Bond Market

[Bullitt]

Yields getting hammered again this week, but the genius gurus claim it's only because of, "the panic overseas." Duhh. US Treasuries are a safe haven and now that US markets are dropping, there are even more safety seekers on the prowl.

What is going to happen when all that money that is coming out of the Australian Dollar and Canadian Dollar starts looking for a home? Where do you think it will go?

 

[Bullitt]

Same story, yields are dropping. Why doesn't anybody hold the gurus accountable in early 2010 who claimed the sure fire trade was short treasuries?

I am a deflation bull.

TBT (inverse US Treasuries) is down 28% YTD. 28% folks! This should be one reason of hundreds why CNBC will never, ever help individual investors.

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[Boghie]

Bullitt,

Will deflation be good for bonds (F Fund) - at least in the short term?

Or, will it hurt the corporate and government entities so much that those bond funds get hammered?

 

[Bullitt]

Sorry for the delayed response Boghie. Yes, deflation is good for bonds.... Treasury bonds that is. In an uptrending market you want to be in High Yield or Junk Bonds because a rising tide lifts all boats. I sold out of all my TLT this past week as it went kind of parabolic there at the open two days in a row. So even though I still am a "deflationist" my next trade will be the inflation trade since the market is always looking forward.

With that, looks like the 30 year T-Bill put in a bearish shooting star on the weekly chart today. Could be a few things:

1. Bullish for the market
2. A bottom in yields
3. Extremely negative for housing (as if it can get any worse)
4. Big money (ie: Nations) knowing that the emperor has no clothes (aka, the fed is out of ammo) and there is not enough ammo to fend off the tsunami of deadbeats who are defaulting on homes
5. Not even bonds are safe anymore.
6. Or it could be nothing at all

One thing to remember with bonds. Yield is a piece of the puzzle. Pundits, crooks and brokers say, "Investors should wait until the yield is more attractive." Who cares? You want to buy anything when the yield is contracting, not expanding. Expanding yields mean your equity is going down! Buy uptrends, take the dividends or interest payments as gravy and don't let your broker go home with a Cialis like smile after he coaxed you into buying something solely for yield.

It is absolutely incredible that nobody has held the crooks accountable who were crying on the top of a mountain in Jan 2010 to sell or short Treasuries or to buy TBT. How do these people still even have a job? Maybe they don't. I haven't heard many calls from a megaphone about the short of the century lately. Then again, I've been out of the game for two years now since I've boycotted the Comedic Network of Boobs and Cramer.