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Treasurys continue to sell off, the yield on the 10-year of 1.78% is the highest since May, and...

Treasurys continue to sell off, the yield on the 10-year of 1.78% is the highest since May, and up from 1.39% in 3 weeks. Prices are far from cheap though. A buyer today would lose 6.78% of his/her principal - equal to more than 3 years of coupons - with an increase in yields of just another 50 basis points (h/t tradefast). TLT -5.4% since July 24.
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Comments (17)
  • bbro
    , contributor
    Comments (9841) | Send Message
     
    And duration rears its ugly head....
    15 Aug 2012, 08:52 AM Reply Like
  • jwbrewer
    , contributor
    Comments (317) | Send Message
     
    With rates this close to zero, I think convexity is going to be the 'killer'.
    15 Aug 2012, 08:56 AM Reply Like
  • The_Hammer
    , contributor
    Comments (4057) | Send Message
     
    hey bro which of the insurance cos or banks would benefit most from higher rates? this is reason these bastard financials have been rallying of late.
    I do not think this is the killer move up though at least not yet imo.
    15 Aug 2012, 03:50 PM Reply Like
  • dieuwer
    , contributor
    Comments (2409) | Send Message
     
    The bubble is bursting.
    15 Aug 2012, 09:00 AM Reply Like
  • Jeb Handwerger
    , contributor
    Comments (628) | Send Message
     
    written on 7-24-12
    "the treasury bubble is in danger of popping."
    http://seekingalpha.co...
    15 Aug 2012, 09:21 AM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    So much for that safety thing.......and when this wave gets started...watch out...it will turn into a Tsunami fast...
    Today and tomorrow is Facebook....selling that....after that...back to UST´s...
    15 Aug 2012, 09:26 AM Reply Like
  • sportsguy
    , contributor
    Comments (142) | Send Message
     
    Its only safe if you hold treasuries to maturity, which i recommended to my 80+ year old parents. They will always get their money back, just hold onto it as they don't need to be in any equities at all during these times.
    15 Aug 2012, 01:38 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Investors need to evaluate whether this is a swing trade...
    15 Aug 2012, 02:55 PM Reply Like
  • GUS100CORRINA
    , contributor
    Comments (706) | Send Message
     
    When this treasury "bubble" market pops ... it is going to be something to behold ... "Katie bar the door" saying comes to mind. I suspect the stampede will go to the only safe haven left ... i.e., gold and silver markets.
    15 Aug 2012, 02:57 PM Reply Like
  • alsobirdman
    , contributor
    Comments (381) | Send Message
     
    Yes, that's the play I'm making. Nice to see bullion hold above 1600 while t-bill rates are climbing.
    15 Aug 2012, 06:19 PM Reply Like
  • sportsguy
    , contributor
    Comments (142) | Send Message
     
    is that why soros just bought more gold? or so the report goes
    15 Aug 2012, 03:05 PM Reply Like
  • Geoffrey Rocca
    , contributor
    Comments (69) | Send Message
     
    So a 10 year bond has a duration of 13.56 years?
    15 Aug 2012, 03:18 PM Reply Like
  • whiff
    , contributor
    Comments (701) | Send Message
     
    No, I don't believe so - the only bonds that have duration equal to their maturity are zero coupon bonds. Not sure a bond can have a duration longer than its maturity, unless it has a negative coupon. 10 year bond duration will be a function of the coupon, but should be 5-7 years.
    16 Aug 2012, 07:45 AM Reply Like
  • tom_t
    , contributor
    Comments (273) | Send Message
     
    I thought the bubble "popped" when rates went up 50+ points earlier in the year? That turned out to be premature. And so will this event. There is still plenty more bad news to come out of Europe. I agree with the swing trade idea.
    15 Aug 2012, 03:20 PM Reply Like
  • whidbey
    , contributor
    Comments (3391) | Send Message
     
    The selling in Treasuries is related to the EMU where it is widely believed that Draghi will cause the ECB to print euros to give an QE boost to the markets.

     

    Wait and see if Germany agrees his plans, and if they should agree, to what extent. Monetary inflation may be a long ways off yet, and if does not come, bonds will reflect that fact quickly. The EU is in serious disinflation, headed for a period of serious recession. And, I did see the German and French numbers on GDP and it confirms my comment.
    15 Aug 2012, 03:43 PM Reply Like
  • whiff
    , contributor
    Comments (701) | Send Message
     
    A lot of people are going to get a nasty lesson in bond math - might buy some 10 year notes near their 200 day M/A just to see how lousy they feel - it's just like the fish business - sell 'em or smell 'em.
    16 Aug 2012, 07:39 AM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    50% OF THE SHEEPLE WILL hold till the end...and lose by inflation their corpus....other will sell at a lower price and take the loss...I am sure its foreign countries selling at this point....I would.....
    16 Aug 2012, 08:28 AM Reply Like
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