Been watching TBT for about a week and can't really tell if it leads or lags the market or if there is a correlation somehow. I know it trades according to yields on T-Bills which i guess is a measure of the fear in the financial system in some way, but for instance, did the sharp move down in TBT at 1:00 foreshadow the market semi-breaking its bullish daily trend around 1:50?
I trade TBT but not against SPY or any other ETF...although you could also short TLT.. Bottom line any time the 30yr yield approaches 3 % or lower....TBT is a screaming buy..because in the long run. People will not buy long term bonds...for a yield of 3 % or less...in my opinion this is a no brainer trade.
Agreed....TBT is the buy of a generation. I put a ton of it into various retirement accounts I own or control at around 42. I do not expect to sell it for many many years.
What makes you think Treasuries won't be a rerun of JGBs in the 90s and 2000s? Yields are low but I would not say it's a sure thing that they will soar and stay higher - to me it seems just as likely that we'll have deflation and yields trade back down again and maybe even make new lows.
What's going on now...is the treasury is printing money...and the more they print...the less attractive treasuries get..so when and if yields do go down...that would be an opportunity to get more of TBT...( Case in point worst case scenario -- U.S. goes bankrupt or the treasury defaults...people will dump treasuries...) So the worst case scenario makes TBT a buy...and if the economy does recover in the long run...rates go up...which makes TBT a buy as well..
I've wrestled with that question: deflation vs. inflation. I always come up with the same result: eventual inflation. Though chronic deficits do not theoretically have to lead to inflation, in practice they do. I suppose the simplest explanation for why has to do with human nature. I believe the days of the gold standard and Calvin Coolidge Economics are over. As a practical matter, I think one should consider that inflation is of great benefit to a government in debt to its neighbors, whereas deflation is disastrous for those with heavy debts. Surely the US will do whatever is needed to prevent significant deflation in the overall economy. It is far easier to print money than it is to increase productivity or decrease spending. The US will likely be forced to do the latter, but would find it extremely painful, far too painful in fact, to decrease spending enough to work its way out of its present dilemma.
Is the period button stuck on your keyboard? Go out and buy a new one for like $10. (Please disregard my comments if you have narcolepsy and kept dozing off while writing your post.)
10-YEAR 1.300 12/20/2018 99.74 / 1.33 -0.27 / .031 20:34 15-YEAR 1.800 12/20/2023 100.49 / 1.76 -0.274 / .023 20:37 20-YEAR 1.900 12/20/2028 100.17 / 1.89 -0.043 / .003 20:37 30-YEAR 2.400 09/20/2038 109.16 / 1.92 0.101 / -.005 20:34 Japan right now. 1.92% for 30 year. 3.5% looks like a great deal in comparison.