Long-term Treasurys continue to sell off following the FOMC minutes. In a normal world, tighter...


Long-term Treasurys continue to sell off following the FOMC minutes. In a normal world, tighter (or at least less loose) central bank policy would be a buy signal for longer-dated debt. In this world, with the Fed being the marginal buyer at that end of the curve, its caution on additional purchases is, for now, a reason to sell. The 10-year +9 bps to 2.27%. TLT -1.6%.
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Comments (14)
  • bbro
    , contributor
    Comments (11223) | Send Message
     
    The 10 year a year ago today was 3.45%...
    3 Apr 2012, 03:50 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Lighting fast bbro, gets it. Fed says twist dies in June an 3.45 % is back ASAP an TMV takes me to the moon. Sold too early today on 3 buck day trade,but, got 50 cent punishment an back 81.90.. Going to vault it as "twist" seems to be gone looking at Fed minutes. Stocks are the game . Especially now that most big brokers are calling for a pullback !
    3 Apr 2012, 03:58 PM Reply Like
  • AlbyVA
    , contributor
    Comments (839) | Send Message
     
    Look below beotches... Bonds will be sold off because The Fed isn't foolish enough to hold up the 10yr/30yr paper when it knows inflation and their own looming rate hikes will push those yields higher.
    3 Apr 2012, 03:59 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    AlbyVA, as Ben said ! They bought it and they have to hold it. They sold all the short stuff to buy it... They will take a big hit on the value,but, they can't dump it. If they did . Who would ( or could ) buy it and how low would they need to price 2 trillons worth ??! The rate would be up to 7 to 8% and the Congress would all die of fear that the 15 trillon debt would take the entire IRS take just to service the interest !

     

    So, your comment.........NOT !

     

    US =s PIIG or worse than greece as Sec J baker 3 said !
    3 Apr 2012, 04:04 PM Reply Like
  • AlbyVA
    , contributor
    Comments (839) | Send Message
     
    If the Rates on the 10yr roll up to 8%, I'll be the wealthier beyond the dreams of avarice. TBT is going to make me retire early baby. Which the Government suffers to Refi $10/trillion at 8%, I'll be hiring former College Grads with Ph.Ds to wash my Ferrari.

     

    All hail the bond bubble bursting.
    3 Apr 2012, 04:27 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    I switched to TMV from TBT ! i hear you ,but, 3X kicks 2X's butt ! :>)
    3 Apr 2012, 04:34 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Only by 50% ! :-)
    3 Apr 2012, 05:42 PM Reply Like
  • savelife
    , contributor
    Comments (32) | Send Message
     
    Dr. Bob here...just your run of the mill shrink who, like all of you, enjoy the biggest casino in the world, the U.S. stock and bond markets.

     

    If you guys would pay attention, you might notice that China has stopped buying our U.S. Treasuries recently and is currently selling of chunks of their massive inventory of our bonds because they need money. They are trying to turn a potential hard landing into a soft one to which I say, "good luck"! Their exports are way down and imports up. In short, they are slowly going down the pooper and staying alive on the trillion or so dollars in US treasuries they have bought over the years from the U.S. And, when the interest payments don't keep the lights and funding the construction of cities that nobody lives in to keep their people working at something so they can make money to buy food, their government sells off a slug of them. The U.S. buys them to keep the value of the bond stable with money printed out of thin air. This of course will eventually drive the value of U.S. bonds into the dirt.and interest rates will scream up.
    Knowing this I put a big put on a large number of TLT shares yesterday (20 year treasuries) and am laughing all the way to the bank today. I'm holding those put contract because the party isn't over until the middle of the month, then things will flip the opposite direction.
    Gold is down due to low interest rates and banks plus China are selling their gold to raise needed funds to stay in business (their usual monkey business).
    The dollar is up and bonds are down (a strange situation). As our bonds get sold off, they lose value, however the good old Yankee dollar is holding down the fort for now and more or less has for the past 200 years (no default). It's when you see them both going down sharply at the same time that it's time to take cover and short (or put) every major bank stock you can (try FAZ and buy puts on TLT) for maximum gains.
    Finally, the writing is on the wall. From April 20th into late May look for a 20% dump in the S&P (mostly due to oil price shock in China, the U.S. and Europe). Is this a prelude to the big crash the doom and gloom folks yak about constantly? No...give it until July 1st when Europe cuts off Iran via an oil embargo along with most of the rest of the world. Starving Iranians off the planet is only going to piss them off more. This gets their damb atom bomb built faster which freaks out Israel who then asks their pal, the U.S,. to kick the crap out of Iran, and well, that's all she wrote. Oil will go through the roof (look for $135.00 to 157.00 per barrel) and a world wide oil shock crash. No doubt there will be a lot of people taking "stay-castions" this summer. As for me, I prefer a cruise and to not worry.
    3 Apr 2012, 04:47 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Dr Bob, do you have a colleague who can comp you some help ? The S&P ain't going anywhere near 20% down and funny thing with oil ! The Arab spring caused all the oil comments out in the open ! Iran an Russia and 2 other OPECs needed 120 bucks to keep there economies at least flat. Viola.. Look where oil is.

