Investor Jim Rogers joined Bill Gross, who runs the world’s biggest bond fund, in warning that a rout that sent Treasuries to their biggest loss last month in almost a year probably isn’t over.
The list of bond bears is growing after Goldman Sachs Group Inc. and Wells Capital Management Inc. also voiced concern. While unemployment rose in January, Labor Department revisions showed job gains at the end of last year were higher than previously reported, increasing speculation the Federal Reserve will curtail its debt purchases this year. The Standard & Poor’s 500 Index rallied this month to approach a record.
“Everybody wants to be in equities,” said Hans Goetti, Singapore-based chief investment officer for Asia at Finaport Investment Intelligence, which manages the equivalent of $1.54 billion. “People are moving out of Treasuries.”
U.S. debt has handed investors a 0.9 percent loss this year as of yesterday, according to Bank of America Merrill Lynch indexes. It fell 1 percent in January, the steepest monthly loss since March.
The benchmark 10-year yield rose one basis point, or 0.01 percentage point, to 1.98 percent at 8:10 a.m. in New York, according to Bloomberg Bond Trader prices. The yield dropped to a record 1.38 percent in July, raising concern bonds don’t offer enough value.
Ten-year rates will increase to 2.25 percent by year-end, according to a Bloomberg survey of financial companies. That means an investor who bought today would suffer a 0.5 percent loss, data compiled by Bloomberg show.
“I’m short long-term government bonds,” betting the securities will fall, Rogers, the author of the book “Street Smarts,” said yesterday on Bloomberg Radio. “I plan to short more. That bull market, that’s a bubble.”
It isn’t the first time Rogers has predicted an end to the three-decade rally in U.S. government debt. In an interview with Bloomberg News on Oct. 28, 2009, he said Treasuries are the “next bubble in the making” when yields on the 10-year note were 3.42 percent.
These guys Jim Rogers & Bill Gross are biggest bond players. They lost their shirt the last few months. Every time they were on TV, they talked about the world collapse. Yes, they manage billion dollars, but the Fed is pumping $1.02 T last year.
I think estimate ~ Jan 2014 that is when the Fed is slowing down. I traded ZNGA, GMCR and BBRY and made good money the last few days. Cash out 1/2 and money back into the bank. You should join the team that make money.