Treasurys are no longer a sell, says Goldman, closing out its (highly profitable) short in the...

Treasurys are no longer a sell, says Goldman, closing out its (highly profitable) short in the 10-year note this morning. (via Doug Kass). Higher earlier, the 10-year yield is now 1 bp lower on the session at 2.15%. TLT +0.7% premarket, TBT -0.9%.

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Comments (5)
  • contrarianadvisor
    , contributor
    Comments (3199) | Send Message
    I agree with Goldman, the sell-off in Treasuries has run its course. I would be an aggressive buyer here. Despite Wall Street perceptions to the contrary, the global economy is nearing recession and a likely deflationary cycle. Going forward from here, I expect Treasuries to far outperform equities through the balance of 2013. I look for the ten year to trade through 1% later this year.
    29 May 2013, 09:49 AM Reply Like
  • KenGold
    , contributor
    Comments (295) | Send Message
    1%?? Who are you, Gary Shilling? :)


    I agree that all indications are that the bond market has overreacted to last week's Fed minutes and testimony by Bernanke. There will be little if any tapering between now and year-end, and economic growth is likely to slow. Still, I don't see the 10-year dropping much under 1.5% even under a 20% correction scenario for the equity markets (which I fully expect, by the way). 1% would suggest we are in a recession in the U.S. later this year with China/Europe melting down even further. Is that what you expect?
    29 May 2013, 11:02 AM Reply Like
  • contrarianadvisor
    , contributor
    Comments (3199) | Send Message
    Ken, I'm forecasting a global deflationary bust with equity markets around the world falling by 50% or more. The Street's obsession with QE and timing the exit is missing a far bigger issue, which is a global economy that is decelerating and heading for a bust. The Fed will end up having to ramp up QE, not taper, but it will be in reaction to this bust so won't be able to prevent it. As always happens near major inflection points, investors are focused in the wrong direction. As equities begin to lose altitude there will be a scramble for the exit and a flight to safety that will drive Treasuries to significant new highs. I actually think we may see !/2 of 1% on the ten year by the end of this year.
    30 May 2013, 09:56 AM Reply Like
  • Flod
    , contributor
    Comments (190) | Send Message
    We see already the result of FED's tapering the monetary execution. As the interest goes up, the 10y bonds goes down comprising higher yields. We should be alert for the coming months in 2013 if the FED will continue this program!
    29 May 2013, 11:19 AM Reply Like
  • Aristiphones
    , contributor
    Comments (1325) | Send Message
    I thought they had this short on for 30 years? Anywho...the Government thanks you for the liquidity. Obviously it doesn't hurt to have one of your own on the inside (in the form of Ben Bernanke.) another knife in the back of the war effort of course. Went the extra mile to say "don't follow me" here as clearly this is a "buy high/sell higher trade." but as Dog Kas famously said "we're all just about worthless actually." Now how 'bout that cruise line industry!
    29 May 2013, 12:21 PM Reply Like
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