Bonds 02 (Sep 10 - Aug 12)

Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jun 11, 2012 8:46 am

Weekly Review

Bonds. 1.64% versus 1.65% 10 year U.S. Treasury.

Premarket the 10 year bond was at 1.57% and showing a very solid gain on the session.

The week saw bonds give back the move from the prior week's worries about the jobs report propelled bonds to the upside.

This week they came back to test.

When Bernanke did not offer any more stimulus or reasons to buy bonds, they kind of stalled out.

They tried to move and bounce off a test of support. They just could not close it out on the day.

Still in position to move higher, however.


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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Sat Jun 16, 2012 8:05 am

What Are Bonds Worried About That Stocks Aren't? by Tyler Durden

Equity markets remain exuberantly willing to carry risk into the weekend on the "it's discounted" argument or the "Central Banks will save us" scenario.

However, it appears investors are more anxiously buying Treasury bonds into the weekend as safe-haven flows continue (and Spanish bond yields press back up to 7%) and Swiss 2Y rates hold at -32bps.

Euro strength on repatriation flows and stocks diverging from risk-assets in general make us nervous for this rally holding (especialy given the underperformance of financials from the open).

Treasury yields tumbling as stocks soar

but financials plunging...

http://www.zerohedge.com/news/what-are- ... ocks-arent
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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jun 18, 2012 8:39 am

Weekly Review

Bonds. 1.58% versus 1.63% 10 year US Treasury.

Bonds rallied in a decent move. Bonds are rallying again. It was a good and bad week for US auctions.

The bid-to-covers are not great. The indirect buyers were not great. We are having direct buyers, and it is either the Treasury buying its own stuff or someone buying on behalf of the Treasury. Maybe it is China. We will find out later.

We offered record lows at auction for the 10 year. There is demand for it as safety, no doubt.

It seems we just have to buy it because the US has a tremendous amount of debt and we have to help it out, too.

Bonds are poised to move higher, perhaps anticipating something from the ECB and something from the US Fed. There is a dichotomy.

If we get a lot of stimulus, that may quell the fears about Europe. Maybe some money comes out of US Treasuries and back over to the continent. Maybe.

If the Fed says it will buy, then bonds will go up, obviously, because it will be buying more bonds. That likely will not happen next week, so we will see if the bonds do break to the upside.

A lot of that will play upon what the election turns out to be and the ECB's response to that election.


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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jun 25, 2012 8:37 am

Weekly Review

Bonds. 1.67% versus 1.61% 10 year US Treasury.

Big losses as bonds fell below the 20 day EMA.

They did remain in the three week lateral move. Not too much of an issue.

The thing is, if there is no worry in the rest of the world, there is no need to run to safety in the US Treasury market.

If there is fear, you will see treasuries rally and yields decline.

There was not too much fear out there on Friday. There was not too much fear of the Fed buying either as bonds gave up fairly substantial ground on the 10 year.


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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Fri Jun 29, 2012 8:31 am

Frenzied buying of investment grade corporate bonds

Investors seem to have a bottomless appetite for investment grade (IG) corporate paper.

Issuers are coming to market to borrow money at ridiculously low rates.

Even for the longer maturities the spreads are 1-2% above the corresponding treasury yield. Here are some examples:
•Tyco: 10-year notes at Treasuries + 190bp
•Markel: 10-year notes at Treasuries + 225bp (this firm is BBB)
•John Deere: 10-year notes at Treasuries + 122bp
•Caterpillar: 10-year notes at Treasuries +110bp

People are lending to CAT at 2.7% for 10 years! Who is buying this paper? Institutional investors of course, but also mutual funds, and ETFs. The ETF situation is particularly scary because it is driving some of these low yields and should be viewed as short-term money.

Below is a chart of shares outstanding for LQD, the iShares IBOXX investment grade corporate bond ETF. This thing is now $22.3 billion in assets (growing rapidly as new money pours in), and Larry Fink is opening the Champagne - again.

LQD paid out 1.7% in dividends YTD (3.4% annualized) and investors can't get enough of it.

People are betting that rates/spreads will go down even further and they will get capital appreciation on top of the crummy interest income.

This looks like another crowded trade that is not going to end well.

http://soberlook.com/2012/06/frenzied-b ... grade.html
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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jul 02, 2012 6:37 am

Weekly Review

Bonds. 1.65% versus 1.59%

10 year US Treasury. Bonds tanked.

A big drop in bonds as you would expect. Overall they held up fairly well, however.


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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Sun Jul 08, 2012 2:59 pm

TOL:-

All the "experts" are saying that money would be flowing out of Bonds soon into Equities, especially Dividend Stocks.
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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jul 09, 2012 6:41 am

How to Survive the Coming Bond Bubble Collapse by Steve McDonald

There’s a huge opportunity coming in bonds. It won’t look like an opportunity to most; the press will actually call it a bust.

But, with the right planning in place, it’ll produce huge returns with virtually no risk.

In fact, as this “bust” develops, you’ll actually be able to increase your returns.

The tricky part will be fighting the urge to sell when everyone – and I mean everyone – will be cutting and running.

For the informed investor, this will be the biggest bonanza of the new millennium, and all you have to do is not sell.

Here’s how it will develop…

http://www.investmentu.com/2012/July/bond-bubble.html
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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jul 09, 2012 8:40 am

Weekly Review

Bonds. 1.54% versus 1.60% 10 year US Treasury.

Bonds should rise as economic data craps out. Also, the hint the Fed might buy mortgage backed securities doesn't hurt.

Bonds gapped upside but note they are STILL in the now 5-week lateral range, holding the break higher to an elevated level as they ride out the indecision with the Fed.

Thing is, with the weak economic data OR the Fed action bonds are winners once again.


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Re: Bonds 02 (Sep 10 - Dec 12)

Postby winston » Mon Jul 16, 2012 8:10 am

Weekly Review

Bonds. 1.49% versus 1.48% 10 year US Treasury.

Bonds were basically flat. A strong move over the past week to the upside, and kind of tailing off at the end of the week.

Still below the late-May/early-June peak, but it is making a good showing of moving to the upside and challenging those levels.

That would be based on a weaker US economy and weaker economies elsewhere that are putting funds from other countries into US Treasuries.

And if the Fed does want to start some asset buying, that could help bonds as well. Thus we see the bond market improving and holding gains.


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