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US government debt sells off as hedge funds cut down on risk

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US government debt sells off as hedge funds cut down on risk

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US government debt sold off sharply on Monday as hedge funds cut back on risk in their strategies and investors continued shifting into cash during a third day of acute tumult on Wall Street.

The benchmark 10-year Treasury yield jumped 0.19 percentage points on Monday to 4.18 per cent, the biggest daily rise since September 2022, according to Bloomberg data. The 30-year yield jumped 0.21 percentage points, the biggest move since March 2020. Yields rise when prices fall.

Monday’s drop in Treasuries — ultra-low-risk assets that typically shine during periods of market turbulence — highlights how US President Donald Trump’s announcement last Wednesday of steep tariffs against trading partners continues to reverberate across Wall Street. Equities fell sharply on Thursday and Friday, shedding $5tn of market value, but investors had initially sought refuge in Treasuries.

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Market participants said the declines in the $29tn Treasury market on Monday reflected several factors, including hedge funds cutting down on leverage — or borrowing used to magnify trades — and a broader dash for cash as investors sheltered from swings in the wider market.

Gennadiy Goldberg at TD Securities said the move reflected “an ‘everything, everywhere all at once’-type trade”. He added: “Multisector funds are trying to deleverage, which leads to a ‘sell everything’ trade.”

Investors and analysts pointed in particular to hedge funds that took advantage of small differences in the price of Treasuries and associated futures contracts, known as the “basis trade”. These funds, which are large players in the fixed-income market, unwound those positions as they cut back on risk, prompting selling in Treasuries.

“Hedge funds have been liquidating US Treasury basis trades furiously,” said one hedge fund manager.

The moves were not limited to hedge funds. Investors across the board sold Treasuries to raise cash, with one fixed-income trader pointing specifically to traditional asset managers.

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“I think investors are moving to cash and cash-adjacent assets to weather this market volatility,” said Ed Al-Hussainy, senior rates analyst at Columbia Threadneedle Investments.

“The simplest explanation (for the move in yields) is investors selling what they can and hunkering down. Selling equities now will lock in losses so the lowest-hanging fruit is to raise cash by selling Treasuries,” said Al-Hussainy.

The hedge fund manager who attributed the moves in yields to the basis trade said the scale of the broader hedge fund selling was “destroying” liquidity — or the ability to easily buy and sell assets — across Treasuries, high-grade corporate bonds and mortgage-backed securities.

“There’s massive deleveraging going on, any source of liquidity is being tapped,” the person said.

Additional reporting by Costas Mourselas and Leslie Hook

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Man Charged With Posting Bomb Instructions Used in New Orleans Attack

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Man Charged With Posting Bomb Instructions Used in New Orleans Attack

Federal prosecutors have filed charges against a former Army serviceman they accused of distributing instructions on how to build explosives that were used by a man who conducted a deadly attack in New Orleans on New Year’s Day last year.

The former serviceman, Jordan A. Derrick, a 40-year-old from Missouri, was charged with one count of engaging in the business of manufacturing explosive materials without a license; one count of unlawful possession of an unregistered destructive device; and one count of distributing information relating to manufacturing explosives, according to a criminal complaint unsealed on Wednesday. The three charges together carry a maximum sentence of 40 years in federal prison.

Starting in September 2023, the authorities said, Mr. Derrick was using various social media sites to share videos of himself making explosive materials, including detonators. His videos provided step-by-step instructions, and he often engaged with viewers in comments, sometimes answering their questions about the chemistry behind the explosives.

The authorities said that Mr. Derrick’s videos were downloaded by Shamsud-Din Bahar Jabbar, 42, who was accused of ramming a pickup truck into a crowd on Bourbon Street in New Orleans on Jan. 1, 2025, in a terrorist attack that killed 14 people and injured dozens. Mr. Jabbar was killed in a shootout with the police. Before the attack, Mr. Jabbar had placed two explosives on Bourbon Street, the authorities said, but they did not detonate.

The authorities later recovered two laptops and a USB drive in a house that Mr. Jabbar had rented. The USB drive contained several videos created by Mr. Derrick that provided instructions on making explosives. The authorities said the explosives they recovered were consistent with the ones Mr. Derrick had posted about.

