JGBs – How They Responded to Japan’s Eco Nuke

April 22, 2013

Japan’s yield curve has flattened since the central bank’s new governor, Haruhiko Kuroda, announced plans for unprecedented quantitative easing. Bloomberg’s Graph Curve Surface function shows the market’s response
to Kuroda’s plan and therefore the potential impact of similar programs in other countries.

There has been a good amount of talk related to the potential for Japan’s buying spree to backfire, even as they are committed to buying loads and loads of their own Read more

A Quick Look at the 10-Year Treasury Yield

August 17, 2012

The yield on the 10-Year U.S. Treasury bond has made an impressive move over the past few weeks. After dropping 40% from the high in March it has risen 28% since the low in July. Perhaps “Operation Twist” is what is being expected from Bernanke in  Jackson Hole, on August 31.

Or, it is possible that the ECB’s commentary recently has put a floor on the need for safety. Of course there is the discussion that the U.S. economy looks much better than it did just a few months ago.

Here is a chart, marked up with a regression analysis and Fibonacci Read more

NASTY: 30 Year Bond Auction Is Not Pretty

August 11, 2011

Make any excuse you want, the fact is that there is a simple reason why there was a poor showing for the 30 year auction: Less people want the product at previously paid prices. Translating that is also rather simple: A downgrade of the credit rating of the U.S. along with sovereign debt worries around the world have pushed buyers to the Read more

When Bill Gross Speaks –> Frogs Panic

June 2, 2011

Recently, Bill Gross, Pimco’s bond market king, discussed why he is bearish on U.S. Treasuries. He also reported that he has recommended  selling most, if not all, U.S. long-term Treasuries and actually went short. You gotta love this guy….

We have been waiting for the markets to wake up and realize that this is close to the lowest interest levels we will see for some time to come. Perhaps it should be described as a “Generational low” for bonds. Either way, the idea that investors will be willing to get paid next to nothing for their bonds is ludicrous.

Add to that the recent announcement Read more

Bond Bubble? Perhaps – Initiating Position in (TBT)

August 18, 2010

A speculative short of 5% or 10% synthetic position of the 2x Inverse of the Barclays Aggregate 20+ Year Bonds with ticker symbol (TBT) has been included in the portfolio.  We are currently seeing some of the highest bond prices and lowest yields since March of 2009 which is signaling a much more detrimental environment then we are currently experiencing.  We will keep a watchful eye on this position and cut or add if necessary.

Rates on 30-Year Bonds are currently at 3.762% making it the lowest since March of 2009 which marks the beginning of the “recovery”. This sharp decrease in rates is the worst we have seen since the 2008 recession. This is not exactly a healthy signal in the market and may warrant further hedging of the equity portion of the portfolio if we continue Read more

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