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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
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