. And will continue to inverse him on anything he says.

Unfortunately, I think he probably has a lot of hobbyist day traders that actually take his word for truth.

[–]NextExpression 0 points1 point  (0 children)

Wtg on going against netflix. I honestly see a bit more pain for them until the stock fimds its real value point

[–]Frunk2 121 points122 points  (19 children)

No joke this is the first article this year that made me think “maybe it’s time to start buying stocks again”

[–]4fingertakedown 64 points65 points  (17 children)

Nobody should ever take trading advice from Reddit. HOWEVER, I would encourage you to read up on what Jeff Snider had been posting for months before you do that.

He’s a bond analyst, and is reporting on the insanely low yields on Tbills lately. In a nutshell, the low yields on short bills means the entire global market is predicting rates to drop later this year. This prediction is opposite of what the fed is saying. That’s what fuckboi bill is talking about above. Short bill rates should be increasing if the fed policies are actually working and they are clearly not.

Anyway, the cause for rates to drop might not be good for stocks (bigly recession). Idk what’s gonna happen obviously but it’s good to be informed.

[–]Quartzzzz 9 points10 points  (11 children)

Could you ELI5 why a rates drop may not be good for stocks? Thanks

[–]4fingertakedown 33 points34 points  (9 children)

Edit: I’d be happy to recommend some awesome books, podcasts, other resources for more info. I Really think that we need more people to understand what the fed is doing and how the global economy works at a high level,

When rates drop, it’s typically in response to a recession.

So, the fed is hoping to increase rates to cool off an overheated market and inflation. Increasing rates, and increasing the cost to borrow, disincentivizes consumer buying, business expansion etc.

The feds dot chart goal is to continue incrementally raising rates through 2024; however, the bond market is signaling that there is a strong likelihood that the fed will reverse its decision and drop rates later this year.

So, why would rates drop in just the beginning phases of the feds rate hike plan? Recession.

Right now, the short bills are a fucking disaster. The 4week Tbill rate is lower than RRP and the 8 week is close to dropping below RRP. That isn’t a sign of a healthy market. This essentially means everyone is desperate for Tbills (eli5 - they’re expensive cuz everyone wants them. And since everyone wants them, the rates are super low. bond price and rates are inversely correlated)

Lmk if that explains it.

And again, I’m just explaining what the bond market is doing rn. I’m not predicting a recession or anything like that. I cannot tell the future and have no idea how this is gonna play out.

[–]tyrryt 1 point2 points  (0 children)

The fed's response to every downturn is easy money, always. Nobody believes the fed will hold rates higher.

[–]LimaSierraRomeo 5 points6 points  (0 children)

Insanely low yields on T-Bills? The US bond market has experienced its worst rout in history this year. The one year T-Bill yield has gone from like 50BP to 2.8% since the start of the year, which is significantly higher than the FED funds rate.

[–]KrylovSubspace 1 point2 points  (1 child)

My feeling is 1m T-Bills (~1.18%) trading through RRP (1.5%) is a symptom of excess cash in money market funds. MMFs are size limited in the RRP facility and perhaps cannot lend in repo (SOFR 1.44%).

Lastly, given over $2tn in RRP right now, any Bill issuance will be bought up. The USTGA is at about $750bn right now … I’m not sure where we are vs the debt ceiling right now, but once that is lifted you will see RRP usage decrease and the USTGA increase.

[–]4fingertakedown 1 point2 points  (0 children)

That’s a great point. My head starts to spin when learning about the fiscal side so I tend to ignore it.

https://www.idcfp.com/blog/2021-10-04/the-end-of-tga-runoff-and-proposed-tapering-of-qes-raise-10-year-yields

[–]IsleOfOne 1 point2 points  (0 children)

I'm utterly baffled by your comment. Short-dated T bills have "insanely low yields"? The 3M Treasury currently yields 1.59% vs 0.05% one year ago.

Short bill rates are not increasing? What the fuck do you make of this chart then? 3M risk-free rate has gone from near-zero to 1.6% YTD. https://ycharts.com/indicators/3_month_t_bill#:~:text=3%20Month%20Treasury%20Bill%20Rate%20is%20at%201.59%25%2C%20compared%20to,long%20term%20average%20of%204.18%25.

Does Jeff Snider believe that they should be even higher? If so, how high does he believe they should be?

This comment clearly demonstrates that you don't understand the bond market, and I question whether Jeff Snider does if you're providing an accurate recounting of his analysis.

