Traders Rush Out of Treasuries on Optimism About U.S. Stimulus


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02 December 2020


Video commentary for December 1st 2020


Eoin Treacy’s view

A link to today’s video commentary is posted in the Subscriber’s Area. 

Some of the topics discussed include: financial repression trades pick up pace, Treasuries weak, stocks firm , Dollar breaks downwards, gold and precious metals rebound, emerging markets firm. 


It will change everything: “DeepMind’s AI makes gigantic leap in solving protein structures

This article by Ewen Callaway for Nature may be of interest to subscribers. Here is a section:

“It’s a game changer,” says Andrei Lupas, an evolutionary biologist at the Max Planck Institute for Developmental Biology in Tübingen, Germany, who assessed the performance of different teams in CASP. AlphaFold has already helped him find the structure of a protein that has vexed his lab for a decade, and he expects it will alter how he works and the questions he tackles. “This will change medicine. It will change research. It will change bioengineering. It will change everything,” Lupas adds.

In some cases, AlphaFold’s structure predictions were indistinguishable from those determined using ‘gold standard’ experimental methods such as X-ray crystallography and, in recent years, cryo-electron microscopy (cryo-EM). AlphaFold might not obviate the need for these laborious and expensive methods — yet — say scientists, but the AI will make it possible to study living things in new ways.


The first iteration of AlphaFold applied the AI method known as deep learning to structural and genetic data to predict the distance between pairs of amino acids in a protein. In a second step that does not invoke AI, AlphaFold uses this information to come up with a ‘consensus’ model of what the protein should look like, says John Jumper at DeepMind, who is leading the project.

The team tried to build on that approach but eventually hit the wall. So, it changed tack, says Jumper, and developed an AI network that incorporated additional information about the physical and geometric constraints that determine how a protein folds. They also set it a more difficult, task: instead of predicting relationships between amino acids, the network predicts the final structure of a target protein sequence. “It’s a more complex system by quite a bit,” Jumper says.


Eoin Treacy’s view

The sheer breadth of what we do not yet know about biology is becoming more apparent all the time. That’s the greatest benefit of advances in technology, it makes answers possible where questions were never considered.


Traders Rush Out of Treasuries on Optimism About U.S. Stimulus

This article from Bloomberg may be of interest to subscribers. Here is a section:

After efforts to prop up the virus-ravaged U.S. economy stalled for months, a group of Democratic and Republican lawmakers revealed a $908 billion stimulus proposal Tuesday. Getting it approved is far from assured. If it does pan out, that could prompt more money to move out of the safety of U.S. debt into stocks, accelerating a shift that began in November when the Dow Jones Industrial Average enjoyed its best month since 1987 amid promising Covid-19 vaccine news.

“Treasury yields are playing catch-up with the enthusiasm in the rest of the market, and it appears the impetus for additional fiscal spending is the catalyst for rising rates today,” said Charles Ripley, an Allianz Investment Management strategist who is based near Minneapolis.


Eoin Treacy’s view

Investors appear to be rapidly reaching the conclusion that we are going to see simultaneous monetary and fiscal stimulus in 2021. That’s at odds with what is normally a feature of the 1st year of the US Presidential cycle. Historically, new governments have attempted to clear out the proverbial Augean stables in the first year of the term before electioneering begins for the mid-terms. 2017 was also an anomaly because of the Trump tax cuts and 2021 is unlikely to see any meaningful attempt at fiscal rectitude.


Bitcoin’s Rally Spurs Wall Street to Question Future of Gold

This article by Eddie Spence and Yvonne Yue Li for Bloomberg may be of interest to subscribers. Here is a section:

“The transparency in Bitcoin is helping drive a lot of interest,” said Lyle Pratt, an independent investor who owns Bitcoin. “Gold is kind of like a blackbox, you have to trust the custodians to tell you about any flows in the market.”

For Plurimi Wealth LLP’s Chief Investment Officer Patrick Armstrong, who allocates 6.5% of his discretionary funds into gold, even if Bitcoin has potentially bigger upside in an inflationary spiral, the risks are just too big. Gold also has a long history as a store of value that Bitcoin can’t match. There’s always the nagging suspicion that another, potentially central-bank backed, digital currency could supplant it.

“If the debasement trade works, it is very possible Bitcoin works better,” he said. “But it is also possible Bitcoin has no value in years to come, while I do not think the same can be said of gold.”

One thing that’s clear is Wall Street is taking Bitcoin seriously in a way that it didn’t in 2017. “I have changed my mind!” wrote Sanford C. Bernstein strategist Inigo Fraser-Jenkins in a report Monday. Bitcoin won’t replace gold, but there’s room for both, he said, especially if the future is one of inflation and extreme debt levels.

“I see it as being complementary,” he said in an interview. “Whatever one’s starting position was before the pandemic in terms of what your gold and crypto allocation should be, I think it should be materially larger now.”


Eoin Treacy’s view

Many institutional investors missed out on the initial run-up in bitcoin prices and they are committed not to miss out on this one. The big inhibition for institutional money has been the question of custody. With so many examples of exchanges being robbed and even of an exchange CEO dying with the encryption key only committed to memory, there are obvious questions about the security of custody services. That issue was addressed when Fidelity began to offer custody services. Now that both Square and PayPal are offering transaction services, the perception of risk has been reduced but not eliminated.   


Email of the day on top formations

Looking at the chart of Franco Nevada, is that a head and shoulders top formation?


Eoin Treacy’s view

A head and shoulders top formation is an iteration of a ranging, time and size Type-3 top discussed at the Chart Seminar. Tops are more difficult to identify than bottoms because the natural proclivity of prices is to rise once a trend has been established. Therefore, a number of factors need to fall into place to confirm top formation development.


Eoin’s personal portfolio – trading and investment positions increased

Eoin Treacy’s view

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.



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