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

To: GST who wrote (100936)	2/2/2009 4:36:47 PM
From: gregor_us	6 Recommendations Respond to of 110194

Cheers. What's interesting is that despite the fact that January was one of the worst months ever for long-dated UK Gilts and US Treasuries, there is almost a zombie-like obsession with the belief that senior government bonds are a safe haven. And this, even after the UK! is telling us: not so. I wrote: The UK is currently an excellent test case for how much poison the government and the central bank can take on to their own balance sheets, before global investors react. But it gets better: even most people who now agree this is not a post-war recession, globally, but something much different are still trying to apply the post-war (risk-free) government bonds vs risk assets asset allocation model. How does Daniel Kahnemnan (Princeton) describe this situation? Paraphrasing, "You are climbing in the Alps, but, the map you are using is of the Pyranees. But you actually like having the comfort of the Pyranee map--even if you know it doesn't apply." en.wikipedia.org Well, you know my take: We need to get reacquainted with the term "government stock" for government bonds. It's just another piece of paper that's now being impaired. "The governments will have to put their balance sheets in play.." (Gross, McCulley, and El Erian of Pimco in Summer 2008). In play--indeed. G