30 Year Treasuries weakening...

[ricket]

http://www.bloomberg.com/apps/news?p...riI&refer=home

May 7 (Bloomberg) -- Treasury 30-year bonds fell the most in about four months as investors demanded higher-than-forecast yields at today’s auction of $14 billion of the securities with the U.S. slated to sell a record amount of debt this year.

“This is a problem,” said Chris Ahrens, head interest- rate strategist at UBS Securities LLC in Stamford, Connecticut, one of 16 primary dealers required to bid in Treasury auctions. “The market required a fairly significant discount to buy the bonds.”

[coolhand]

Re: 30 Year Treasuries weakening...

Given the weak Treasury auction this morning, is it a reasonable conspiracy theory to think maybe Obama was on TV late this morning talking about $17B of spending cuts in his budget because someone at the Treasury called up & said:

"Holy crap, the Chinese aren't here at the auction. Someone get Obama on TV & get him to offer a symbolic olive branch that we will at least make a good faith attempt to not go hog wild with our deficit spending/reflation attempts?"

Any thoughts out there?

[phirang]

Re: 30 Year Treasuries weakening...

YOU BETCHA!!!

Hardly conspiracy, my friend!

For those long the market, just be careful: this is a shot across the bow.

[FRED]

Re: 30 Year Treasuries weakening...

YOU BETCHA!!!

Hardly conspiracy, my friend!

For those long the market, just be careful: this is a shot across the bow.

We have been holding off shorting US Treasury bonds for years. For years they "should" have fallen. We've been dying to say "Time at last to short U.S. Treasury bonds." But we could not until the post-global crash deleveraging was over, nor until all foreign offical lenders except China had pulled out. Not until the U.S. government committed 5.5% of 2008 GDP on fiscal stimulus packages. Nor until the Fed began to support the long end of the Treasury bond market directly. Not until the Fed began QE. Finally, not until the first rumors of disastrously below estimates FY 2008 tax receipts begin to circulate--right about now.

[cjppjc]

Re: 30 Year Treasuries weakening...

We have been holding off shorting US Treasury bonds for years. For years they "should" have fallen. We've been dying to say "Time at last to short U.S. Treasury bonds." But we could not until the post-global crash deleveraging was over, nor until all foreign offical lenders except China had pulled out. Not until the U.S. government committed 5.5% of 2008 GDP on fiscal stimulus packages. Nor until the Fed began to support the long end of the Treasury bond market directly. Not until the Fed began QE. Finally, not until the first rumors of disastrously below estimates FY 2008 tax receipts begin to circulate--right about now.

Great I'm out of my PST. Well I guess I'll get back in. At a higher price I should add. Although what's new with that.

[FRED]

Re: 30 Year Treasuries weakening...

Great I'm out of my PST. Well I guess I'll get back in. At a higher price I should add. Although what's new with that.

TBT is doing better, but all of the negative beta ETFs are kind of squirrely. We need to work out better ways to do it that we don't have to jump in and out of.

[Jim Nickerson]

Re: 30 Year Treasuries weakening...

We have been holding off shorting US Treasury bonds for years. For years they "should" have fallen. We've been dying to say "Time at last to short U.S. Treasury bonds." But we could not until the post-global crash deleveraging was over, nor until all foreign offical lenders except China had pulled out. Not until the U.S. government committed 5.5% of 2008 GDP on fiscal stimulus packages. Nor until the Fed began to support the long end of the Treasury bond market directly. Not until the Fed began QE. Finally, not until the first rumors of disastrously below estimates FY 2008 tax receipts begin to circulate--right about now.

Here are be two opinions from a couple of smart guys, or at least smarter by far than most people I know.

http://zerohedge.blogspot.com/2009/0...eks-later.html

We are happy to buy these sell-offs in Treasuries

When you look at Charts 1-3, you really have to wonder whether or not the markets have been too hasty in pricing out deflation risks. There has never been a time in the post-WWII era where the 12-month trends in wages, producer costs and consumer prices were all in negative territory at the same time. This is the new reality. As the markets focus on the noise from green shoots, we are focusing our attention on the fundamental trends and the end-game. We are more than happy to buy these sell-offs in Treasuries and add scarce safe income to the portfolio. Take profits in equities and scale into Treasuries This move to 3.20% on the 10-year note resembles that inexplicable move to 5.35% back in the summer of 2007, in our view. Yes, yields are much lower today, but the inflation rate is 300 basis points lower too and the unemployment rate is 400 basis points higher. If we recall back in that summer of 2007, the equity market was hitting new highs just as bond yields were. The trade then was to take profits in the former and scale into the latter. After a near-40% surge in the S&P 500 and a near-60% surge in bond yields off their recent lows, it would seem logical to us to embark on a similar shift this time around.

