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Saturday, September 15, 2012, 11:00 AM "Do you know what the loss would be on a 30-year Treasury if it went back ... just to the yield in force in 2011?" asks Jeff Gundlach, incredulous anybody would buy one (answer: 37%). If you need safety and yield, he says, buy Campbell Soup (CPB) instead. Listen to why the hot-shots at his firm would rather day-trade Facebook than divine the Treasury market. 48 Comments [U.S. Economy, Quick Ideas]
Friday, September 14, 2012, 11:13 AM Richard Barley has a kind word for bonds (currently in the midst of a savage sell-off), saying the global growth outlook continues to be dismal despite the Fed and ECB. Could the curve get steeper still? Sure, but the date of any increase in short rates keeps getting pushed further into the future, which should help anchor the long end. 7 Comments [U.S. Economy]
Friday, September 14, 2012, 10:09 AM 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%. 6 Comments [U.S. Economy]
Friday, September 14, 2012, 7:21 AM Treasurys continue to get punished by the Fed, the 10-year note yield up 11 basis points to 1.83%. So much for Operation Twist - of which the stated goal is to lower long-term rates. Those who believe in the omniscience of the Fed will point to rising long-term rates as proving the QE announcement is already working. The FOMC should have done this months ago! 7 Comments [Global & FX]
Thursday, September 13, 2012, 10:45 AM If the Fed announces a new QE program this afternoon, one could do worse than selling Treasurys. Bond yields have rallied sharply (very cool graphic here) after the past two QE efforts were launched. It was only after the Fed closed shop on its purchases that yields resumed sliding. It's simple, says Jeff Gundlach: QE is stimulative, therefore one should expect yields to rise while it is ongoing. 4 Comments [U.S. Economy]
Tuesday, September 11, 2012, 5:04 PM More Gundlach: Another remarkable slide shows the 30-year bond yield in 1984 and in 2012. The long bond hit 14% in 1984 with inflation at 4% and falling - a real yield of 1000 basis points. Today, with inflation at 2.5%, the long bond yields just 2.85%. "The duration of the DoubleLine Total Return Fund is the shortest it's ever been." 2 Comments [U.S. Economy]
Tuesday, September 11, 2012, 10:32 AM Buy Italian 3-year notes and sell U.S. 30-year Treasurys, suggests Bill Gross. With both yielding about 2.85%, it's about credit risk vs. duration risk. "Classic face-off. ECB vs. Fed. Winner? Italy." Comment! [U.S. Economy, Global & FX]
Monday, September 10, 2012, 7:38 AM The odds of additional Fed stimulus have risen to 99%, according to indicators tracked by Citigroup. Fingers in the wind, bond strategists have reduced their end-of-year 10-year Treasury yield forecast to 1.65% from 1.9% a month ago, perhaps forgetting past bouts of QE have sent yields higher, not lower. 6 Comments [U.S. Economy]
Thursday, September 6, 2012, 10:27 AM An outstanding chart (via InterestArb) shows the gaping chasm that's opened up between the U.S. employment picture (not so terrible) and Treasury yields. Priced as if nothing will ever go right in the economy again, Treasury prices may one day look down to see they're far out past the cliff's edge. Things are going a bit right this morning, and the long bond yield is up 5 bps to 2.76%. TLT -1.1%. 3 Comments [U.S. Economy]
Thursday, August 30, 2012, 10:02 AM Taking the opposite view from Bill Gross, Jeff Gundlach doesn't expect another round of QE from the Fed. While not doubting the Fed's ability to take the 10-year Treasury yield as low at it wants, he's sticking to his view the 1.39% hit in July will remain a bottom. 9 Comments [U.S. Economy]
Monday, August 27, 2012, 9:30 AM Mom-and-pop mortgage holders aren't the only ones who like to take advantage of low rates by refinancing. The month isn't over yet, but corporations have issued about $120B in debt, the busiest August since Dealogic began compiling records in 1995. The question is whether corporate treasurers (often good at timing) are signalling a bottom in interest rates. 6 Comments [U.S. Economy]
Friday, August 24, 2012, 12:31 PM "Stocks and other (risk) markets have gotten ahead of themselves," says portfolio manager Joe Balestrino, taking advantage of August's swoon in Treasury prices (already reversing) to buy. "(Markets are) saying the fiscal cliff will not happen and that it looks like 4% growth." The move, says another manager, is "based on bailouts," and can turn on a dime. 2 Comments [U.S. Economy, Quick Ideas]
Wednesday, August 22, 2012, 2:53 PM Treasurys extend a big 2-day rally following the FOMC minutes, the 10-year yield off 8 basis points to 1.71% (after nearing 1.9% yesterday). If the Fed is truly going to launch QE3, bond bulls (and bears) should take note because past QE episodes have sent Treasury prices lower. 9 Comments [U.S. Economy]
Tuesday, August 21, 2012, 2:59 PM Something for bond bears to consider: It took just the slightest of wobbles in stocks (DJIA on a 100 point reversal today) to send buyers flying into Treasurys. The long bond has rallied more than a full point since just before noon, bringing the yield back to flat on the day at 2.91%. TBT -0.3%. 4 Comments [U.S. Economy]
Monday, August 20, 2012, 3:11 PM The Fed's got it right. Data going back to 1962 shows the 10-year Treasury yield is far more correlated with core CPI than it is with the headline rate, notes Matt Busigin. Since 1986, the Treasury/core rate correlation is even higher, getting pretty close to 1. The data also gives truth to the argument that energy and food price shocks (which affect the headline) are deflationary. 7 Comments [U.S. Economy]
Wednesday, August 15, 2012, 8:46 AM 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. 17 Comments [U.S. Economy]

EDV Vanguard Extended Duration Treasury ETF

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Vanguard Extended Duration Treasury ETF