Ghost of Cutten
Registered: Aug 2009
06-05-12 12:26 PM
Quote from atrocious:
It's becoming fashionable to ridicule early top pickers and throw out 1% targets much like the entire CNBC fast money crew said $200 oil was a lock in 2008 about a week before it topped. Wish I had the video.
Food for thought:
I heard multiple times this weekend that bonds are being bought without regard to price/yield, just capital preservation. Why then is the long end blowing out, when you can preserve capital in 3 month bills still trading at a positive nominal yield?
I also hear "don't fight the fed" as justification for owning the long end. Well, considering 1.40% on the 10's is clearly a deflationary doomsday yield, you have to ask yourself who is fighting the fed when the chairman said he will do everything in his power to prevent a deflationary spiral.
Agree, Treasuries are now a serious risk to capital preservation, you could lose 10-20% in the long end if yields back up.
However, they are in a bull market so I don't think shorting them makes sense until they get into parabolic blowoff mode.