Something special is gonna happen with :TBT

[icm63]

http://www.zerohedge.com/article/for...rst-time-years

Its a bomb and its ticking louder...tick tick tick boom !

TBT to rally hard !

UPDATE 25-03-2010
1) A chart
2) ZeroHedge comments

Scroll to end...

[magicvent]

Re: Something special is gonna happen with :TBT

You would seem to be in agreement with Niall Ferguson:

"The problem with massive deficits as a response to the recession is that, at some point, you are going to see upward movements in yields. Upward movements in long-term nominal interest rates at a time of relatively low inflation -- that spells trouble for anybody with a large burden of debt, and, of course, practically everybody in the U.S. has a large burden of debt, including...the federal government. So, although it is going to take a while to reach these shores -- I think this will play out in Europe for a while, spreading from one country to another -- at some point, people are going to look at the finances of the United States and say, you know, we really need more than 3.5 percent on a 10-year bond with numbers like these because they really aren't much better than the finances of Greece.
...
At some point -- and I think it is over the next six-to-12 months -- there is going to be a re-rating, a reappraisal of U.S. fiscal prospects, and that, it seems to me, will be the moment of truth."

But isn't this contrary to EJ's position?

[jtabeb]

Re: Something special is gonna happen with :TBT

You would seem to be in agreement with Niall Ferguson:

"The problem with massive deficits as a response to the recession is that, at some point, you are going to see upward movements in yields. Upward movements in long-term nominal interest rates at a time of relatively low inflation -- that spells trouble for anybody with a large burden of debt, and, of course, practically everybody in the U.S. has a large burden of debt, including...the federal government. So, although it is going to take a while to reach these shores -- I think this will play out in Europe for a while, spreading from one country to another -- at some point, people are going to look at the finances of the United States and say, you know, we really need more than 3.5 percent on a 10-year bond with numbers like these because they really aren't much better than the finances of Greece.
...
At some point -- and I think it is over the next six-to-12 months -- there is going to be a re-rating, a reappraisal of U.S. fiscal prospects, and that, it seems to me, will be the moment of truth."

But isn't this contrary to EJ's position?

Understand that he is now kinda "married" to the administration due to his policy inputs. I think his last couple of pieces do the best he can to "HINT" at what's happening and what's going to happen, but if you noticed, they've been pretty vague. I do not think that is unintentional on his part.

I think the best take away he has left recently is "USE YOUR BRAIN" or words to that effect. He really has laid the challenge on all of us to "USE OUR BRAINS" and decide for ourselves, while providing hints as to how this may turn out.

That's my take anyway.

Hope it was useful.

[c1ue]

Re: Something special is gonna happen with :TBT

http://www.zerohedge.com/article/for...rst-time-years

Its a bomb and its ticking louder...tick tick tick boom !

TBT to rally hard !

Provocative but not actionable.

iTulip as well as myself have been waiting to short Treasuries, and we both continue to wait.

While long term it is certain interest rates in the US must go up, the short term (next 4 months) is very unlikely to be the time. Europe's drama with Greece and the rest of the PIIGS must be either resolved or replaced by the JIMmy COFFas next round of annual budget shortfalls.

The reality is that unless you bought TBT in December of 2008 and are still holding it or traded in/out precisely with leverage, there has been very little profit to be had with any other entry time.

[icm63]

Re: Something special is gonna happen with :TBT

The whole western world is issuing BONDS...

The QE is ending..

China is not buying long stuff..

Sure the FEAR may cap the rally in TBT for some time, yet..funny how a the last two days sell off in stocks hardly saw a ripple in the long bond.

But at the moment GREECE is nothing...but SPAIN well thats another story

[jpatter666]

Re: Something special is gonna happen with :TBT

Provocative but not actionable.

iTulip as well as myself have been waiting to short Treasuries, and we both continue to wait.

While long term it is certain interest rates in the US must go up, the short term (next 4 months) is very unlikely to be the time. Europe's drama with Greece and the rest of the PIIGS must be either resolved or replaced by the JIMmy COFFas next round of annual budget shortfalls.

The reality is that unless you bought TBT in December of 2008 and are still holding it or traded in/out precisely with leverage, there has been very little profit to be had with any other entry time.

Yep, that's my position on TBT. I have a very, very minor position (still in the black) that really serves no other purpose than to keep it on my screens.

[ThePythonicCow]

Re: Something special is gonna happen with :TBT

Understand that he is now kinda "married" to the administration due to his policy inputs. I think his last couple of pieces do the best he can to "HINT" at what's happening and what's going to happen, but if you noticed, they've been pretty vague. I do not think that is unintentional on his part.

Well said, jtabeb.

[icm63]

Re: Something special is gonna happen with :TBT

Provocative but not actionable.

The 10yr auction didnt go so well today...

The 30yr tomorrow...

So far I am in the money....

Yip it was ACTIONABLE !

[vinoveri]

Re: Something special is gonna happen with :TBT

Provocative but not actionable.

iTulip as well as myself have been waiting to short Treasuries, and we both continue to wait.

While long term it is certain interest rates in the US must go up, the short term (next 4 months) is very unlikely to be the time. Europe's drama with Greece and the rest of the PIIGS must be either resolved or replaced by the JIMmy COFFas next round of annual budget shortfalls.

