Bradford Giaimo

AIG's Bold Move and Why I'm Shorting the Long Bond

I appreciate your point of view. Its refreshing to hear an opposite point of view in a respectful way. Thank you. While it may look that way (selling the bonds at these unpreccedented levels) I am not looking to be a hero and pick tops or bottoms. right now this trade falls within my concepts and stratgies as I explained in the article. In accordance with that I will take it. If it dosent work I will get out, take the loss and look for another opportunity to sell until that view changes. However you have certainly given me food for thought. Good luck.


On Dec 01 03:53 AM Aly-Khan Satchu wrote:

> I would take the other side of your Trade. I feel we live in simply
> unprecedented times and the reversion to the mean idea is a mistaken
> one in this context. We are asphyxiating asset prices via the withdrawal
> of credit. This is not a small one time thing but a major long term
> one.
>
> I would urge you to look at Japan post bubble as the precursor to
> what will eventually play out. Moreover, the only real tool in the
> tool box for resuscitating the Banking sector is going to be via
> a steepish yield curve, a positive carry environment [and the carry
> will get a lot juicier when Fails are punished which I am sure is
> imminent] and ultimately via a Bernanke put. By that I mean Bernanke
> will have to underwrite the yield curve via outsize buying [as and
> when required].
>
> I think the tectonic plates have shifted in this regard and very
> little can jolt this trend.
>
> Aly-Khan Satchu
> rich.co.ke/