Fixed Income Pair Trade: Long MLN, Short TLT [View article]
seems counter intuitive to short TLT. if bernanke lowers the interest rates, US treasuries rates are likely to go down too and TLT should go up as a result. munis, regardless of never having defaulted are NOT the US treasury and thus SHOULD always have a higher interest. I think your basic premise is wrong.
Fixed Income Pair Trade: Long MLN, Short TLT [View article]
if bernanke lowers the interest rates, US treasuries rates are likely to go down too and TLT should go up as a result.
munis, regardless of never having defaulted are NOT the US treasury and thus SHOULD always have a higher interest. I think your basic premise is wrong.