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iShares Trust - iShares 20+ Year Treasury Bond ETF Message Board

  • rangetrader123 rangetrader123 Oct 10, 2012 11:32 AM Flag

    Treasuries should be tanking with a Romney win

    If Romney wins, the Fed loses dual mandate, treasuries can move down 20%. Why treasuries are not selling off, is a total mystery. Is there any logic out there.

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    • The way I see it TBT has to go up. Here's why. If Obama wins and Bernanke keeps printing money it is true that the fed might keep buying treasuries but it's doubtful that they would continue to expand their holdings of longterm treasuries since longterm debt carries the greatest risk and it would certainly lead to a ratings downgrade or a spike in credit default swaps. CDS's are like insurance on bonds. If CDS's go up then investors demand higher yield and lower prices. The fed is at the end of their rope. They're at a point where either the government starts calming the credit markets with fiscal reform or their cost of borrowing is going up.
      If Romney wins then that is the end of treasury purchases and traders exit stage right.
      The vice presidential debates should be a big catalyst and I expect Ryan to do very well since he knows the facts.

    • (1) Romney might not win. (2) If he did, he won't keep his promise to remove Bernanke. If he did, the new guy would do the same. They all were taught the same economic voodoo at school.

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