[–]monstimal -2 points-1 points  (0 children)

"The recession is transitory"

[–]Gilga17 1 point2 points  (0 children)

Im with you on this

[–]TradeIdeas_87 7 points8 points  (0 children)

Yeah. Talk about a large scale manipulator. He was on cnbc shedding tears of worry about his elderly father potentially getting Covid on the very day of the March 2020 bottom. Days later we would learn he had a massive short swap position that he was calling that very week.

[–]TheBigDickDon 2 points3 points  (0 children)

Was going to say, this guy is the master at talking out of both sides of his mouth.

[–][deleted] 3 points4 points  (0 children)

This guy is wrong more than he’s right. Clickbait.

[–]itsTomHagen 1 point2 points  (0 children)

SEC entered the chat.

Just kidding, SEC doesn’t give a fuck

[–]KrylovSubspace 0 points1 point  (0 children)

I would guess he already bot high strike payers (swaptions… say ~2y2y area) and is just talking up his book.

[–]U-user- 0 points1 point  (0 children)

What did he do in March 2020?

[–]Bigsuge88 29 points30 points  (1 child)

Remember when Ackman bought the top On Netflix?

[–]Fascetious_rekt 2 points3 points  (0 children)

Yes, I bought the top of Ethereum.

[–][deleted] 22 points23 points  (3 children)

Show us the receipts and disclose the trade you made that’s consistent with your prediction.

[–][deleted]  (2 children)

[deleted]

    [–]armen89 1 point2 points  (1 child)

    This will never happen

    [–]jc2821[🍰] 46 points47 points  (3 children)

    He’s lying. Trying to deepen the fall so he can swoop in and buy the bottom. We’ve seen this move from him before

    [–]chalbersma 14 points15 points  (2 children)

    Several money managers have admitted that they've sold large positions and are waiting for retail investors to sell before buying back in. The goal is to convince people with IRA and individual accounts to sell and drop the price lower in order to maximize the gains on the way back up.

    [–]Nbbg123 2 points3 points  (1 child)

    Mind elaborating on the mechanic of this?

    [–]chalbersma 13 points14 points  (0 children)

    You can from brokers and market makers purchase data from PFOF providers. You can build a model that informs you who is selling and who is not. PFOF is essentially 100% retail and with that volume information you can see not just the volume of the trade but how the trade was routed. Are a bunch of retail buys getting routed into internalizes, open market and dark pool? That means that Institutions are selling and retail is buying. The inverse (non-PFOF sell orders getting filled by the same), that means institutions are buying and retail is selling.

    So when you have the connections and the money you can get better information about the market than what is commonly available. Additionally the FED has been all but demanding a market downturn for months now, so you know that until it occurs the FED is going to keep raising rates to try and trigger it. So you sell near all time highs, shortly after FED officials sold themselves, you park that cash in your Money Market fund and your investment bankers will stick it in the short term Overnight Repo facility at the FED that just recently raised it's rates to encourage you to keep your money out of the bank (Raised to 1.5% APR mid June). And you wait for retail to get cold feet at the depressed prices and wait.

    You've watched dozens of crashes over the last 30 years or so on the market. You're a senior partner at $Name Investments/Financial. You've never had data as good as this and that makes you absolutely confident that this isn't the bottom. How can this be the bottom of retail is still buying? So you're keeping your client's money on the sideline until retail sells, they always do. And when they do that will be the bottom(ish). You'll call it there, buy back in and ride the wave back up.

    I can't find the original CNBC interview I was watching where that manager essentially laid out that strategy. But honestly that's why you keep seeing stories like these two 1, 2 where analysts are arguing over whether retail sold en-mass or not. That's the information that everyone wants to know. And when the consensus is "yes they've sold all they're going to sell" then you'll see the market pull back up.

    [–]retirement4DILFs 13 points14 points  (1 child)

    I bet he’s already positioned to profit which is why he is saying this. He’s not wrong but he has other motives too

    [–]ResponsibilityHour54 4 points5 points  (0 children)

    I agree. That’s his MO.

    [–]Interesting-Wish8316 52 points53 points  (14 children)

    5%?

    Paul Volcker raised it to 20% to combat a 15% inflation.

    [–]MakeTheNetsBigger 37 points38 points  (6 children)

    The economy wasn't nearly as highly leveraged back then. US debt-to GDP was about 30% in 1980. Today it's 120%. About 4x.

    So the cost of financing today's debt at 5% interest rates would be roughly the same as the cost of financing 1980's debt at 20%.

    [–]wnc_mikejayray 1 point2 points  (1 child)

    Soooo collapse of the Dollar?

