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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (22716)	2/3/2005 12:06:11 AM
From: mishedlo	Respond to of 116555

Your assumption that China and Japan will continue financing huge US deficits come what may happens to be the consensus expectation. So you agree with this consensus but disagree with the modestly bearish bond consensus. Do you REALLY think the Asians will continue supporting gross US excesses come what may.? Perhaps there really is a Santa Claus after all. You are cleverly dodging my questions. Furthermore you are distorting what I said. Let me try it again this way. There are reasons for China to buy US treasuries and hold US $ reserves. I listed many of them. IF they stop doing so, there is every reason to believe demand for treasuries will pick up in the US. You did not give me any good reasons why your parlay of several things when I needed 1 of three things to happen in mine. As for "modestly bearish bond consensus", is that a joke? There are a handful of treasury bulls in the country, and perhaps I do not even count as I have no position and no one has heard of me anyway. Sentiment against treasuries is nearly at an all time high against. There is a 21 day short position (at normal volumes) in the Lehman treasury fund. We are innundated with 5 articles a day warning of doom in bonds and perhaps 1 every week or 2 from someone who likes them. BTW There has been a bear market in treasuries, in the 3 month ones going of for quite some time. While everyone has had their heads handed to them on 10 yrs, the 13wk treasuries have given up 150 bps. All it took was rolling stuff over every 3 months to collect. looking back, it seems like a no brainer. I am actually very bearish on bonds: Junk, corporates, and agency stuff. I am only bullish on long dated treasuries. Finally, I might add that there is an OVERWHELMING concensus that Japan and China will STOP buying US treasuries. We hear about it nearly every day if not 5 times a day. Mish