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Does this qualify as the real black swan?
http://www.wsj.com/articles/an-obscure-hedge-fund-is-buying-tens-of-billions-of-dollars-of-u-s-treasurys-1441704601
http://whtt.org/us-treasury-bondsthe...f-all-bubbles/
http://www.wsj.com/articles/an-obscure-hedge-fund-is-buying-tens-of-billions-of-dollars-of-u-s-treasurys-1441704601
A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of U.S. Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street.
Element’s activity has raised questions because the cumulative purchases far exceed the hedge fund’s $6 billion in assets under management. Treasury officials, who frequently meet with large auction participants, have asked Element about its activity, said someone close to the matter.
“Their buying is eyebrow-raising,” said a trader who once worked for a firm that deals in government securities and witnessed Element’s bidding. These primary dealers often know the identity of other auction bidders. Element “never shared its strategy, but we often asked,” the trader said.
Treasury likes to know who is buying its bonds and why, partly because it prefers long-term holders such as pension funds, insurance companies and central banks. Treasury officials fear purchases by trading-oriented funds could result in sales that increase market swings and potentially drive up borrowing costs.
“Their buying is eyebrow-raising,” said a trader who once worked for a firm that deals in government securities and witnessed Element’s bidding. These primary dealers often know the identity of other auction bidders. Element “never shared its strategy, but we often asked,” the trader said.
Treasury likes to know who is buying its bonds and why, partly because it prefers long-term holders such as pension funds, insurance companies and central banks. Treasury officials fear purchases by trading-oriented funds could result in sales that increase market swings and potentially drive up borrowing costs.
The 30-plus-year-old bull market in US bonds, notes and bills may well be the most destructive man-made “Bubble” in all of recorded history. It will sooner or later implode because it is unsound to the core. A puncturing of the bubble may start when any of several huge holders sells. Its implosion will trigger the sale of other overpriced corporate, municipal and foreign bonds, and the dollar itself may well be replaced as the world reserve currency. The US bond bubble is the Godfather because it is so large that no other investment market can absorb the mass exodus which will come from it. It is logical that those who have worked so deliberately to create this debt bubble will fight even harder to prevent its collapse. When it implodes, it will probably bring down lesser bubbles and excesses, including the function of the dollar as a world exchange currency.
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