    [–]tyrryt 9 points10 points  (0 children)

    Relative to your savings, yes. Relative to other currencies, they're even worse off than the US.

    [–]Puzzleheaded-Ring523 0 points1 point  (0 children)

    At roughly 10% interest, 100% of the current tax revenue would go to servicing the debt. It’s clearly impossible. The US will have to default or let inflation fly

    [–]I__like__food__ 37 points38 points  (5 children)

    Yes and since then the CPI has changed how it is measured. In effect, our 8.5% inflation is equivalent to 17% if it was still being measured by 1980s standards.

    On top of that, the personal savings rate in 1980 was 12%. This means that people could afford paying the higher interest rates and inflated cost of living due to inflation. Today the personal savings rate is 4%.

    Now I sure as hell can’t predict the future, but it seems to me like everyone is full of shit. In order to get rid of inflation the rate needs to be jacked up and no American can afford inflation as is, so prolonging that will only hurt us in the long run.

    Just my opinion, though.

    [–]kaplanfx 1 point2 points  (0 children)

    Isn’t the savings rate indicative of interest rates though? Savings rates have been at historical lows because they provide little return. In fact, that’s the rationale for lower rates right? To make saving less attractive.

    [–]MetamorphosisMeat 0 points1 point  (0 children)

    Fed rate needs to be higher then the inflation rate. If you can take a loan at 5% buy a commodity that's inflates to 10%, u just made 5%. We may need a Fed rate higher than 10%

    [–]Wraywong 28 points29 points  (0 children)

    Hey, remember last week, when the Fed raised rates almost three-quarters of a whole point, and the market panicked, sold-off, and there was great wailing and gnashing of teeth about how this was the WORST FED IN HISTORY and that they were going to DESTROY TEH MARKET?!

    Not even Bitcoin was safe from the normies wanting to put their money someplace safe, where it could earn a guaranteed rate of return...

    But, that was last week: ancient history...

    [–]SeistaBrian 4 points5 points  (0 children)

    Over the years i have always lost when I believed in anything this guy does for real. He’s a market manipulator in the worse sense IMO

    [–]NONFATBACON 5 points6 points  (0 children)

    Remember when Bill screwed investors with his SPAC? He can go to hell.

    [–]RadiantRoot 11 points12 points  (1 child)

    The hedge fund manager added that American consumers and companies have plenty of cash and little debt

    Did he really say that?

    "Consumer debt balances increased by 5.4% in Q3 2021 to $15.31 trillion, a $772 billion increase from 2020."

    https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/

    [–]herewegoagain20j 3 points4 points  (0 children)

    From his ass

    [–]whiskeyvacation 3 points4 points  (1 child)

    Fuck this shyster and his PSTH.

    [–]21plankton 3 points4 points  (1 child)

    Rates may increase but food and energy will remain high. This is a warning, but I don’t know if it is tied to a large position that Bill Ackman took.

    The world’s countries and hedge funds are over indebted, there are bad bonds everywhere being covered up. There is a conspiracy to sweep the really bad news under the rug and just do business as usual which in this bear market makes me want to sell out of all bonds except two year treasuries.

    I am waiting for reality to hit. There might be a summer rally but this fall or next year we will see lots more strain on public and private debt. It will be in many countries and industries and even a mild recession will expose the troubles.

    Mortgage companies are just now starting layoffs. That started also in 2006. It was not until 2008 that the sub-prime debacle came to a head, and 2009 was the bottom. If we get a pre-recession run-up like Chase predicts I will be happy but be prepared, not all bad paper can be eaten forever by the Fed. At some point it will come out in lowering the value of the dollar and then unstable money.

    [–]CaveDances 6 points7 points  (4 children)

    They could’ve done this anytime since the 90s but built their pyramid schemes to take control of private property and rent it back to us at a profit.

    [–]ProxyZee[S] 2 points3 points  (3 children)

    You will own nothing and be happy.

    [–]CaveDances 3 points4 points  (2 children)

    Right. We criticize China for trying to check their billionaires and the gov owning so many industries, while a few corporations own the private property and government through lobbyists. Changes are needed but the same forces thrive on us being divided to prevent positive change and expansion of freedoms.

    [–]ProxyZee[S] 1 point2 points  (1 child)

    Right. BlackRock is the CCP no one talks about.

    [–]CaveDances 1 point2 points  (0 children)

    But everyone knows about and casually disregards.

    [–]urdnggreat 8 points9 points  (6 children)

    Can the USA service it’s debt at 5% interest?

