The Japanese hold most of their money invested in Treasury's in the short end of the curve, so the long bond going below 6.00% isn't really relevant to the Japs selling bonds. What is relevant is that they(the Japs) sell their short term notes and bills and therefore the short end of the curve goes up in yield, as they dump their short term holdings. The long end goes down as the flight to quality bond jockeys attempt to take advantage of any trend they can to make a quick buck, pushing it to the limit and beyond(you are right, they can play chicken with their money better than a Mack truck going 100 MPH down a highway). The logic is the slow down in economic growth , but what about the ballooning trade deficit(the other side of the equatuion). No, this isnt a logical game, its just a game for money making quick buck one tick Johnny balls to the wall who cares short term whatevers out there artists. My point is that there aint much more room to play the game on these rules unless the fed cooperates-therefore, the risk reward in long bonds at this moment in time seems pretty stupid from the long side. But, hey, what do I know.
I got my money in oil, diamonds, and cheap junior gold mining stocks with sound financing and excellent properties. It is just a risk reward I cant pass up. I look at the wealth destruction which has taken place on the Vancouver stock exchange and shake my head and figure there has got to be opportunity in it somewhere. |
