No, I will not apologize for the clickbait title, or as Arnold always says, “To Hell With You!”

Lordy, the GFC, tech boom, S&Ls and the entirety of Japan’s post-war boom all culminated because $TNX hit a slanty line pic.twitter.com/Jmny7GpSPy

— Urban Carmel (@ukarlewitz) February 14, 2018

We’ve all seen the chart, that old diagonal line drawn across thirty years of financial chaos. If it all it takes to call the end of the bond bull market is a writing utensil and a straight edge then holy shit what are we paying people 2/20 for?

I tend to believe the US bond bull market is nearing its end. I think owning USTs here for anything more than a trade is a mistake. With that said, I think we have reached a point in time where the risk reward is enormously favorable for entering into a long UST position.

$TLT wkly down 9, +ve RSI div, at LT support. pic.twitter.com/apVJI8krPL

— Teddy Vallee (@TeddyVallee) February 28, 2018

The mechanics I previously described way back in January 2017, seem to be playing out right before our eyes. In that blog post, I posited that a slowing China would catch record speculative positions in a variety of “reflation trades” from short USTs to long commodities like oil and copper offsides.

Been too long since I last published something. Time to get back to #GlobalMacro!https://t.co/a2682nbNAD

— Klendathu Capitalist (@KlendathuCap) January 29, 2017

Since then, these positions have only become more extended, with oil longs out numbering shorts by almost 15 to 1.

$OIL Longs hit a new record high (again) last week and there are now 14.7 #WTI long positions for every short. I don't trade based on this, but it tells me there's massive risk in the market & there's no shortage of bearish factors lurking now that can very quickly unravel it pic.twitter.com/BUdC1vthGg

— Adam Mancini (@AdamMancini4) February 3, 2018

Now investors are more terrified of the implication that ever rising bond yields might have on our recently cracked low vol environment. And on a more personal level, I’ve recently noted that even established equity bears do not like USTs here for fear of a replay of a 1987 style risk off event across all financial assets.

(5/5) @MerrillLynch Fund Manager Survey Feb 2018.

As fixed income continues to underperform and the UST 10 Year approaches the 3% resistance level — every Tom, Dick, and Harry are worried about inflation and a bond market crash.#WealthManagement #familyoffice $TLT pic.twitter.com/oJPRbwfPCT

— Tiho Brkan (@TihoBrkan) February 15, 2018

Yet if we look at the macro environment, we’ll see fears of rip roaring inflation might be misplaced. Perhaps investors are extrapolating too much at a pivotal turn in the global economy?

World Industrial Production %12M Change pic.twitter.com/AoCBfkbU4o

— J. Brett Freeze, CFA (@Techs_Global) January 30, 2018

Global PMIs led by China have started to roll over.

Weak China PMI is shrugged off due to Lunar New Year. Yet, it's not just China PMI ticking down.

Source: BBG, Merk pic.twitter.com/d1girxkHAY

— Axel Merk (@AxelMerk) February 28, 2018

Since the ascendance of Xi Jinping in the fall, the government has cracked down relatively hard on the shadow banking sector.

China's loan growth number might be misleading.
"The strong RMB loans number was in large part because shadow lending was very weak in January thanks to stricter oversight, so traditional loans had to make up the difference." @triviumchina pic.twitter.com/UFQZiKUKXN

— Klendathu Capitalist (@KlendathuCap) February 13, 2018

The size of Wealth Management Products (WMPs) which are essentially ponzi finance vehicles used to fund speculation in assets ranging from commodities to real estate have not grown in over a year.

Rather unsurprisingly this has had a negative effect on real estate prices in some of China’s most bubblicious cities.

SHENZHEN JAN. NEW HOME PRICES FALL 3.4% Y/Y

— Silver Watchdog (@Silver_Watchdog) February 24, 2018

Falling / stagnant real estate prices comes at an awkward time for developers.

Chinese property developers face RECORD $31bn of onshore and offshore bond maturities in 2018, which may more than double if put options are exercised (Bloomberg)

— YUAN TALKS (@YuanTalks) January 4, 2018

70% of household wealth in China is invested in real estate. Without the wealth effect from rising home prices, spending could slow. And if somehow I still have not managed to convince you yet…

Buy bonds pic.twitter.com/GAtgIkbtte

— Jared Dillian (@dailydirtnap) February 14, 2018