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ProShares UltraShort 20+ Year Treasury Message Board

  • mooseonaplane mooseonaplane Aug 27, 2010 3:42 PM Flag

    DEAD CAT BOUNCE!

    This move has all the earmarks of a dead cat bounce, large one day spike after weeks of punishing downside, it won't last and here is why.

    Bernanke is out of bullets...nothing left in his tool box has any relative meaning as far as lifting the US economy out of it's doldrums...

    Fiscal stimulus is beyond reach because of the record deficits...

    State & Local Govts will continue to cut budgets and jobs...

    TBT will follow the economy and the economic fortunes are predicated on two main drivers: The health of employment and housing.

    The majority of jobs are created by mid/small size businesses. They are in no position to hire and will not be for years to come.

    The housing market is quickly entering a second leg down and for good reason. One in ten mortgages now face foreclosure with plenty more on the way.

    Unemployment will remain elevated for years to come, pushing more and more into foreclosure.

    We have the highest level of unoccupied homes on record.

    Many more homeowners are praying they can unload their homes soon. They can no longer afford the maintenance, taxes, et cetera.

    As more and more homes values are pushed underwater by this tsunami of foreclosure, dilapidated abodes, shadow inventory....banks will see a spike in letters with keys inside.

    Sick banks will be in no position to lend, focusing solely on rebuilding capital the result of another round of defaults.

    Most Americans biggest asset is their home, nothing reduces consumer spending more than to have that asset fall in value another 20%.

    It took 30 years to create this debacle, born of ludicrous monetary policy, easy credit, lax regulations and the criminal activities of our largest financial institutions...it will take another decade to begin to heal.

    The result of this madness...overcapacity in nearly every sector of the economy, residential and commercial real estate.

    A false economy built on lies and debt...plenty more deleveraging and deflation to come. It's going to get ugly, very. TBT going much lower in the coming months.

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    • For all of the same reasons that you think yields will go to 0 I think yields will rise dramatically. Mainly, if housing and commercial real estate prices continue to fall then banks will be in big trouble.

      The gov't has no choice but to try and create inflation by printing and encouraging people to refi and cause cash to run in the streets. People will have lots more cash in the next few months from the refinance savings. If someone saves 500 bucks a month on their mortgage payment they will spend it on something else, this will be a boost to the economy.

      Most of the things you point out are current indicators not what will happen in the future. The serious delinquency rate for residential mortgages has fallen for 3 months consecutively. About 1/3 of homeowners own their home free and clear. Lending standards are extremely tight and will loosen as soon as things begin to turn. The gov't will do everything in their power to cause inflation: printing, jibberish, war and if need be eventually a currency devaluation. Then the banks will be glad they have more real estate net worth than all individuals combined.

      Don't bet against our gov't and our banks, you will lose. Our gov't is dying for some inflation here and will do what it takes to get some.

    • Remember how in the end of last year, everybody was convinced that interest rate have no place to go but up?
      Check messages from this time. It is enlightening

    • You forgot to add the massive tax increases heading our way starting next year. All tax brackets go up in 2011. Then another wave of Obamacare taxes kicks in as well. A friend of mine who is a small business owner said his medical insurance just went up 60% (presumably to account for Obamacare). I'm wondering how my company is going to handle that. I guess I'll find out this November during renewal. My guess is that I'm going to take a big hit in my contribution and the company will as well. Is it any surprise why no one wants to hire???

    • Wooosssssshhhhhhhhhhhhhhh


      Er, what was that noise?


      That was the sound of one more thing going over Moosewithnobrain's head.

      LOL

    • You are right: there is no point you continuing to respond to my posts. Sorry Mr Moosewithnobrain, the future will show which one of us is right.

      ps
      *********************************************************************
      The bigger more important issue that continues to fly over your head is why rates are that low.

      How many times have one in ten mortgages been in default?

      How many times has the real unemployment rate stood at 15%?

      How many times has private sector employment growth been zero for a decade?

      How many times has factory utilization been below 70%?
      *********************************************************

      I understand the flawed logic in your thinking.....but you simply can't see the wood for the trees.....There are many third rate economists who are arguing that under such circumstances the long bond could sit at 2.0 - 2.5%.....but they, like you, are missing the fundamental point.... A load of hopeless lemmings and some naughty traders, helped by the brutally uninformed talking heads at Bloomberg TV etc, have pushed the yields low so as the brain-dead fools such you jump on the band wagon just as the tide starts to go out.