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Mr. Derrick’s lawyers did not respond to requests for comment.

Mr. Derrick was a combat engineer in the Army, where he provided personnel and vehicle support, the authorities said. He also helped supervise safety personnel during demolitions and various operations. He was honorably discharged in February 2013.

The authorities did not say whether Mr. Derrick had any communication with Mr. Jabbar, or whether the men had known each other. In some of Mr. Derrick’s videos and comments, he indicated that he was aware that his videos could be misused.

“There are a plethora of uh, moral, you know, entanglements with topics, any topic of teaching explosives, right?” he asked in one video, according to the affidavit. “Of course, the wrong people could get it.”

The authorities also said that an explosion occurred at a private residence in Odessa, Mo., on May 4, and the occupant of the residence told investigators that he had manufactured explosives after watching online tutorials from Mr. Derrick.

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Mr. Derrick’s YouTube account had more than 15,000 subscribers and 20 published videos, the affidavit said. He had also posted content on other platforms, including Odysee and Patreon. Some videos were accessible to the public for free, while others required a paid subscription to view.

“My responsibility to my countrymen is to make sure that I serve the function of the Second Amendment to strengthen it,” Mr. Derrick said in one of his videos, according to the affidavit. “This is how I serve my country for real.”

Outside of the income he received through content creation, Mr. Derrick did not have any known employment. He did receive a monthly disability check from Veterans Affairs, the affidavit stated.

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The Girls: “This isn’t ringing alarms to y’all?” : Embedded

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The Girls: “This isn’t ringing alarms to y’all?” : Embedded
Allegations pile up, but Child Protective Services declines to investigate and the school district continues to promote Ronnie Stoner. We include an update at the end of the episode. “The Girls” is a 4-part series from the Louisville Public Media’s investigative podcast, Dig.
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Chud the Builder, Known for Racist Confrontations, Charged With Attempted Murder

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Chud the Builder, Known for Racist Confrontations, Charged With Attempted Murder

A streamer known for hurling racist slurs in public settings under the nickname “Chud the Builder” was charged with attempted murder after a shooting outside a Tennessee courthouse on Wednesday, the authorities said.

The streamer, Dalton Eatherly, 28, was involved in a confrontation with an unidentified man that escalated to gunfire outside the Montgomery County Court in Clarksville, about 50 miles northwest of Nashville, the Montgomery County Sheriff’s Office said in a statement. Both men sustained gunshot wounds and were in stable condition, the office said.

In addition to attempted murder, Mr. Eatherly was charged with employing a firearm during dangerous felony, aggravated assault and reckless endangerment with a deadly weapon, the sheriff’s office said.

Mr. Eatherly, who is white, has accumulated an online audience by livestreaming confrontations in which he uses racist language toward Black people in public.

Law enforcement did not provide any details about the second man involved in Wednesday’s shooting. Mr. Eatherly posted an audio recording online of paramedics treating his wounds in which he claims he shot the man in self-defense.

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A video posted by the website Clarksville Now shows Mr. Eatherly on a stretcher with a microphone attached to his lapel.

Mr. Eatherly is being held at the Montgomery County Jail, pending arraignment, the sheriff’s office said.

According to court records, Mr. Eatherly was scheduled to appear for a court hearing on Wednesday morning in an unrelated case brought by Midland Credit Management, a collections agency.

A lawyer listed in court records from a separate harassment case in which Mr. Eatherly was a defendant in November did not respond to a request for comment.

On Sunday, three days before the shooting in Clarksville, Mr. Eatherly was arrested in Nashville. According to a police affidavit, Mr. Eatherly live streamed his meal at a restaurant, Bob’s Steak and Chop House, on Saturday even though the restaurant had asked him ahead of time not to do so.

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When he was confronted, Mr. Eatherly “became disruptive and started making racial statements, yelling, screaming and otherwise creating a scene,” according to the affidavit.

He then refused to pay for his $370 meal. Mr. Eatherly was charged with theft of services, disorderly conduct and resisting arrest. He was released on $5,000 bond.

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