Quote from tradersboredom:
CORRECTION IF FED INTEREST RATE IS 10% ECONOMY IS BOOMING.
BONDS IS MOSTLY PRESERVATION OF CAPITAL AND IS IDLE CAPITAL.
RIGHT NOW BOND YIELDS IS SAME AS DIVIDENDS.
INTEREST RATES DOWN
BONDS GO UP.
BOND TRADING IS BORING TOO.
Quote from Rearden Metal:
I think you'd have figured this out without my help, since you're already looking in the right direction: <B>TBT (=ultra-short TLT) long is the play you're looking for.</b> I started buying this today in my IRA.
Hyperinflation tends to lag the printing presses by a couple years, so it could be a while before the investment bears much fruit... but TBT is sure to go parabolic (triple digits) before Obama's first term is up.
Quote from achilles28:
Once banks are saved, all bets are off.
It'll be a false recovery with high inflation, followed by jacked rates, and then the market, jobs and consumer gets flushed.
Everyone keeps forgetting the Debt Order of Creditors:
Banks
Inflation
Consumers
High inflation is far more destructive than the paltry deflation we've seen so far. If the Powers-That-Be allow a resumption of consumer borrowing, we're gonna see it.
The Optimists cite reflated wages to pay off Bubble Debt.
Guess what? Wages never got close to home prices last time (hence, the massive defaults). In order to get wages close to Bubble debt, future real estate will be 200-500% higher than it is now. Gas 8 bucks. Bread 5 Bucks. etc etc. And a whole new raft of suckers get locked in at new tops with more debt than before. Thats what a "Bubble" is. And we're headed into a even bigger one than the last!!
There's no way around it.
Reflating a new Bubble to "save" the last will be more destructive than the current Bubble !!!! Isn't that obvious?? Once its done, Volker will save the day and we're all gonna be fucked.
People have no idea how bad things will get if Bernacke doesn't nullify CDS and let Banks fail, right now.
Its all political. The 9 Trillion laid out thus far was more than sufficient to solve this debacle many times over, yet here we are.
Whether the Banks withhold credit indefinitely (deflation) or we go into massive inflation, the Treasury has made clear its motivations are driven purely by political interests - Ie. The Bankers.
The only reason why Banks are reflating a new Bubble is because they got caught on the wrong side of the last one!! When they're in the Black, the Hammer is gonna drop on rates and all the Perma-Bulls and Consumers are gonna be left pissing in the wind.
This thing is gonna end, and its gonna end badly.
Quote from tradersboredom:
the problem with the real estate bubble like many real estate bubbles was excessive 'speculation' with easy mortgages.
why were the banks lending money who can't afford the mortgages with 5% downpayment. mortgages downpayment needs to be 25% or more if the market price is inflated. banks need to be more conservative in lending practices.
the mortgage defaults are from job losses and from housing speculators or housing flippers.
Quote from Ivanovich:
Regarding TBT - and fully disclosing that I don't know much about ETFs - is there any disadvantage to using this ETF for the long term (say 5 years or so) and going long it now? I mean disadvantage in the method of shorting bonds...and the Lehman name - that doesn't mean too much, does it? Someone else just manages the ETF.
Quote from Ivanovich:
Regarding TBT - and fully disclosing that I don't know much about ETFs - is there any disadvantage to using this ETF for the long term (say 5 years or so) and going long it now? I mean disadvantage in the method of shorting bonds...and the Lehman name - that doesn't mean too much, does it? Someone else just manages the ETF.