Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (260108)	7/12/2010 11:51:58 AM
From: TH	Respond to of 306849

EJ, You are not missing anything with respect to my question. With respect to short term trading, I was interested in what rate on the ten year would signify a migration from buying bonds and back to equities. For me the meaningful break would be in the 3.06/3.09 range. Until then, I assume that bonds will continue to rally. If we break that, I could see the ten back at 3.18 very quickly. As for selling the long end, this could happen if there is a currency crisis. At some point the game of musical chairs will end, but I'm not yet predicting that in the near term. I'm actually short term bullish on long bonds, as I believe the rally is just technical and the macro drivers are indicating contraction and thus a positive for bonds. I have no timing for when the great bond rally ends, but the market will tell me. We have the great benefit of watching lots of other sovereign debt imploding before they get to our USDA Grade A stuff (and yea, I'm seriously joking). GT TH

To: Elroy Jetson who wrote (260108)	7/12/2010 2:57:48 PM
From: Skeeter Bug	Respond to of 306849

>>if there is an economical method to hedge this rate spread I'm sure they already have.<< yes, being TBTF with an unlimited sovereign back stop. -ng- >>I don't see an obvious trigger for a rise in long-term bond yields and a decline in bond prices for another six to eight years. What am I missing?<< the realization america will never pay its debt, perhaps? i see deflation coming hard as that is the result of our current monetary system. now, if they change it, though, i'm all ears. until then, deflation, here we come.