Thursday, October 21, 2010

10 Year Bond Action

I will be back later but thought I would throw the 10 year bond up:


This is very strange price action.

Why is the 10 year selling off as the market reverses downward?

We should be seeing the exact opposite.  This isn't a huge move but it's disturbing to say the least.  Treasuries are supposed to be the safest of all safe havens.  You would expect them to rise after seeing a nasty triple digit reversal like we did today.

I guess when the government that backs them is bankrupt they all of the sudden don't look so safe anymore.

8 comments:

Anonymous said...

due to the unexpected reverse repo by the Fed from this afternoon maybe?

Anonymous said...

Jeffy - 1 year ago I asked you this:

"Heres a question: when the downturn starts, is the dow going to smash below the 6500 level, proving that what we saw in march was not the "bottom"?"


Your response at the time:

"I believe we will break 6500. We never saw true "capitulation" selling at the lows. The bottom usually occurs when no one ever wants to own stocks again. Tuesday, October 27, 2009"




Dont mean to put words in your mouth, but the time to admit that March 2009 was indeed the bottom is drawing nigh. Another month or two and then the rally will be even longer than the downturn. Looks to me like the govt has not only created a rally, but a full business cycle.

So, are you ready to come to Jesus on this thing? Or do you still believe that March 09 - present is just a dead cat bounce?

Tick tock my friend.

Jeff said...

Anon 1 Possible.

Anon 2

I never would have imagined that the Fed would go to such lengths to hide this via government stimulus.

The depression is there my friend and it can't be hidden forever via government spending.

The stock market is a horrible economic indicator.

Look around you. Are things really better from March of 2009 or worse?

Anonymous said...

Look around you. Are things really better from March of 2009 or worse?

For me, personally, and for those around me yes. But thats not what I asked you. I agree with you that the DJIA is not a good economic indicator - never has been.

The question remains, was the 6,500 seen in March 2009 the bottom or not?

1 year ago, you came out with an emphatic "no way that was bottom, 6,500 will be broken" response.

Hopefully the last year has taught you alot of what the govt manipulation can do. So the question remains, have we seen the bottom for this govt manufactured business cycle or not?

Yes or no my friend?

getyourselfconnected said...

I don't mean to get involved on some one else's blog but this line...:
" Looks to me like the govt has not only created a rally, but a full business cycle."

...Is false on so many levels it is hard to even take it seriously.

I could elaborate but anyone that knows what a business cycle looks like knows what I mean.

I have always thought the stock lows will never be seen again for at least two reasons, but that does not mean much to the real economy. Glad things are better in your neck of the woods Anon, here in Massachusetts things are as bad as ever. You must live in DC.

Jeff said...

"Hopefully the last year has taught you alot of what the govt manipulation can do. So the question remains, have we seen the bottom for this govt manufactured business cycle or not?"

Of course I learned a lot and I will continue to learn a lot more.

The market humbles everyone at times.

Given all of the market manipulation I don't really know if we break the lows.

I would say they chances are higher that they are broken but I've seen a lot of cray stuff by the Fed since last year.

I am frankly not too concerned about stocks. I am not invested in them and I don't trust how the market is trading.

I will play around with a few trades but thats about it.

I am far more concerned about how this country stays solvent.

The market is the least of our worries.

Anonymous said...

"Given all of the market manipulation I don't really know if we break the lows."

OK so maybe thats the most we can get out of you - fair enough.

Its interesting, originally you said you would be the "first to let us know" when it bottomed. I knew that wasnt going to be accurate, but I still didnt know
how to categorize you.

You went from "no we havent bottomed" 12 months ago, to "I dont know" today. Give it another year and you may be willing to say "gee maybe it did bottom 2.5 years ago". Incidentally, if you do, I will then be on guard for a new peak :)

The other possibility is that you will never call bottom. Most permabears do not, and you may in fact be one. We shall see.

Anonymous said...

Anon- I appreciate you keeping Jeff on his toes but if you are looking for this blog to be the guiding light of investment decisions then you will get burned. There is not a single person out there that makes correct calls all the time, even Warren Buffet makes bad calls just not as many. Market timing is a b*tch on it's own but when the government is going to manipulate the game then you just have an even harder time judging which way the market is headed. Just like now, it's almost a repeat of 09, QE means buy!! Long term probably is not a good thing for economy.
Which in turn could cause the market to move lower, I personally look at the div yield, P/E of the S&P to gauge whether the market is expensive or cheap.