More on Consumer Sentiment: Importantly, according to the report authors, the large gain was...

More on Consumer Sentiment: Importantly, according to the report authors, the large gain was evenly split between the first and second halves of the month, suggesting continued gains into September. Panic hits the bond pits thanks to a combination of a Fed adding stimulus to an economy maybe not needing it. The long bond yield +13 bps to 3.06%. TLT -2.6%.
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Comments (6)
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
    The long bond yield won't increase appreciably with continued Fed twisting. Don't make the same mistake Bill Gross did, and act like a vigilante early to the party. Wait until the party really turns south: the Fed cannot "control" long-term rates, and we get sharp interest rate dislocations.
    14 Sep 2012, 11:50 AM Reply Like
  • JohnLocke
    , contributor
    Comments (383) | Send Message
    The question is where is the stimulus going and will where it is going make any difference?


    -Who's Mortgage backed securities are being purchased and at what premium.


    Is the Central Banking Cartel (FED) now forced to keep rates low under the guise of people being able to get low interest loans from a bank that wont loan to them because of the job they do not have all to keep from servicing 16 Trillion in debt at any rate above .038%?


    I bet if folks double up on their grocery buy this month they will make 10% on their investment compared to next months prices...
    14 Sep 2012, 11:58 AM Reply Like
  • Andres Rueda
    , contributor
    Comments (185) | Send Message
    Panic should have hit the bond pits a long time ago. The panic of - gee, I guess I just realized that I did not know what I was doing. Bond traders who paid yields of 1.38%, 1.47%, 1.63%, or even the current yield of 1.85% for the 10-yr bond apparently can't do math. The long T-bonds are a deteriorating asset at recent yields. Anyone with a spreadsheet can play around with the coupons, repayment schedule, and govt inflation data and Fed targets, and confirm the size of the built-in loss. You can also play around with sensitivity to upward movements in interest rates, to confirm the sharp pain as long-term interest rates creep up. Long bonds are the idiot's version of greed: lots of risk for no yield.
    14 Sep 2012, 12:09 PM Reply Like
  • Tack
    , contributor
    Comments (16499) | Send Message


    The first thing any prospective Treasury buyer or current holder should do is look up "convexity" on Wikipedia.
    14 Sep 2012, 02:34 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
    Gosh, I have a couple hundred options written on TLT.


    It is a joyous day .....
    14 Sep 2012, 01:29 PM Reply Like
  • Jeb Handwerger
    , contributor
    Comments (640) | Send Message
    called top in late July.

    14 Sep 2012, 01:41 PM Reply Like
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