     

    China is dumping US Gov paper an rolling it into US private paper ! They are almost overtaking EU banks writing US mortgages an buying at Fed window with REITS,, They see where the dollar an US paper is headed.

     

    And, China fought like a wild animal to slow their economy and fought service an goods inflation tooth an nails ,but, let wage inflation fly. This built a great booming domestic base an China is in their hard landing an almost out. They are fine and the US companies are expanding there big time ,but, since GE started the ball rolling with Yuan based bonds over US $ bonds they game changed.

     

    I have a Roth with stocks an property on 3 continents and all in a foundation.. WHEN the reserve is dropped my hard assets will reset for mucho US dollars...

     

    And 135 / oil will happen as dollar keeps dropping,but, if OPEC an BRICs demand the IMF start issuing MORE SDRs with lower Yen an US$ value ..BOOM 250 oil ! And 300 buck MCD burger deals !
    3 Apr 2012, 05:02 PM Reply Like
  • AlbyVA
    , contributor
    Comments (839) | Send Message
     
    The sooner money comes out of Bonds, the quicker it will flow into equities. We gotta get this economy jump started and with people sitting on their money, that won't happen. Time to force people out of Bonds.. No China and No Fed to buy, means Treasury Auctions won't be Uncle Sam's friend for long. Not with $10/trillion at the short end of the curve between 5yrs - 7yrs. Ouch...
    3 Apr 2012, 05:52 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Alby? How does money flowing into equities help the economy? Right now I am looking to exchange some of a family member's money from CD's into dividend stocks. I think the reality is that I have hurt the local economy buy taking it out of a credit union and putting it into a dividend stock. Of course someone had to "sell" that stock for me to buy it, so maybe some retiree will be taking my money and spending it? But unless it ultimately comes out of the market (and a growing price may simply absorb more $ into the market, taking them out of the economy) I can't see how it will help improve.
    3 Apr 2012, 06:01 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    WMARKW, don't tax him with such deep facts. Too bad Obama has gone to a wicked FATCA program and is slamming money leaving the US. I've got safe dollar CDs from banks an credit unions paying from 8.5% in Panama to 16% in Costa Rica... And, they have debit cards that work worldwide as VISA is on them. Brazil 10 yr bonds too with interest deosited into a bank @ 6% with debit cards. This is a global world and it's important to have assets outside the US..

     

    Now, the banks an credit unions are afraid to take deposits as they all MUST file with the IRS.. I am o/k as I have Passports an Residency cards,but, its all so sad.And, the Tresury form is one page an goes to Detroit not the IRS.

     

    You might look at some of the mreits that have been hammered as the rate increase Fed fear scared the owners to sell out.But, spreads are coming back ! Many think there dead,but, IMHO a few are going to pay divvys an are solid ! DL
    3 Apr 2012, 06:09 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    DaLatin....thanks. I have been doing the research and have looked a couple of mREITS. I suspect I will be selecting several and also some muni bond funds, among others. I dont' think it will be too hard to beat 2.5%, which they are not even paying on a 5 year CD now.
    3 Apr 2012, 06:18 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    I used the recent bad news events an secondary announcements to recently buy ARR@ 6.55 NLY @ 15.40 AGNC @ 28.85 and a closed end bond monthly payer FAM at 17.05....

     

    I know they ran back,but, they are all announcing secondary's as this might be the last shot at ultra low buys. The market sells them off,but, smart money sees it for what it is. A good thing ! To quote Martha .
    3 Apr 2012, 06:27 PM Reply Like
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