30 years T`s chart. Who´s buying?

[GRG55]

Re: 30 years T`s chart. Who´s buying?

Welcome, RobertTheGood! You can see that your great interest (stay alive and prosper) is one that is evident in the postings of many others here. I hope that your first post will be followed by many more. I closed my position in TBT a few weeks ago. I now believe that the uneasy feeling that I had about TBT could be explained by the implementation of one of BBernanke's "tools:" Sell from the front of the shop, and buy from the back. In other words, the markets aren't functioning normally (the Invisible Hand of the Market has become Visible).

Love that Krugman look-alike...

[c1ue]

Re: 30 years T`s chart. Who´s buying?

Skurla,

I too believe the banks - who played the commodity game over the summer - are now playing the Treasury game.

Entry point is critical though - getting in too early is apt to cause a lot of discomfort.

The other part you're missing is that as Treasury yields go down, the Treasuries already being held increase in value. This is without even using leverage.

Of course at some point this dynamic is going to be broken: inflation restarts, dollar drops, etc etc.

That's why unless the 30 year is at zero, buying is not a slam dunk.

Even then if the dollar itself gets monkeyed with...

I posted a comparison of 30 year Treasuries @ 3% vs. 30 year Treasuries at 15%: the differential was 2600%. With 30 year rates now at 2.5-ish, the differential has now gone to 3300%.

Even vs. 10%, the present rate is 850% delta.

But the sharp spike is still going - check out the TLT graph for the last 3 months.