Crisis in long bonds is imminent

[tsptalk]

O’Shaughnessy: Crisis in long bonds is imminent

"There's a certain amount of weight that comes with calling an investment idea "once in a generation," but that's exactly how Jim O'Shaughnessy described his call to short bonds.

"Managing nearly $6 billion as chairman, CEO and CIO of O'Shaughnessy Asset Management, he cautioned investors in a recent note about an impending selloff in government bonds.

"Data suggests that the crisis in long bonds is coming," O'Shaughnessy wrote, adding that investors should "dramatically reduce bond maturity durations before it is too late."
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.... "There's a "generational buying opportunity in equities," he told CNBC's "Fast Money" on Tuesday."

More cnbc.com

 

[MrJohnRoss]

I agree with this call. The bond bubble is going to pop. It's no longer a matter of "if", just a matter of "when".

Those who aren't prepared are going to regret it, IMHO.

 

[Birchtree]

I feel like a damsel in distress - mom and pop just keep me waiting but when they roll it'll be parabolic. So I wait and I wait.

 

[tsptalk]

Anybody planning to sell short and hold bonds? You can do that by buying something like TBT.

 

[MrJohnRoss]

Anybody planning to sell short and hold bonds? You can do that by buying something like TBT.

...or for triple leverage, TMV.

I've watched TMV, but haven't pulled the trigger. I would use it as a short term trading vehicle. Maybe when the world goes to hell in a handbasket, I'll jump in with both feet.

 

[OBGibby]

What would the effect be on the F Fund if the bond bubble does indeed "pop"?

 

[burrocrat]

the f fund would sink like a stone, at least 10%. current f fund holders paid $98 for a bond that promises to return $100. those used bonds are tough to sell when an investor can go around the corner and buy a new bond for for $88.