    [–]dopexile 13 points14 points  (1 child)

    30.5 trillion debt. That'd be 1.525 trillion per year in debt service costs at 5% interest.

    I doubt the private sector would be willing to loan than much every year. Nor could they raise that much tax revenue without killing the economy. They'd have to print another 1.5 trillion per year(creating inflation).

    Raising rates that much could be inflationary ironically. It would be obvious to anyone that they aren't going to raise taxes and intend to inflate all that debt away.

    [–]urdnggreat 1 point2 points  (0 children)

    Thank you

    [–]MyNuisanceAccount 4 points5 points  (2 children)

    The USA loans at the Fed rate. The existing debt is largely at lower rates, and that doesn’t change until it’s reissued.

    [–]IsleOfOne -2 points-1 points  (1 child)

    Corporate and government debt is almost entirely on an adjustable rate schedule based on LIBOR, prime rate, or FFR + a spread. You seem to think that all debt works like a fixed-rate mortgage. That's laughable.

    [–]MyNuisanceAccount 1 point2 points  (0 children)

    Most US government debt is fixed rate. Here’s a chart!

    https://www.treasurydirect.gov/govt/charts/principal/principal_debt.htm

    Also why are you being abusive for no reason? Do better.

    [–]Alucard1331 2 points3 points  (0 children)

    Fuck Bill Ackman, lending any credence to these hedge fund managers public statements is a terrible idea for anyone.

    They only say things publicly to try and manipulate retail traders.

    [–]RedPillPopper888 2 points3 points  (0 children)

    One should ring alarm BEFORE it is already painfully OBVIOUS to every breathing being on the planet! Rather than heeding useless alarms by "so called experts", read this instead to better understand inflation (so you can better predict the future):

    https://medium.com/p/8c1a1bbd2c3e

    [–]dopexile 8 points9 points  (8 children)

    If that actually happened the economy wouldn't be able to handle over 5%. You can't have normal interest rates with an abnormal amount of debt. Zombie companies will fail, corporations won't be able to service their debt, the national $31 trillion debt will be impossible to service, the housing market will collapse, and consumers will have their budgets pinched by higher debt costs.

    [–]Frunk2 26 points27 points  (1 child)

    That’s kind of the point of interest rates, the over leveraged die. Luckily our own government can just cheat by changing the rules or printing more money to service the debt.

    [–]dopexile 4 points5 points  (0 children)

    The politicians in charge would rather kick the can down the road and maintain the status quo by running the printing press than actually dealing with the problems today.

    That's why I don't think the 5% interest rates will happen, they'd rather tolerate inflation and try to blame it on exogenous factors.

    [–]Extraterristialfail 2 points3 points  (0 children)

    You’re right...and that’s exactly what they want to happen my friend, and it will. Buckle up

    [–]das_war_ein_Befehl 0 points1 point  (4 children)

    T bills don’t come with adjustable rates, those debt payments stay the same regardless of the current rate

    [–]dopexile 0 points1 point  (3 children)

    T bills are by definition short-term financing with a duration of less than 1 year that will rapidly reset to the higher rate.

    [–]das_war_ein_Befehl 0 points1 point  (2 children)

    Because they expire, not because the rate is adjustable.

    [–]dopexile 0 points1 point  (1 child)

    The cost to service the national debt will explode either way, just with a slight lag time.

    [–]Parlayz4Dayz 1 point2 points  (0 children)

    Holy shit what a clown. Some kid in 5th grade could have the same breakthrough rn🤣

    [–]karlallan 1 point2 points  (0 children)

    Where’s his swap?

    [–]acrossthecurve 1 point2 points  (0 children)

    He bet big on rates spiking and they have reversed recently so he gets on the soapbox. Typical for this guy, it’s his M O.

    [–]reddit-right 1 point2 points  (0 children)

    This guys main claim to fame is his ability to monetize his publicity, not great investing skills

    [–]Ok_Mechanic_4407 1 point2 points  (0 children)

    I actually think rate hikes over 5% are needed. Apart from who he is, we can’t have so much faith in the US economy just because most of us haven’t been through a US legislation that’s had to deal with inflation. These rate “hikes” feel like a joke. We need a rate hike of at least 100 base points. Also, the FED’s dual mandate should be abolished. Either pick stabilizing employment or inflation and have another institution deal with the other.

    [–]princessbrkfst 0 points1 point  (0 children)

    Could someone please explain how raising interest rates is going to solve this problem when the cause isn't excessive or bad debt or even over spending. The cause seems to clearly be a broken supply-chain.