The reality is that unless you bought TBT in December of 2008 and are still holding it or traded in/out precisely with leverage, there has been very little profit to be had with any other entry time.

Can anyone tell me the simplest way to buy 1 yr, way out of the money puts, on the 10/30 year UST? I'm beginning to like the way Taleb and Hugh Hendry talk about hedging.

[icm63]

Re: Something special is gonna happen with :TBT

Buying PUTS ITM or OTM is long or short time frame...is just the same as buying any option.

YOU are thinking about LEAPS...go off to CBOE and see if they have any LEAPS on interest rates.

[cindykimlisa]

Re: Something special is gonna happen with :TBT

http://www.zerohedge.com/article/for...rst-time-years

Its a bomb and its ticking louder...tick tick tick boom !

TBT to rally hard !

Seems to me I have been hearing this some time on itulip and it has not happened.

Perhaps a little out of the box thinking here.

Ben and company raise rates to counter inflation. However, nothing would help housing, commercial real estate, the market, wealth effect, commodities, job growth, odd infinitum ------more than a sustained period of moderate to high moderate inflation. Don't get me wrong, I win big when rates go up. I hope for my own personal estate that anything over ten years goes way up soon.

However, if I can rig the system like Ben, Obam and GS can - then I keep rates down for years or until the flames of fire (FIRE) are well on their way again or until POOOOOOOOOOOOM is doing well.

Cindy

[unlucky]

Re: Something special is gonna happen with :TBT

I'm with you on rates, but I'm nervous about buying into TBT due to currency risk. If the Fed prints money to combat rising rates, this could hold TBT down for quite a while, and at the same time put pressure on the dollar. Do you think TBT is a good investment for those who don't earn money in dollars?

This is a puzzling question for me in relation to all US ETFs, actually. They provide a fantastic diversity of investment choices and are easy to trade. But currency risk is a significant deterrent, especially when the dollar has been recently strong.

[ThePythonicCow]

Re: Something special is gonna happen with :TBT

I'm with you on rates, but I'm nervous about buying into TBT due to currency risk.

TBT is one of those things I'd buy using limit orders. Figure out how low it might go if it got slammed down again. Right now it's at 48, and it got below 40 in late 2008. If we had another rush to the Dollar (say on some problems in Europe), it might get down there again. If it did, that seems like a Buy to me. So put in a limit order to buy at 40 and let that order sit there.

I find limit orders quite useful. For instance shortly after gold got up to $1200, I sold some of my holdings, expecting a downturn. I then put in a ladder of limit orders to repurchase at various lower prices around $1100 or so. Most of those orders have now triggered, but not all. It changes my psychology in a rather helpful way. Instead of trying to second guess Mr. Market and time the bottom, only to kick myself if I come in too late, or blame myself if I get in too early and it's still falling, rather I find that I'm happy when some of my orders have triggered and it keeps falling, for that means I will get even more, at an even better price. I regained some of my CEF position this way last Friday, when it fell briefly below 12.5, while I was still sleeping soundly in the morning.

This rather presumes you don't mind having some of your trading account sitting in cash, awaiting one of these orders to hit. Right now, that's fine by me, as I'm happy being long the Dollar in the short term (a few months, say.)

The flip side, limit sell orders, will work on the other side, to unload holdings, when one is mostly invested (whether that be long or short) and out of the Dollar.

[ST]

Re: Something special is gonna happen with :TBT

http://www.zerohedge.com/article/for...rst-time-years

Its a bomb and its ticking louder...tick tick tick boom !

TBT to rally hard !

Perhaps, but in my view its going to tank considerably long before it rallies. I would much rather purchase long out of the money calls on TLT. No one is expecting the asset destruction likely to come and its ripple effects around the globe. I think it will take many months if not a couple of years before TBT becomes a good long hold.

Consider that everyone and their dog is short the long treasury - if the asset deflation we expect transpires and it ripples around the globe and China is exposed for what it is, you want to be long, long bonds until gov'ts muster yet another peverse bailout - what will the political will be at that time to bring on even more debt burden?

This is all much more difficult to predict than it appears where timelines are concerned. The dollar and bond rally could be sustained for a long, long time and that is the only bet I am willing to take now, other than long dated puts on broader equity indices. Hedged? no. But mostly US cash and some money to options so that if bonds and the dollar rally on asset price deflation, I would do quite well. Take the timing somewhat out of it, by purchasing LEAPS.

[icm63]

Re: Something special is gonna happen with :TBT

Interesting post...

Lesson for the U.S.

While Greece is uniquely dysfunctional, there's a lesson here for any country with a heavy debt load, including Britain, Japan, and the U.S.: The bond market is treacherous. For now, investors are pouring money into the U.S. Treasury market as a safe refuge. But the U.S.'s ratio of total debt to GDP is likely to exceed 90% this year, making it more indebted even than Spain and Portugal. If global investors began to demand higher yields to compensate them for the risk of a U.S. default, that would vastly increase U.S. borrowing costs. Higher debt service would worsen the nation's budget imbalance and possibly precipitate the very crisis that investors fear most. A long shot, to be sure, but not impossible.

source:http://www.businessweek.com/magazine...7018421438.htm