Just want to get consensus here.
50bp on the 20 yr either way calculates to about 6% at these leaves.
50bp on the 20 yr either way calculates to about 6% at these leaves.
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US Downgrade: How much will 20-30 yr be down? (or up)
- Thread starter scriabinop23
- Start date
Bond traders won't know what to do except to buy more bonds. This is a real paradigm shift. Uncle Ben will not allow yields to rise because that would stymie a economic recovery that was already on life support.
I think bonds close up.
I think bonds close up.
Maybe so, but long term, bond traders need money to buy more bonds. Where will it come from?Quote from bond_trad3r:
Bond traders won't know what to do except to buy more bonds. This is a real paradigm shift. Uncle Ben will not allow yields to rise because that would stymie a economic recovery that was already on life support.
I think bonds close up.
Low rates were not a concern when there was no downside risk. But now it's even lower rates with some down side risk.
If I'm getting 2.5% I want virtually no risk.
The funny thing is, maybe instead of buying bonds I will just open a restaurant or buy an apartment building. If nothing is without risk anymore, at least I have a chance.
And that's the kind of thinking that could turn things back around.
In which case, bonds would go down.
yeah, I'm confused. Did S&P downgrade our debt or our stock market?Quote from bond_trad3r:
According to the girl on TV (who knows way more about make up and hairstyles than I ever will) the mkt went down because of the downgrade.
So how come if I'm short bonds and long stocks I'm still losing money?
If I sell bonds because they are downgraded, what am I gonna do with the money?
I don't know, buy stocks?
For USTs a downgrade is a meaningless sideshow. For risky assets, such as equities, the mkt perceives the downgrade to be a very meaningful piece of news (or just a final straw, as the case may be). So sell them stocks and buy them bonds.Quote from oldtime:
yeah, I'm confused. Did S&P downgrade our debt or our stock market?
According to the girl on TV (who knows way more about make up and hairstyles than I ever will) the mkt went down because of the downgrade.
So how come if I'm short bonds and long stocks I'm still losing money?
If I sell bonds because they are downgraded, what am I gonna do with the money?
I don't know, buy stocks?
well Martin, you may be right, I just got tired of loaning the US Government my money since I wasn't getting much for it in return.Quote from Martinghoul:
For USTs a downgrade is a meaningless sideshow. For risky assets, such as equities, the mkt perceives the downgrade to be a very meaningful piece of news (or just a final straw, as the case may be). So sell them stocks and buy them bonds.
I'll loan them money if you promise to pay me more than I paid for my bonds.
If you want to buy anymore let me know, I want to sell and do something else with my money. Just what I haven't decided yet.
i am long TBT. hurting