1. The economy is improving
2. Rates are rising
3. QE2 and fiscal stimulus should cement these trends
4. Institutional investors recognize what is going on and are fleeing the bond market (e.g., redemptions from PIMCO Total Return Fund.)
5. Will the Sovereigns that hold much of our debt (China, Japan, GB, Saudi) want to be left holding the bag?
5. The Fed can keep short term rates low but cannot control the price of long bonds...
TBT to the moon?
Of course... the long bond is rising BECAUSE the economy is healing (thank you, Fed & Obama, for doing something) and equities are a better place to be.
Now, when it gets to the moon -- and treasuries yield over, say, 8% (pls do not hold me to that number, I pulled it out of my ear)-- that is a different story... Obviously, at some point, the many imbalances come home to roost and/or the economy over-heats -- but that is a loooong way off.
Cool. Thanks. Ya got me!
I have a thing for wine, cheese and August off. Otherwise...
Arwen is my pal, so can*t tell you what I really think. LOL!
So here is the last of my French (the clean stuff), learned at the toll booths between Nice and Perpignan:
Bon Jour. 50 Euro. Merci. Au revoir!
Genial, super, fantastique!
What is Marc Faber saying about emerging markets? I have a bunch of retirement money in an emerging market fund... good place to be until recently... but I think a good place to be for longer term, N*est pas?
You have a nice selection of names as well. Good choices. Yes possibly an upper level consolidation is occurring. You are probably right. There is really nowhere else to put money but in stocks anyway. As we agree, bonds are headed south. I'm agreeing with Marc Faber about emerging economies, although many American companies essentially make there money with sales to emerging markets. I just like to buy growth stocks when they are reasonable since I hold for years. The data shows that around 30 p/e is the max you can pay if you are holding for 5 years+. Of course if you are a short term trader then valuation doesn't matter. It's just not my personality to be so short term. There is also the higher taxes on short term gains. I have done ok with my approach. I'm certainly beating the indexes over the last 10 years.
I completely agree with your thesis on long bonds. I just think there are better ways to make higher returns. I have occasionally used them as with TBT. From now on, I'm just stick with individual stocks.
Excuse my incorrect use of "your" when it should have been "you're"
Main point.....because of the issues of decay with these leveraged etf's, they can't really "go to the moon". I'm out for now.