uh oh... quote At 1127 GMT, two-year T-Notes were down 2/32 since the New York close on Friday and yielding 4.398 percent. The 10-year T-Note was down 5/32 and yielding 4.401 percent. The five-year T-Note was down 3/32 and yielding 4.343 percent, while the ultra-long T-Bond was down 9/32 and yielding 4.566 percent. quote http://news.yahoo.com/s/nm/markets_...MEDW7oF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl http://news.google.com/news?q=Ten-y...-year&hl=en&lr=&safe=off&sa=N&tab=nn&oi=newsr
Wouldn't read too much into it.... YET... Wait for the volume to get back in, and see if we get a bounce or a break... It's suprising how things are happening faster than I had expected, I had timed all of this to happen end of Jan, but seems to have come a month early...
TUH06 on TS. Anybody know the TS YIELD symbol? I have 30's, 10's etc....but no 2 YR. It will probably save me money! I might try some new NOB HOB or TED HED Spread.
O'yes, the yield curve, many say look out below, others say no BIGGIE. I say the yield curve is the conundrum of next year 2006 and possibly far, far beyond. It is no mystery that the long end of the curve has been kept down with the foreign central banks buying the bonds for whatever reasons. The reasons are mox-nix, it's the buying that counts. Alan lowered the snot out of the short end to at first fight off DEFLATION a couple years back, (created demand) and fought off what then was a slight recession (official or not, again mox-nix). Forget about any political aspects of the Fed and elections, when we are concerned about making money we just go with the flow and let the talking heads argue about the politics of the Fed. So now the economy has behaved better and the Fed has been raising the short end. The stock mkt bubble is history, but the low, low rates created a rather robust housing mkt. So robust in fact that even Alan showed concerns. Ok, here is the "conundrum" for 2006 and beyond. Many say the Fed stops at 4 1/2 %, round number. But the rate is not the real concern, the Fed will do as it sees fit, "HELO BEN" is coming and we will see what he has under the propeller hat of his when the time comes. BUT, THE BIG BUT......What happens when the rest of the world decides to use their extra cash at home rather than loaning it to the USA? How far away is that going to happen? (and it will). We already are seeing other worldly stock mkts outperform the USA mkts, if that continues it will surely be a factor in deciding where to place the extra cash. So the question comes up again...Are the long rates staying low because of a slowing economy or because the foreigners are holding down our fort? If the economy slows on its own, then the rates will go lower yet, that stops this years temporary rally in the Dollar. But how about this scenario....The other nations economies do really well, so well in fact that they will need and use their savings at home. They quit buying our bonds and notes. These last couple of years have seen low rates as our econ has not seen a slowdown, very unusual. Anyone see rates continuing to go well past 5 %? Well if the others stop buying and picture this>.....rates in this country going up further than anyone expects as we are forced to raise rates in face of a slowing economy and a falling Dollar. A reverse of the situation with the lowering of the rates to support the housing party and the supporting from others to support our unnatural buying habits. Next year could be very interesting in the mkts, indeed. How long will be have such luck in the face of the facts? Keep some powder dry, be prepared for some real dandy days of WIDE SWINGS, of you are short of trading cash ( i suggest the ES, naz, ) mortgage the house, wife, kids and your future on 2006. Do not be stubborn, use STOPS and be brave, courage will rule in 2006......Alan is retiring before the fireworks start, but surely he is wise to the coming events.