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Good information from CME on trading the SOFR vs Eurodollar Spread. There are exchange supported spreads for this but be mindful of the expiry settlement differences between the two contracts. I have not personally traded this - but intend to...

https://www.cmegroup.com/education/files/spreading-sofr-ff-and-ed-futures.pdf

https://www.cmegroup.com/education/articles-and-reports/trading-us-money-market-spreads-with-sofr.html

You’re mistaken about using such a radical duration difference between SR/GE as a substitute for convexity.

1. Name a stock that can’t be hedged. 2. Low interest rates are helpful, but I could name hundreds of Fortune 500 companies whose valuations aren’t terribly reliant on interest rates. Tell me how low interest rates drives the valuations for ABC or Apple or Amazon.

You’re going to pay more for the Theta than any expected return on an inflation spike unless it happens QUICK. VNQ appreciation and inflation rates have not been correlated since 2009.

You keep changing your posts after I cite them. You originally stated that long term deflation didn’t exist. I was the one to cite Japan as Exhibit One.

Are you just going to ignore the past twenty years in the United States? How would you account for West Coast real estate prices going up faster than the rest of the Country while mortgage rates have been dropping?

That’s just a flat out wrong statement. Look at Japan. It’s been grappling with deflation for years, but price declines have been small. From 2001 to 2010, the average annual decline was 0.3 percent (that’s one-third of 1 percent), according to the International Monetary Fund.

The market isn't ignoring it. The market knows that the Fed created this liquidity suck in the first place. If you take the time to actually look at the amounts of liquidity the Fed is putting back into the repo market it's peanuts compared to QE. And QE started the liquidity suckage. The...

Chicken Little - the sky has not yet fallen.

In terms of Canada and the US (North America) - the risk is for inflation is quite subdued. We are not Argentina or Venezuela by any stretch of the imagination. At least not at present. While a strong Dollar tends to hurt exports - it gives the holder tremendous buying power. This is not...

Inflation has been so thoroughly suppressed by globalized supply in North America. Buying option premium would be, IMO, ruinous as a pure inflation bet due to Theta decay. And on a real estate reit etf of all things... :confused:

Traditionally you’re absolutely correct. But globalization has drastically changed that paradigm. The most sensitive commodity is Natural Gas and Crude Oil - and North American Production has profoundly altered the Supply side of the equation. Even when we see regional commodity spikes - like...

There’s more than a little skepticism about the reliability of Chinese economic data. The Chinese Communist Party has ownership stakes in many major Companies, and the CCP is hypersensitive about its narrative and perception to the World...

It CAN be tricky because a modest uptick in inflation can be bullish for stocks. (To a limited extent - increasing corporate profits whilst preserving consumer buying power is the delicate balance) Any meaningful increase in core inflation metrics would hit Treasuries the first and the hardest.

Really big specs and commercials use very sophisticated iceberg tools and order injection algorithms - it is counterproductive to show your hand to the market unless you’re running a spoofing bot. Which is yet another reason why market delta and volume footprint tools are incomplete or even...

Price changes that are accepted or rejected over time are all that matter. Volume is a very weak secondary motive.

There is so much spoofing and order crossing going on in electronic markets that I have grave doubts about the integrity of volume information as it relates to short term spec order flows. Only the exchange regulatory compliance department has access to individual order identifier tags -...