Still Smart to Bet Against Treasury Bonds

From Barron's

THURSDAY, JULY 9, 2009

HULBERT ON MARKETS

Though they've fallen in price, these long-term investments remain a poor choice.

What's the bottom line? It was perhaps best put by Dan Seiver, editor of the PAD System Report, and a visiting finance professor at San Diego State University, who late last year and early this year correctly forecast that the long Treasury bonds were going to plunge. Given how much lower those bonds are today than earlier this year, he said, they are today perhaps not the "screaming sell" they were then. But they nevertheless remain a sell.

China students laughed at Geithner

What was it?

U.S. Treasury Secretary Tim Geithner told a crowd of students in Beijing that the trillion dollars worth of U.S. government bonds the Chinese hold are "very safe."

The Students laughed....they know better.

U.S. Fixed Income: Maintain Long Duration But Avoid Treasurys

From BCA
Investors should maintain long duration positions in non-government sectors, particularly in corporate bonds.

Dollar Is Dirt, Treasuries Are Toast, AAA Is Gone: Mark Gilbert

...."the sound of inevitability".

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May 21 (Bloomberg) -- The odds on the dollar, Treasury bonds and the U.S. government’s AAA grade all heading for the dumpster are shortening.

While currency forecasting is a mug’s game and bond yields can’t quite decide whether to dive toward deflation or surge in anticipation of inflation, every time I think about that credit rating, I hear what Agent Smith in the “Matrix” movies called “the sound of inevitability.”

Gross Reduces U.S. Debt for First Time Since January

May 11 (Bloomberg) -- Bill Gross, manager of Pacific Investment Management Co.’s $150 billion Total Return Fund, reduced his holdings of U.S. government-related debt last month for the first time since January.

If You Don't Watch This Chart, You're Going to Lose Money

Long bond yields keep on increasing and bond prices are falling.

Yields on the 30 year bonds have increased from 2.5% to over 4% in past few months. Wow!

Demand for funding government deficits are high and will push rates up.

US Treasury Needs to Raise more Cash

I wonder which way interest rates will be going. US Treasury needs to raise more cash as tax revenues fall.

“Tax receipts are just collapsing. [The need to sell more debt] is a big issue in the Treasury market and it is ongoing. The surging budget deficit is the primary cause.” Head Stamford UBS Securities interest-rate strategist Chris Ahrens.

Next Bubble to Pop - US Bonds? NYT

Treasuries bear risk, in particular, the risk that flows from crowd psychology. Last month, in his annual letter to shareholders Warren Buffett wrote: “When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.”