Posted on 03/22/2011 6:51:34 AM PDT by SeekAndFind
This is really, really, really bad.
They must see something...
They must have seen the following web site,
Factor in another war, spending like there is no tomorrow and the new Obama Care... I don’t think the US Dollar is going to last much longer.
If you were a Hedge Fund manager and you heard the announcement of QEIII what would you do? These guys know suicide when they see it. We are going to see a bond market collapse at some point. This train has been going down the tracks for awhile now.
Understatement of the century.
Mike
National Security Issue.
We are one failed treasury auction away from complete financial disaster..................
Actually, there are many ways out.
"Cut spending, fast and deep" is the least probable - in fact, it"s SO improbable that I'm surprised you even mentioned it.
” “...China, Japan, and OPEC — are still in the market for 30 percent of all new debt. [......] This is really, really, really bad. “
Not nearly as bad as it’s gonna get if/when Japan is forced to liquidate its Treasuries holdings to finance its rebuilding....
We ain’t seen nothin’, yet....
PIMCO did the same thing in June 2009. They chase yields and right now yields are low on US treasury bonds. It doesn’t mean anything.
I don’t have much respect for bond funds anyway. They pretend to be a replacement for buying and holding bonds directly. But because they constantly have to buy and sell bonds as funds flow in and out of their mutual fund, they behave like equities, not bonds.
I really think bond funds should be eliminated from most people’s portfolios.
1. Qualitative easing (i.e. the Fed creating money from thin air) ends and the interest rates have to rise significantly to convince buyers to come buy our bonds: interest rates rise and old bond values drop.
2. Qualitative easing is renewed and the Fed prints up even more funny money. Inflation rises and long term interest rates also rise so old bond values drop.
3. A miracle occurs, the sun breaks through the clouds and the economy really recovers in 1980s style. Business grows, people start buying houses again and more demand for loans occur: interest rates rise and old bond values drop.
I have a hard time seeing any situation where interest rates for loans stay at their current, artificially low rates for much longer. If you want to buy a house or refinance your current one with a low rate long term loan, do it quickly.
It is time to face facts. Spending is so out of control that Treasuries are no longer a safe haven for investors. The markets are saturated with U.S. debt and increasingly unwilling to absorb more. There is only one way out of this mess — cut spending, fast and deep.
Since the coalition of Dems and weak-kneed Republicans are clearly unwilling to make the $1.5 trillion cut that it will take to avoid this catastrophe I conclude that they are seeking just such a disaster. Collapse is the goal.
The last people to see anything are hedgies. They are the ultimate sheep. Its only leverage and press releases that give them any influence.
I fear the same thing.
Actually, there are many ways out.
“Cut spending, fast and deep” is the least probable - in fact, it”s SO improbable that I’m surprised you even mentioned it.
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OK, I’ll bite. A huge tax increase is an option. What are the others?
ping
.....We are one failed treasury auction away from complete financial disaster....
If the Fed is now purchasing most of the debt, have not we already reached that point?
It depends on the definition of failed. It seems to me that point is already passed.
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