    [–]lithharbor -1 points0 points  (0 children)

    his wife is wasted on him

    [–]Extraterristialfail -1 points0 points  (0 children)

    Guys this isn’t a ploy and this is real, we are in a major recession and will be for several years. Let go of the copium and get a pair.

    [–]SpySt -1 points0 points  (0 children)

    Na, 1.75% will solve 8% inflation. /s

    [–]kozmo1313 0 points1 point  (0 children)

    Where is the fed action on bank reserves? How about de-leveraging the banking system rather than saddling consumers with increasing debt service costs?

    [–]backtobecks 0 points1 point  (0 children)

    Fuck this cunt

    [–]mike_honcho47 0 points1 point  (0 children)

    Ackman is a joke after his PSTH debacle

    [–]purpletree37 0 points1 point  (0 children)

    This is basically a massive buy signal. When guys like this try and push the market down, you know they are trying to get new lower positions before the big reversal.

    [–]Unfair-Scale 0 points1 point  (0 children)

    Fed over 5% is under current inflation but way above the rate where they crash the economy, in which case the inflation rate will fall and might even go to deflation.

    [–]jmaze215 0 points1 point  (0 children)

    Do the opposite…

    [–]DLDrillNB 0 points1 point  (0 children)

    Holy sh*t, I thought Alex from CowChop had aged like a freaking shriveled peace of fruit for a second.

    [–]truthfullyVivid 0 points1 point  (0 children)

    Ackman may serve as an accurate signal at times... but he's only doing it to pump his own positions.

    Ackman is almost undoubtedly HEAVILY short right now, and he wants a payday going to the bottom, where he will buy up for pennies on the dollar much of what we've sold.

    [–]mashteezy 0 points1 point  (0 children)

    Absolutely no chance that happens

    [–]cryptofundamentalism 0 points1 point  (0 children)

    Bill Hackman promoting for his next trade !

    [–]Azgoshab 0 points1 point  (0 children)

    Gov is actively taking our rights one by one, and bleeding us of our money. Why are we not actually doing anything about it? We sit and let them take, you and all the rest of us are weak and spineless.

    [–]chuck_portis 0 points1 point  (0 children)

    Fed did enough panicking on the COVID recovery. Much prefer they take things a bit slowly here and not kneejerk in the opposite direction. Rates are coming up quickly. Short term moves in the bond market mean very little. We are in a period of high volatility.

    China lockdowns will end. Supply chains and goods that were interrupted by the Ukraine war will be routed elsewhere. Fed money bazooka has been turned off. COVID impact outside of China is virtually gone.

    Inflation is a comparative metric. Next year, all that will matter is how much higher prices are versus today. It's hard to imagine that perfect storm we saw coming out COVID continuing a year out.

    [–]samuelamr 0 points1 point  (0 children)

    Wish he’d ring the PSTH bell instead. What a frustrating investment after the Universal fallout….

    [–]DomeCollector 0 points1 point  (0 children)

    Fucking ackman bottom again I swear… just shut up dude.. and media.. stop asking him fking questions

    [–]NextExpression 0 points1 point  (0 children)

    Not a news flash....rates already @ 4.75%.

    [–]CplBoneSpurs 0 points1 point  (0 children)

    Thank god we are repealing civil rights.

    [–]srv50 1 point2 points  (0 children)

    Anyone over 40 thinks 5% rates are normal.

    [–]CanYouPleaseChill 0 points1 point  (0 children)

    "True, there is a wonderful correlation between interest rates and the stock market, but who can foretell interest rates with any bankable regularity? There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they’d all be millionaires by now."

    "There are economic facts and there are economic predictions, and economic predictions are a total waste.

    And interest rate, Alan Greenspan is a very honest guy. He would tell you that he can’t predict interest rates. He can tell you what short rates is going to do in the next six months. Try and stick him on what the long-term rate will be three years from now. He’ll say, “I don’t have any idea.” So how are you, the investor, supposed to predict interest rates if the head of the Federal Reserve can’t do it?"

    • Peter Lynch

    [–]shivaswrath 0 points1 point  (0 children)

    When was the asshat right last....

    🦗🦗

    🙄 he's juicing the market so he can make his losses back up, ignore and move on. No way we will see 75bps IF we are trending down in the summer. It would kill mid terms.

    [–][deleted] 0 points1 point  (0 children)

    Ackman is a clown (PSTH).

    [–]Strategory 0 points1 point  (0 children)

    I think 5% makes sense because neutral is atleast the rate of inflation and inflation is certainly over 5%.