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The yield on JGBs falls to 0.815%, the lowest level since 2003. Folks of a certain age will...

The yield on JGBs falls to 0.815%, the lowest level since 2003. Folks of a certain age will remember that summer and remember the seeming impossibility of that level. We're not only back, but the rest of the world is headed there too. German 10-year Bunds, 1.43%, U.S. 10-years, 1.71%. At the short end, Germany has gone even further, its 2-years yielding 0.05% vs. Japan at 0.10%.
Comments (4)
  • Chuck
    , contributor
    Comments (102) | Send Message
     
    If Japan is safer than Europe... Hang On, Folks, it's gonna be a wild ride!!
    IMHO
    18 May 2012, 01:13 PM Reply Like
  • jfxwsr
    , contributor
    Comments (6) | Send Message
     
    China's home values have dropped in some 2/3 of the cities surveyed, and maybe Jim Chanos is right. Finding upside momentum is difficult. And without that, there is no place to invest except Facebook (or maybe not!), and in a very stagnant, sick economic world, yield is return of capital. However, I still expect that the growing population, despite our worldwide efforts to reduce the economic ability of all but the top, will lead to more inflation. And that will change things to a return of most of capital. Bonds will then be less attractive than most commodities, and even some equities. Not everyone will do poorly. Our private company is doing quite well. Yields will go up. "When" is tougher". What does Jim Chanos think?
    18 May 2012, 03:10 PM Reply Like
  • jfxwsr
    , contributor
    Comments (6) | Send Message
     
    A majority of Chinese cities surveyed showed declining home prices. Jim Chanos is right. If China does not provide investment opportunity, few places will. That would indicate persistent world wide low interest rates, if someone wants a return of capital. However, if the growing world population, despite the fact that most have less economic leverage on a cyclical basis, is able to satisfy their needs to some degree, inflation is inevitable. And that must lead to inflation (another way of saying "currency depreciation".). My long standing bets on gold have been very positive, other commodity bets mixed, and TMV and TBT quite negative. There is an internal steady drain on these instruments. But if we are not headed for long-term poverty, rates must rise. What does Jim Chanos think?
    18 May 2012, 03:10 PM Reply Like
  • TreasuryMAN
    , contributor
    Comment (1) | Send Message
     
    Can anybody out there project what they think the share price of TBT will be, if the 10yr yield rises to 2.35%, roughly a 65bp yield rise? I think TBT has BOTTOMED, along with the 10yr yield, and its time to hop aboard this train, and ride the rising yields and sharePrice into glory !! I also think Mitt ROMMNEY as President, with his RE-FOCUS on kicking the economy in the butt, would be gasoline on fire for rising treasury yields !! With a RENEWED Presidential push on strong economic growth, jobs, and LESS Govt spending, treasury yields will rocket higher from their historical lows. Also, Greece will eventually get their free Euros from Germany and France, so they don't go under, and that will calm that crisis, which will fuel the sale of treasuries and thus higher yields !!
    19 May 2012, 02:31 PM Reply Like
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