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Gundlach: Weighing in on one of the world's more hated asset classes, he says Treasurys aren't...

Gundlach: Weighing in on one of the world's more hated asset classes, he says Treasurys aren't terribly overvalued on a relative basis. If you've got to short government paper, make it that of France, he says, where the 2-year note yields 0.13% and the 10-year 2.11%.
Comments (6)
  • davidshelton
    , contributor
    Comments (310) | Send Message
     
    Franc, the next shoe to drop....?
    8 Jan 2013, 05:08 PM Reply Like
  • vhulk
    , contributor
    Comments (2) | Send Message
     
    I think that is controversial to build a relative value argument on US govies comparing them to European debt. There are other instruments out there that are likely to beat the risk-reward ratio of government debt in the next future.
    8 Jan 2013, 10:38 PM Reply Like
  • Johnaudio1
    , contributor
    Comments (18) | Send Message
     
    Its all about the real interest rates. Bernake will keep the ten yr 1% below the real rate till inflation is back. It is about jobs and lending. Its not about low risk and a clear path. He is willing to experiment. He is doing something we have never seen. The question is will the "spring board" of expectations turn violently or calmly. It is that simple. If you think violent - short long bonds. (TBT, etc) If you think clamly - stay with TLT till it is obvious the bonds are falling and rates are going up at a rate that will eat his margin. Look for false starts.
    8 Jan 2013, 10:58 PM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    Gundlack opens his mouth without thinking. Yes, I don't like the French system, but US Treasuries are not overvalued with yields below inflation.
    8 Jan 2013, 11:09 PM Reply Like
  • slincs
    , contributor
    Comments (11) | Send Message
     
    In my previous comment, I think I used the wrong symbol for the short ETF. It should have been TBF
    9 Jan 2013, 12:41 AM Reply Like
  • slincs
    , contributor
    Comments (11) | Send Message
     
    I'm not knowledgeable about France, except that it is quite socialist and about 50% of GDP is government controlled (I have visited many times). My real comment is that I don't see how we get rid of all the government (central bank) created liquidity without rampant inflation. It seems timing is the big question. I have been long the ETF TFN for a couple of years and it has obviously been the wrong call, but I'm content to wait. My thought is that the interest rates may explode soon which will hammer the TLT. Any comments?
    9 Jan 2013, 12:43 AM Reply Like
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