The real reason treasuries are falling

I was long the 30 year in early November through December because the market was anticipating quantitative easing. That trade is over, and now it is a bearish scenario.
 
Quote from RiceRocket:

I was long the 30 year in early November through December because the market was anticipating quantitative easing. That trade is over, and now it is a bearish scenario.
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I was not singling out any particular person, and I think you are a knowledgeable person. I was just remembering all the bullishness back then, and the explanation given.

To me it was common sense: yields below 2% would not stay long particularly in a situation of credit problems.

Bonds also went down because money went back to stock market. If we have a bear move in stocks, we would see bonds rising again.

My sense is that we will be in a range bound markets for sometime.

RR: you are doing a good work. Keep posting.
 
Quote from RiceRocket:

I agree that the fed can prop up treasuries, but it will be at the expense of the dollar. They are trying to dam the colorado river with a twig. The flow will eventually find a path no matter what they do.

A good trade is short the dollar, short treasuries. Heads, I win, tails you lose trade.
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what currency to short against though? with the US fucked, much of the world becomes at least equally fucked. the Euro and Eurozone has many issues that make it unattractive to me. i've been long Aussie vs dollar for a few months, i've looked into norway, but haven't taken the step tp open an acct with someone who provides this cross. long Yuan seems logical, but it's not exactly easy to trade. that, couple with the fact that more the foreseeable future, it is very much in China's interests to keep the peg in the current range. not being a free floating currency, that's really all that matters.

so... what are you long vs the US$?
 
I just go straight to the dollar index futures, IDX. I don't like to try to pick a single currency cross. I think the dollar will fall among all the major pairs more or less netting to a loss over time. I'm short from 87 on IDXM9.
 
I just want to say that you're one of only a dozen or two people on this message board who I intellectually respect-not to say I disrespect tens of thousands-but your opinions are worth noting. Your bullishness last fall was an awesome call because you did what most of us hate doing-you bought strength. Now I see you're VERY flexible and open to evolving information to boot. You've got some really good qualities going for you....



Quote from RiceRocket:

I was long the 30 year in early November through December because the market was anticipating quantitative easing. That trade is over, and now it is a bearish scenario.
More...
 
Quote from RiceRocket:

I just go straight to the dollar index futures, IDX. I don't like to try to pick a single currency cross. I think the dollar will fall among all the major pairs more or less netting to a loss over time. I'm short from 87 on IDXM9.
More...

thanks. funny, for whatever reason, it has never occurred to me to short against the index. worth looking into now that the obvious is once again obvious to my aging mind!
 
Quote from RiceRocket:

It doesn't look like China stopped buying treasuries in Jan or Feb to me. <a href="http://www.treas.gov/tic/mfh.txt">Tic data up to Feb</a>

Dec 08: 727.4
Jan 09: 739.6
Feb 09: 744.2
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The trade deficit with China is about $20 billion per month, so it looks like the words "sharply curtailed" are meaning they are only buying about 1/4 that, which means they must be lending or spending the rest in other markets.
 
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