When will this bubble finally burst? I say in the month of June barring any financial calamity.. Am I wrong?
yup Seems that buying 115's and selling 120's was the easiest way to make a million bucks in bonds this year.. when 115-04 gets taken out, it's goodbye, sayonara, adios... of course I could be wrong.. The downward reaction yesterday and the obscene volume tells me that the jig is up and that we could crater into the beginning of the summer.. but then again, I am just talking my position.. When is the bond market going to know that inflate or die is not just a theory, it's an actuality?
I agree. Looking at the last couple of years yields have risen until july for whatever reason. I expect the 115 to be taken out. Im through trading it. buy some puts. If we really get going we could really blow some people out
But if the fed decides to buy the long end as part of an "anti deflation" strategy, I wouldn't hold my breath for yields to reflect reality. Instead, suspect that there will be a return of 'risk premia' into the market. I've been long bonds overall (in the retirement portfolio) and have kicked myself for not buying the long bond at 5.20 yield last summer. Hedged with appropriate inflationary instruments but could see both appreciating simultaneously. Or, perhaps, the reverse. Who knows. But I'm buying more 30yr at 5.25, insane as it may sound. If we're going into a true hyperinflation, its as bad as leaving it in cash anyway.
I just dont see that ever happening. They've already managed to bankrupt the airline industry. Way to go!