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Andy Constan, Andy Constan of Damped Spring Macro, described recent negative commentary about 6 percent and the futures CTD flip as mostly unfounded.
Constan stated that market participants, including the street, dealers, and arbitrageurs, have understood these dynamics since the late 1980s and that the current skew already reflects this knowledge. He added that being new to these concepts does not make the concerns valid.
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Constan previously noted that the gap between 48% and 56% net long exposure for long/short equity funds results in a relatively small 1.2% difference in returns, calling it insignificant in market terms (link). He also questioned the U.S. Treasury’s decision to issue fewer bonds despite Treasurys’ strong performance compared to other developed markets (link). Constan has maintained a focus on technical details over broader commentary in previous statements.