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DoctoRx
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Over 30 years of investing in individual stocks. Extensive business experience with small to mid-size companies, including as CEO. Many hundreds of blog posts on financial and economic matters since 2008. Focus on value with catalysts for upside price action. Background as a physician and... More
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  • Treasury Bulls Got Good News From The Cyprus Mess 0 comments
    Mar 19, 2013 8:32 AM | about stocks: TLT, EDV, ZROZ

    The ongoing Cyprus mess makes Uncle Sam and his sovereign debt quite the safe haven. This comes on the continuing news of big money fleeing China. Treasuries gapped up in price on the futures boards. Upside gaps on good news for any asset can be powerful, as with stocks to begin this year. Meanwhile, a Goldilocks set-up for bonds may be in play. The US economy is strong enough to be about the best large economy around, but it is weak enough to allow low inflation, per the January state unemployment data. More states saw rising unemployment than falling, which is not what is seen in a strong expansion. Finally, the very latest data on positioning of speculators on the futures boards showed an uptick in speculator bearishness. Normally they are smart money, so we shall see, but in the bond market since 2008, it tends to not have worked out that way. And meanwhile, the Fed keeps on "sequestering" Treasuries. That can create the feared shortage of Treasuries, and prices could once again soar under the "right" (i.e. troubled) conditions.

    This is a highly interesting story, of great pith and moment.

    Disclosure: I am long TLT, EDV, ZROZ.

    Themes: Treasury bonds Stocks: TLT, EDV, ZROZ
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