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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (4177)	12/30/2003 3:14:47 PM
From: Real Man	Respond to of 110194

Yep. I think it's a bit too early to short long treasuries. Not until the trend line currently supporting them is broken. Then again, with credit market blow-up, one could find better bonds to short. Some of these bonds may never be repaid. US treasury will be the last to default.

To: Crimson Ghost who wrote (4177)	12/30/2003 3:32:46 PM
From: yard_man	Read Replies (1) \| Respond to of 110194

>>Obviously between Mish and me<< you and a bunch of others are betting on higher rates, Fillmore -- frankly, it is consensus and not just among gloom and doomers. Do you know what the ratio of bond bear to bulls is at Rydex??

To: Crimson Ghost who wrote (4177)	12/30/2003 5:51:51 PM
From: mishedlo	Respond to of 110194

I for one am maintaining my short position in the long bond. Interesting that treasuries are under pressure today despite weaker than expected economic data and another drop in the buck (which has usually been bullish for bonds as foreign CBs hike purchases to prevent their currencies from rising even more.). Obviously between Mish and me, one of us going to be very wrong. Why does either of us have to be wrong? You are playing treasuries and I am playing FF rates. Notice that Eurodollar futures were UNCHANGED today in spite of a selloff in treasuries. I have stated many times I am not playing treasuries. I will consider going long near the top of the current range or short near the bottom of it. So far all we have done is NOTHING. Every time you treasury bears start looking for mammoth breakdowns, treasuries rally huge. I agree with Brian Reynolds, there is not much to like about treasuries at these levels. Unlike you, however, I see no need or resaon to bet against them. For such a bond bear to be sitting in junk seems preposterous. If interest rates are really going to rise as you expect, then junk should be getting killed. In short, I will NOT be wrong about treasuries at least with any or much money. I have not made or lost anything on them yet. If forced to make a play I would rather go long than short, given where we are right now. Personally, If I was you I would recommend taking profits here or soon. Get back in as close to 4.10 yield on TNX if you really have to get back in. This light volume treasury trading does not prove much to me, but the fact that it did not affect eurodollars at all today might be significant. If treasuries rally, I do expect Eurodollars to rally right along with them, but obviously not vice versa. Mish