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"All this takes us to a rather disturbing bi modal endgame, the bursting of the proverbial Big Bubble that brings the whole house of cards down or the inflation of yet another bubble to buy more time"- Stephen Roach

 

 

 

 

 

 

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“Behind every great fortune there is a crime.” Honore de Balzac

 

 

 

 

3/11/2010

3/10/2010

2/11/2010

12/11/2009

3/11/2009

Now

1day

1mo

3mos

1yr

3 mo

0.16

0.15

0.11

0.03

0.23

1 yr

0.40

0.39

0.38

0.35

0.71

2 yr

0.97

0.92

0.91

0.83

1.03

3 yr

1.50

1.45

1.43

1.30

1.45

5 yr

2.43

2.39

2.39

2.26

1.96

7 yr

3.19

3.16

3.18

3.05

2.56

10 yr

3.73

3.73

3.73

3.55

2.95

15 yr

4.37

4.38

4.39

4.26

3.78

20 yr

4.51

4.53

4.54

4.39

3.88

25 yr

4.59

4.61

4.63

4.46

3.93

30 yr

4.54

4.56

4.55

4.43

3.89

 

 

 

2010 – Twenty Ten

What kind of year will it be? Seriously!  by Major Yield

 

Most don’t have a clue.

 “Some” have all the answers. Most of that “some,” have very different axes, (wishes, wants and dreams), and are coming from different views, schools of thoughts and opinions.

There are many sides to each story and good arguments can be made to support each of them by smooth talking politicians and economist; who have their own axes to grind.

Anyone can have an opinion about anything and anyone may get it right. But no one knows.

 

Asked for a “serious answer” about the outlook for 2010 was difficult because it requires one to draw from the “gut”. That quite place in the pit of the stomach that takes information from the heart, the mind and the spirit and influences the formation of our decisions and opinions.

 

And of course, who wants to be serious?

It is always better to use someone else’s outlook, using both pros and cons, remaining in the safe zone and say little of your own thinking, besides the Media is flooded with the talking heads and experts presenting their arguments.

Today’s information stream is giant and diversified, to the point where you can find support for any forecast on any future events. BUT……………

A serious answer?

On What topic?

Thank goodness it boiled down to one topic; “The Bond Market” (and the question came from an institutional, credit market investor in a regulated industry, a professional investor and portfolio manager)

First, let me say, I don’t Know. and

Many things will determine the fate of the bond market…………….. but I asked,

Are you aware of the “Dark Rift or the Great Rift”? 

The Black Dust Clouds in the Milky Way?

The “Black Hole” that has a mass of one trillion stars, in the center of the galaxy?

Well………….The Fed is the “galaxy” and bond investors are being sucked into……………. a “Super” Investment Black Hole.

Consider:

1) - Interest rates being held for a long time at historical lows. Easy Alan and Helicopter Ben

2) - The Fed competing with investors for the highest rated government backed securities driving

       prices beyond belief. .

3) - A world seeking “safe haven” for their money.

4) - Regulations that prevent investing outside the box created by regulation.

5) - Exceptionally, low yields on good credit.

6) - The governments extraordinary need to borrow.

7) - The amount of government debt required to be sold in the future years to support current

       Congressional spending.

8) - A very bad profit history of Government running industries and now they have the biggest to

      run and still want more.

9) - Higher taxes on the remaining private enterprises and taxpayers = less private savings to

      purchase debt.

10) - Wasteful pork barrel spending with little stimulus to or for anyone other than politicians.

11) - Interest Rates that must go up, up and up….if the US expects anyone to buy the debt with a

        Falling dollar.

12) - Inflation – deflation battling for power……..both kill.

13) – Boys with no experience, deep in theory, calling the shots.. Japan was sent the PhD’s of

        Harvard to help them solve their economy and – the Japanese sent them back – now they

        Run US………………….but where?

How long? and How Much? Will the FED’s compete with investors and continue to buy in the bond market’s future supply? Be serious!!!!!

 

So the serious Bottom Line: In ones most humble, quite place – the “gut”………

 

Everything you buy today – everything in the bond market – you will be able to buy cheaper some time in the future of 2010 – 2011 – 2012.

 

Of course, if you believe Dec 21, 2012 is the end of the World, as did Nostradamus, the Bible Code, Mayans, etc – then, the next few years just try to hold on to your job, be happy, enjoy life and join the rest of us in playing the investment GAME.

We must keep playing, it’s what we do – all of us………………………………

 

Stay Short.

Buy the Highest Quality.

The Best “Cash Flow”

And you will be competing with the Fed’s.

 

What kind of year will 2010/2011 be?

The losses that portfolios will see in the future, may make the ones of today, seem small.

I’m serious.

 

 

 

 

Major Yield Is a bond trader with almost 35-years of in-the-business experience.

 

He has been writing fixed-income/economic/interest rates – comments with daily updates, for close to 25-years. He has met some of the most interesting and successful “folks” writing for the Bondheads.com

 

The Major works with the professional, institutional investor, of most regulated industry sectors, that invest in the credit markets, using  investment grade products.

 

The Major believes that all opinions are possibly correct and yours, his and everyone, has the right to voice theirs.

 

Major Yield enjoys all comments from readers and may reply to them.

You may contact Major Yield at Major Yield

 

 

 

 

 

Bondhead’s WebLines

Preceding 7-10 days of news listed by category

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Preceding 7- 10 days of news ordered by date

The Bondhead’s News Archive

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