Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Wyätt Gwyön who wrote (798)	2/27/2004 1:50:10 PM
From: mishedlo	of 116555

Heinz on Treasuries Date: Fri Feb 27 2004 12:58 trotsky (Apollo@bonds) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved 'not a bull market' - i dispute that on the grounds that the secular bond bull market that began in 1980 hasn't ended yet - there is ZERO evidence that it has. could it end when new highs are reached sometime this year? it's possible - but we don't know that yet for sure. admittedly the dollar is a bit of a wild card, but the Japanese Yen also lost over 50% against major currencies between '95 and '98, and their bond market still perfomed excellently...and deflation continued unabated as well. Date: Fri Feb 27 2004 12:48 trotsky (frustrated@bonds) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i don't buy the 'dearth of buyers' angle. most large institutional investors have spent most of 2003 divesting themselves from govt. bonds - iow, there are 100ds of billions of pent-up demand from that source alone. note also WHERE the money went: into junk and emerging market bons and equities. never before has exposure to credit and equity risk combined be as high as it is now - everybody from banks to pension funds, insurance cos. and hedge funds is neck-deep in funny sounding currencies and their bonds, with the slimmest imaginable risk premium margin left over. this is a house of cards that will come crashing down faster than you can say 'what happened?'. credit derivatives are so cheap right now that one can only conclude that NO-ONE is left over worrying about risk - just as the global debt bubble is reaching fresh heights of absurdity. guess where all that money will go when the WilE Coyote moment arrives - my guess is govt. bonds and gold.

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