Bond yields do not bottom until well into the next cycle

Even if the recession is to end soon, and that is still very debatable, bond yields do not typically bottom until we are well into the next cycle, as inflation continues to decline even after the downturn ends. So just like further upside potential in equity prices seems extremely unlikely over the near and intermediate term, further downside risk Treasury note and bond prices is also less of a risk today, in our view.

http://www.investmentpostcards.com/

“Since 1988, we have been offered 8 or 10 2-sigma events. (A 2-sigma event is our definition of an important bubble or bust.) All of these events were bubbles, and all behaved themselves by bursting. Now, sadly, there are probably none.
“Government bonds are the one serious candidate. In our opinion, they are badly overpriced but probably not by enough to justify the bubble title.

As best I can figure, one of these guys is going to be wrong. I would use FRED's comment as a tie breaker, but I couldn't understand what was his actual point.

[santafe2]

Re: 30 Year Treasuries weakening...

TBT is doing better, but all of the negative beta ETFs are kind of squirrely. We need to work out better ways to do it that we don't have to jump in and out of.

I've been in RTPIX for over a year. I've been happy with this one considering my timing was early.

[nero3]

Re: 30 Year Treasuries weakening...

The yield curve is pretty steep now. It should be good for the market, but it don't seems like MR market likes it.

[FRED]

Re: 30 Year Treasuries weakening...

Here are be two opinions from a couple of smart guys, or at least smarter by far than most people I know.

http://zerohedge.blogspot.com/2009/0...eks-later.html



http://www.investmentpostcards.com/


As best I can figure, one of these guys is going to be wrong. I would use FRED's comment as a tie breaker, but I couldn't understand what was his actual point.

Everyone is wrong, again – 1981 in Reverse Part I: The Great Divide

[WildspitzE]

Re: 30 Year Treasuries weakening...

--right about now.

Is this official?

[charliebrown]

Re: 30 Year Treasuries weakening...

honked off right now i had wrote may 50 calls on my tbt. hope we see a little price recovery before I get called out in 6 trading days. I would really like to hang on to tbt and rewrite the calls at say 55.

what do you think is going to happen to the inflation numbers with oil moving from the 30's in february to 55 today?

Can't remember the guy's name but a few weeks ago he said sort of rhetorically that the economic down turn resembles that of the 70's oil shocks. not taking it as gospel, but something to think about.

If a lot of the economic damage was done by $150 oil, and we are in or nearing peak oil are we going to get kind of an echoic boom, bust?
ecomony heats up, oil surges, economy crashes, oil prices crash, repeat

[BiscayneSunrise]

Re: 30 Year Treasuries weakening...

Here are be two opinions from a couple of smart guys, or at least smarter by far than most people I know.

http://zerohedge.blogspot.com/2009/0...eks-later.html



http://www.investmentpostcards.com/


As best I can figure, one of these guys is going to be wrong. I would use FRED's comment as a tie breaker, but I couldn't understand what was his actual point.

Grantham along with Marc Faber were two of the few voices (along with iTulip) calling for a market crash. Now Grantham is calling treasuries toppy. If you are looking for another tie breaker, Faber goes much further saying that shorting treasuries will be the trade of the decade.

[medved]

Re: 30 Year Treasuries weakening...

The yield curve is pretty steep now. It should be good for the market, but it don't seems like MR market likes it.

Be careful with the yield curve. It is a function of the CBs "magic". Right now we are at a critical junction, where their magic weakens. It is quite possible (gasp!), this time it is different. The yield curve and some other 100-year old ideas may just stop working, while the 5000-year old ideas (gold is money) will return with terror and slaughter. :eek: :confused:

[metalman]

Re: 30 Year Treasuries weakening...

Be careful with the yield curve. It is a function of the CBs "magic". Right now we are at a critical junction, where their magic weakens. It is quite possible (gasp!), this time it is different. The yield curve and some other 100-year old ideas may just stop working, while the 5000-year old ideas (gold is money) will return with terror and slaughter. :eek: :confused:

the yield curve is shaped by cbs the way a politician shapes his past.

in their heads...



...this will work out... :cool:

but in the end, they fail.

nero is a plant, btw. he's here to make us see how far we've come. he reminds me of me when i first came here 10 yrs ago and didn't know anything.