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Treasury prices get no relief from a reasonable auction of 30-year paper, the long bond still...

Treasury prices get no relief from a reasonable auction of 30-year paper, the long bond still down nearly 2 full points, and the yield 10.5 bps higher at 3.38%. The 10-year note is off a point and a quarter, the yield up 10 bps to 2.24%. TLT -2.2%.
Comments (8)
  • Weird gold and commodities drop, treasuries drop, and the market is up. Commodities should rise with a improving economy and gold should rise against a weakening dollar and Treasuries.
    14 Mar 2012, 03:40 PM Reply Like
  • The dollar has strengthen; however, there is a feeling of 'strangeness' in the air.
    14 Mar 2012, 03:49 PM Reply Like
  • I wouldn't call it weird.

     

    1) Investors are chasing performance into stocks and away from gold and bonds.

     

    2) The improving economy could signal a tightening interest rate environment 2-3 years hence. This obviously exerts significant downward pressure on treasuries.

     

    3) Gold isn't a commodity, per se. Unlike oil, for instance, it won't go up in response to industrial demand.
    14 Mar 2012, 08:48 PM Reply Like
  • What's happening is that assets are being sold and money is just sitting in USD Cash. Treasuries and Commodities selloff, but equities don't rise. The only place all that money went was into the Money Market as everybody waits to see which way the pendulum will swing. Towards safety in Treasuries or Risk in Equities.
    14 Mar 2012, 05:16 PM Reply Like
  • The bond bubble will burst but not quite yet. For the last three months the interest rate on 10 year bonds has been bouncing off historic lows that couldn't go any lower. Its been a great opportunity to sell puts on TMV. Because equities have not moved up proportionately, the bond correction is likely restricted to futures and options. There hasn't been a big move out of bonds that will signal that the bubble has burst. I expect a choppy bond futures market with a growing downward bias. The collapse will come suddenly.
    14 Mar 2012, 05:54 PM Reply Like
  • Wait 'til all those folks in "safe" barely-yielding T-bills get their next statement and see what the effects of bond convexivity (what's that, says the average safety-seeking investor?) do to their principal values. The line forming at the exits is just beginning.
    14 Mar 2012, 05:57 PM Reply Like
  • Money is leaving Treasuries, precious metals and commodities and moving into AAPL.

     

    Yeah, that sounds nuts but consider:

     

    Every 1% move up in AAPL = The market cap of Alcatel-Lucent
    Every 2% move up in AAPL = The market cap of Alcoa

     

    Apple has gained 16% this month. Capital is being drained from non-equity asset classes to feed the desire for equities but mostly shares in Apple, Inc.

     

    If this trend continues then long QQQ and short TLT is the play...

     

    ...ONLY if the trend continues.
    15 Mar 2012, 03:44 AM Reply Like
  • Anybody buying into Apple and calling for a trillion dollar company are fools. Apple is a bubble waiting to pop and drop 50%. But Bonds are the big story. Its 1999 DotCOM bubble, but this time its in Bonds.

     

    Time for the Bond Market to collapse. I'm calling for 6% on the 30yr and 4% on the 10yr. After all, we have year over year inflation of 3% already. Anybody putting their money into a 2% 10yr might as well just burn their money in a barrel to keep warm at night. lol
    15 Mar 2012, 08:35 AM Reply Like
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