      The long bond yield is going north of 7%. Last week was the low -- yields in the US will never go lower than they were last week, EVER. The future will prove me right whilst the future will see you as another statistic in the personal bankruptcy courts. You will be left scratching your head, holding a slip of paper and, in a forlorn Homer Simpson voice, shouting DOH!

    • Lucy, your lack of intelligence & critical thinking skills, your inane childish responses, your complete inability to absorb information of merit and zero grasp of the subject matter at hand makes it impossible & pointless to respond to your posts any longer.

      It's like I a conversing with a third grader with a learning disability.

      Now you just keep one starring my posts if that makes you feel better with your various yahoo aliases but it doesn't change the fact i exposed you as a buffoon.

      But in closing, you ask me in your unique English "How many times have we had zero overnight rates in you 10 year period?"

      The bigger more important issue that continues to fly over your head is why rates are that low.

      How many times have one in ten mortgages been in default?

      How many times has the real unemployment rate stood at 15%?

      How many times has private sector employment growth been zero for a decade?

      How many times has factory utilization been below 70%?

      How many times has our economy nearly gone under, in the process of deleveraging probably the greatest financial bubble in our history?

      I could go on but what is the point with you?

      But the broad premise is...this fiasco was 30 years in the making born of greed, insane monetary policies, complete failure of our regulatory bodies, the criminal activities of both our rating agencies and largest financial institutions...

      The end result was a false economy built on debt & lies...the deleveraging has just begun, it will take many years to resolve, the Fed can do very little to stop it.

      The yield curve will continue to flatten in the future with the long end seeing the largest adjustment.

      The 30 yr treasury could very well see 2.5% before this travesty comes to any form of resolution.

    • Fact of the matter is life will go on and everything will go back to normal in the next couple years. I think the Fed is doing the best they can and it shows that they have learned from previous crises. The economy will start to grow when businesses are less fearful, have deleveraged, or have more clarity on taxes, health care, etc... BAHHHH. Tell me that in 2 months. By the end of 2012, this country will be drowning in so much debt that no one wants, that we will have hyperinflation the likes of which have never been seen in the history of the world. Labor costs are not going to be the reason either.

    • LOL.....what puerile nonsense. If you are going to buy the long bond based on the fact that 'The past decade the avg spread between the yield on Fed Funds and the 10 yr bond has been 160 bps and 210 bps for the 30 yr.' then you are even more stupid than you come across as being...Er, how many times have we had zero overnight rates in you 10 year period? God, you are one confused puppy....You should stick to Readers Digest, as so obsessed with it----You will lose heavily if you trade based on such a total lack of understanding about what is really happening.

      You should change you name to -Moosewithoutabrain

    • How ironic you Lucy complaining of moronic arguments.

      Another lesson in bond pricing just for you, readers digest version.

      The past decade the avg spread between the yield on Fed Funds and the 10 yr bond has been 160 bps and 210 bps for the 30 yr.

      I will do the math for you...that makes it plausible the 30 yr treasury yield could easily fall below 2.5%

      Now where does that put TBT? 50 before Xmas right?

      You get it alright Lucy...please stop your posts embarrassing for all.

    • None of those proposals listed will make a difference they certainly wouldn't spike rates, in fact they would only serve to push longer term treasury rates lower sending TBT's price down.

      1) I suspect Bernanke will be forced to implement QE2 in the coming months as the economic numbers continue to deteriorate. Most likely purchasing well over a $Trillion in longer dated maturities. But once again he will only be pushing on a string.

      Why would anyone borrow to purchase an asset that continues to fall in value at any interest rate?

      2) Modify communications...that's a good one.

      3) Reduce interest on reserves. Banks are only receiving what .25 percent as it is. You think lowering rates will force them to remove their funds and lend????

      4) Top secret...can't wait

      Bottom line Ben has been trying unsuccessfully for 3 years now to reinflate the economy...you think these weak proposals will work. The FED is out of bullets.

      Do your homework Lucy before you type your nonsense.

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TBT
31.42-0.08(-0.25%)Jul 26 4:00 PMEDT