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US Treasury Bills Signal the Impending Global Economic Apocalypse!
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US Treasury Bills Signal the Impending Global Economic Apocalypse!

Never seen since Lehman Brothers collapse

Mar 19, 2023
∙ Paid
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US Treasury Bills Signal the Impending Global Economic Apocalypse!
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Source: Dall.e

If on Tuesday we were already telling you that the week was going to be interesting with the inflation data and the bankruptcy of Silicon Valley Bank at the end of last week, Wednesday, Thursday, and Friday have not disappointed.

On Wednesday, we saw Credit Suisse's disproportionate plunge at the opening (-30%), only for it to eventually recover due to indications of a bailout package from the Swiss central bank.

Market Summary > Credit Suisse Group AG 
2.16 
USD 
-0.35 (13.94%) + today 
Closed: Mar 15, 19:59 EDT • Disclaimer 
After hours 2.28+0.12 (5.56%) 
ID 
2.6 
2.4 
2.2 
2.0 
1.8 
1.6 
1M 
6M 
12:00 
YTD 
14:00 
Max 
1.76 USD 09:30 
10:00 
16:00 
18:00 
+ Follow 
Previous 
close 
2.51 
20:00

As always, central banks come to the rescue of banks with unprecedented aid to prevent catastrophes that they themselves have prepared. These aids, in case you didn't know, are paid for by all of us.

Credit Suisse meets regulatory capital 
and liquidity requirements 
Credit Suisse's stock exchange value and the 
value of its debt securities have been 
particularly affected by market reactions in 
recent days. FINMA is in very close contact with 
the bank and has access to all information 
relevant to supervisory law. Against this 
background, FINMA confirms that Credit Suisse 
meets the higher capital and liquidity 
requirements applicable to systemically 
important banks. In addition, the SNB will 
provide liquidity to the globally active bank if 
necessary. FINMA and the SNB are following 
developments very closely and are in close 
contact with the Federal Department of Financ 
to ensure financial stability.

For those who have already erased it from your minds, we want you to see the difference between the fear now and the fear that existed in March 2020 with Covid and most central banks.

EUROPEAN CENTRAL BANK 
Research & Publications 
Statistics Monetary Policy 
About 
Home > Homepage 
Media 
I EUROSYSTEM 
The euro 
Payments & Markets 
Careers 
LANGUAGE: 
Banking Supervision 
in 
EN 
Our response to the coronavirus pandemic 
We at the ECB have put in place a set of monetary policy and banking 
supervision measures to mitigate the impact of the coronavirus pandemic on 
the euro area economy and to support all European citizens. 
Extraordinary times require 
extraordinary action. There are 
no limits to our commitment to 
the euro. 
Christine Lagarde, President of the ECB

Amidst this whirlwind of events, one that is going largely unnoticed is the significant fluctuation of short-term US Treasury bills.

95% of society does not know what this means, so I will try to explain it as if to a 10-year-old.

Imagine that US Treasury bills are like little pieces of paper with letters and numbers written on them. These little pieces of paper are essential because they represent the money the US government must pay back to those who have lent it money.

Now, sometimes many people want to buy these little pieces of paper, and other times not so many people are interested in buying them. When many people want to buy them, the price of the little pieces of paper goes up, but when not so many people are interested in buying them, the price goes down.

This rise and fall in the price of the little pieces of paper is what we call "volatility." When there is a lot of volatility, it means the price is changing a lot and very quickly over a short period.

It is essential for the US government to maintain stability in the price of these little pieces of paper because if the price changes too quickly, it can cause economic problems for the country and those who invest in them.

When the price of US Treasury bills falls very rapidly, it can be a signal that something is wrong with the country's economy. For example, it could be that investors are worried about the health of the economy and decide to sell their Treasury bills to buy other assets considered safer, like gold.

When many people sell their Treasury bills simultaneously, the supply of Treasury bills increases, and the demand decreases, causing their price to drop. This rapid decline in the price of Treasury bills can have negative effects on the economy, such as raising interest rates and making it more challenging for the government to finance itself through the issuance of public debt.

2 Year Treasury Rate (1:2YTCMR) 
3.93% for Mar 15 2023 
Overview 
Level Chart 
ID 
Interactive Chart 
1M 
3M 
6M 
FEB 20 
YTD 
IOM 
MAX 
FEB 27 
MAR 6 
VIEW FULL CHART 
4.50% 
3.93% 
MAR 13

In summary, a rapid drop in the price of US Treasury bills can be a sign of broader economic problems and may have negative effects on the country's economy and those who invest in them. Therefore, it is essential for the US government to closely monitor market behavior and take measures to ensure the stability of the economy and financial markets.

And what is happening today?

Image

That is why it is absolutely necessary to have a non-correlated portfolio and invest in potential black swans that are happening and will happen, like ours. In life, you only need to be right once to make a lot of money.

In the meantime, we are confident that the Fed will come to the rescue, and by December, there will be ample liquidity in the markets, and interest rates will have dropped by at least 1%.

This will undoubtedly benefit our long-term position.

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