Shorting US bonds

Quote from mtzianos:

Hmm, you're looking for a "catalyst" to lead to higher interest rates. There have been MANY "catalysts" sofar, but somehow they've been ignored by "the market".

Perhaps "the market" seems to think ...
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You're confused. By definition 'catalysts' are not ignored by the market. If the market doesn't react to a catalyst, then it is not a catalyst.

The fundamental factors (excess liquidity, high real inflation) are often ignored for extended periods.

I think you would agree it may take some catalyst to wake the market up to the underlying factors which you've already discussed. At least a catalyst will hasten recognition ...

My point was a Bush appointment of Greenspan's successor, i.e. reduced relative confidence in the Fed's governorship, could prove a big time catalyst.
 
Quote from Walther:

Can you be more specific , why in two weeks ? I am not disagreeing btw.
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I don't have anything to add beyond the chart. I said two weeks 'cause when I posted we were experiencing some upside momentum that did correspond w/ seasonal strength. Obviously today we had a nice reversal ...
 
There's an old saying that technical traders don't make money because they don't believe their own charts. I've been doing that a lot lately. Should have gone long bonds on my last signal.
 
http://www.safehaven.com/article-2547.htm

This author expects short rates to top around 2.75% for 2005. This versus the popular estimate of 3.5%

I would tend to agree, since Fed just raised at a baby-step of 0.25% despite "hawkish" FOMC minutes about concerns over asset bubbles and tight spreads, which led some to believe they'd get more serious about it (start 0.5% hikes).

So, Fed could stop its tightening at very low levels (under 3% STIRs), which correlates well with the theory that US actually has no intention to fight inflation and that US will try to inflate away a large portion of its debt.
 
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