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

To: russwinter who wrote (44848)	11/6/2005 10:24:51 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

So I'm really preaching Treasury Direct. I have no extra cash to put in Treasuries, but I do sometimes have a cash balance in my brokerage account that fluctuates. I just checked Schwab's US Treasury money market where I have funds swept. They are 99% in ST US Treasuries. The rest is in cash. People should check their money market sweep accounts and make sure they have similar investments.

To: russwinter who wrote (44848)	11/6/2005 10:49:02 AM
From: loantech	Read Replies (1) \| Respond to of 110194

There will be no bull trade in the longer Treasury dates, and certainly not other paper, because rates are going to blow out even higher relative to shorter dates. In other words the yield curve is going widened but at higher rates especially 3 years on out.>>>>>>>>* Russ once again thanks for all the hard work. BTW things slowing more than a bit in the 4 retail home loan offices I am associated with. Russ I have read more than once gold climbs when rates climb as the dollar weakens and rates are raised to protect the flight from the dollar but gold goes up anyhow. Could you or anyone else* do a treasure or funds rate overlay with a chart and with gold prices or and the XAU from let's say 1975 to 1982 or 1985 and post it to see if this has an element of truth? Thanks in advance, tom

To: russwinter who wrote (44848)	11/6/2005 11:50:20 AM
From: mishedlo	Respond to of 110194

Russ, I still like the entire yield curve from 6 months to 5 years. There will not be anyone blown out in that range except possibly those leveraged heavily in futures. When I said the possibility that some bond bulls get wiped out I was referring to leverage in treasury futures. Unleveraged treasuries across the board even beyond 5 years are going to eventually prosper IMO whether or not there is a better entry point or not. Leverage in other bond investments outside of treasuries is going to be very painful for sure. Heck I think even non-leverage is going to be painful. I suspect some hedge funds are literally going to seize up over widening spreads in CDOs and CMOs. That is how I continue to see it. Look at the posts on my board. The whole world economy is slowing from the US to the UK to Australia. Everywhere but Japan and some sort of little uptick in the EU that must be some sort of mirage given the unrest in France, the UK, and Belgium. This inflation scare will turn into a deflation panic when housing collapses. Mish

To: russwinter who wrote (44848)	11/6/2005 6:27:06 PM
From: NOW	Respond to of 110194

great post Russ! Thanks

To: russwinter who wrote (44848)	11/6/2005 7:39:57 PM
From: UncleBigs	Respond to of 110194

Russ, excellent analysis and forecast. While I'm probably more of a deflationist that you are, everything you said is certainly plausible and well thought out. Appreciate the post.

To: russwinter who wrote (44848)	11/6/2005 7:49:47 PM
From: UncleBigs	Read Replies (2) \| Respond to of 110194

Russ, in your opinion, what is an optimal asset allocation for a portfolio designed to preserve capital but also preserve purchasing power? T-bills and short-term treasuries are fine but they are still a negative real rate of return after taxes and offer no protection to a cratering dollar should Bernanke go crazy. Even I bonds are a negative after tax real rate of return. It seems difficult to position a portfolio designed to grow at an after tax rate of return that exceeds inflation but that doesn't get crushed should deflation set in. For example, energy and metals equities will do great in an inflationary environment but could suffer devastating losses in a deflationary environment. Would be interested in your thoughts.