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"I have great confidence the Fed is ultimately going to get their way," says Lee Cooperman,...

"I have great confidence the Fed is ultimately going to get their way," says Lee Cooperman, explaining the bear case on Treasurys. "I don't think people understand how risky a U.S. government bond is at 2% return." He's keeping his money in what has worked - gold, the S&P, Apple (AAPL), and Qualcomm (QCOM), among others. Treasurys have worked too - how about a little love?
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Comments (6)
  • gensearch2
    , contributor
    Comments (1516) | Send Message
     
    It's a good thing the Chinese have more faith in the US than Mr. Cooperman.
    22 Feb 2012, 05:52 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    The Chinese have been slowly selling their treasuries. They ain't stupid.
    23 Feb 2012, 09:26 AM Reply Like
  • Morg
    , contributor
    Comments (250) | Send Message
     
    Ummm.... The fed wants low rates. They are already getting their way.
    22 Feb 2012, 08:24 PM Reply Like
  • gensearch2
    , contributor
    Comments (1516) | Send Message
     
    Do you know anyone who wants to pay high interest rates?
    23 Feb 2012, 08:59 AM Reply Like
  • jackmayes
    , contributor
    Comments (17) | Send Message
     
    The Fed wants to have it both ways - low long term rates AND lower unemployment and higher GDP growth rates. Right now they have unemployment going lower (= more jobs) and GDP at 2 to 3%. The 10 year and 30 year USTs are at major recession levels. The Fed has $1.6 Trillon of UST on their balance sheet. The 10 year note has gone DOWN 1.5 points since the U.S. debt was downgraded to AA from AAA. All of this is counter intuitive, at least to me. Yes, I know I'm fighting the Fed. Doesn't pay to be positive on the economy.

     

    Disclosure: I'm short long term UST using the TBT.
    27 Feb 2012, 02:14 PM Reply Like
  • gensearch2
    , contributor
    Comments (1516) | Send Message
     
    The purpose of low interest rates is to lower the unemployment and raise the GDP. The other side of the coin is inflation rate.

     

    The Fed started playing with interest rates to attempt to manage the economy after the high inflation rates of the 70s. Raise interest rates if inflation is high, lower them if unemployment is high.

     

    It also has the advantage of keeping mortgage rates low, providing some stimulus to housing and keeps interest on the debt low.
    28 Feb 2012, 08:15 AM Reply Like
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