Don't overstay the bond party....it is winding down fast.
Well, at some point the more intelligent will realize that near zero rate bonds are not a good investment, correct? Where will the demand come from? The FED has already bloated its balance sheet with bonds. More leveraged than Lehman was. The answer to debt is more leverage? James Grant my hero says flee bonds at light speed.
Financial Engineering: FED creates money out of thin air, driving rates to near zero, leading corporations to borrow money at close to zero, using proceeds to buy back their stock. A magic circle. But now the FED balance sheet is bloated & overleveraged. The whole house of cards ends soon. Look at the cratering of bonds today.
FED creates money out of thin air, buys treasury debt, driving rates to record lows. Corporations take advantage of ultra low rates and borrow, using the funds to buy back their stock. A magic circle. But now the FED balance sheet appears to be bloated and overleveraged, as James Grant & others observe, and foreigners and other investors may be less willing to purchase dollar bonds at absurdly low rates. As long as the dollar continues strong, this may continue for a bit. But if the dollar hits a rough patch, the stampede for the exits may be lemming-like.
Enough for me. The rest are momo boys just following trends. The Big Bond Bull Market that started 33 years ago will be followed by a horrendous bear market. Rates may not reach the levels of 1981, but 8% seems reachable in a few years.
Bought a few cheap KOL calls. Not betting the farm, just a little play money.
That being said, coal stocks could bounce a bit once tax loss selling is over. Bought a few calls in KOL today to play the group for a Jan rally. Will be out of it if nothing materializes.
I fully expect a tape painting rally the first week of January. By mid January and certainly by February though the skid in bonds as well as stocks may be in full drive. If the skid starts right away, I'll be surprised and even more bearish.
"We'll be stuck in this low range of interest rates for another decade or more". Marenkov, predicting economic events 10 years out, or even one year out, seems an act of considerable hubris. If someone in 1977 had predicted that treasury rates would exceed 15% by 1981, the person would have been laughed at. With rates now plumbing their 50 year lows, I think the safer bet is that something will change, that a perturbing event will shake things up. I don't know what that will be--foreign selling, investor selling, an inflation scare, whatever. With rates now at levels last seen in the 1950s, or even the Great Depression, I sleep better in the bear camp. Change is on my side.
Don't buy it--why does Germany want its gold back? They know something good is going to happen to pog.
Gathering mo. The tape doesn't lie...some big blocks were bought on rising prices, especially mid day.
I hope it's "activist" investor(s)---get this pup up.
Huge big blocks on rising price.
Someone is aggressively buying. The tape doesn't lie.
Mine is $111-114. A gentlemen's bet. Watch the Blodget interview--you may be less sanguine about your forcast.
From almost 16% on the long treasury to below 3% now--the greatest bond bull market in history, but now veeerrrrrrrrrry long in the tooth for sure.