Double Ending or Dealing?
A couple of months back, deluged by a sea of liquidity and other factors, we played turncoat on our main mantra from late 05 and 06.
From Jump, How High? 11/03/05: "interest rates will go up farther then what most expect or anticipate."; "the existing bond market will get trampled under foot."
Seemingly, the powers that be and "would be" are going to let rates climb and the US housing market tank really big... thus slowing their own economies and taking a major hit on dollar holdings.
Recent events have made our original position slightly premature but essentially correct.
From Economic Reports 05/15/07: "TIC Inflows show private foreign investors rescued the bond market, while foreign institutions rescued our government agency debt....
Bad news, despite a lower dollar, foreigners are turning away in droves and if this continues, interest rates will skyrocket."
Today's 10 year note auction had a pathetic 11% indirect bidder participation. Bonds sold off BIG and the 10 year is now at 5.22%
A cruel, cruel summer... The refi ATM spigot is closed, subprime & no down dead, rates are climbing and the ARM resets are going to be hard and heavy.
U.S. foreclosure filings surged 90% in May as more homeowners fell behind on their monthly mortgage payments.
There were 176,137 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio.
Get ready for a BOJ 25 bps raise in September or October...
Today, Japanese wholesale inflation PPI +2.2%; Central bank Governor Toshihiko Fukui said on June 5 that
"upward cost pressures are likely to increase and the Bank of Japan will adjust interest rates gradually in line with the economy's development."
Get ready for another PBOC Yuan Revaluation later this summer...
Chinese CPI inflation spiking +3.4%, the fastest in 2 years. China's exports +28.7%, while imports +19.1%, causing a +73% surge in trade surplus.
And get ready for the Fed to do what no one in the world thinks it will...
we still maintain that the Fed will catch everyone off guard by lowering rates for a multitude of reasons.
Aside from a tanking economy, energy stagflation and the housing debacle, this could be another reason why...
From The Pause That Refreshes? 05/19/06: 70% of all Federal Debt matures by Q107....
Silver lining in the clouds?.... From Bounces, Bubbles, Spreads, Deficits.... 03/07:
Of course, if the Fed does lower, which they will have to by the end of summer, the long term high yield debt already held would go up in value and could well finance part of the pension deficits.
Seems like the near term might be ripe to acquire some falling high yield debt on the come, at a very nice discount.
Whoever is holding said debt at the time the Fed lowers in Sept or Oct. would make a killing.
Gee, I wonder who might also be quietly buying and retiring the existing bonds which are becoming worthless by the minute, 42% of which are foreign held???
Now that's what I call, double dealing and double ending a deal...
From Jump, How High? 11/03/05: "interest rates will go up farther then what most expect or anticipate."; "the existing bond market will get trampled under foot."
Seemingly, the powers that be and "would be" are going to let rates climb and the US housing market tank really big... thus slowing their own economies and taking a major hit on dollar holdings.
Recent events have made our original position slightly premature but essentially correct.
From Economic Reports 05/15/07: "TIC Inflows show private foreign investors rescued the bond market, while foreign institutions rescued our government agency debt....
Bad news, despite a lower dollar, foreigners are turning away in droves and if this continues, interest rates will skyrocket."
Today's 10 year note auction had a pathetic 11% indirect bidder participation. Bonds sold off BIG and the 10 year is now at 5.22%
A cruel, cruel summer... The refi ATM spigot is closed, subprime & no down dead, rates are climbing and the ARM resets are going to be hard and heavy.
U.S. foreclosure filings surged 90% in May as more homeowners fell behind on their monthly mortgage payments.
There were 176,137 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio.
Get ready for a BOJ 25 bps raise in September or October...
Today, Japanese wholesale inflation PPI +2.2%; Central bank Governor Toshihiko Fukui said on June 5 that
"upward cost pressures are likely to increase and the Bank of Japan will adjust interest rates gradually in line with the economy's development."
Get ready for another PBOC Yuan Revaluation later this summer...
Chinese CPI inflation spiking +3.4%, the fastest in 2 years. China's exports +28.7%, while imports +19.1%, causing a +73% surge in trade surplus.
And get ready for the Fed to do what no one in the world thinks it will...
we still maintain that the Fed will catch everyone off guard by lowering rates for a multitude of reasons.
Aside from a tanking economy, energy stagflation and the housing debacle, this could be another reason why...
From The Pause That Refreshes? 05/19/06: 70% of all Federal Debt matures by Q107....
Silver lining in the clouds?.... From Bounces, Bubbles, Spreads, Deficits.... 03/07:
Of course, if the Fed does lower, which they will have to by the end of summer, the long term high yield debt already held would go up in value and could well finance part of the pension deficits.
Seems like the near term might be ripe to acquire some falling high yield debt on the come, at a very nice discount.
Whoever is holding said debt at the time the Fed lowers in Sept or Oct. would make a killing.
Gee, I wonder who might also be quietly buying and retiring the existing bonds which are becoming worthless by the minute, 42% of which are foreign held???
Now that's what I call, double dealing and double ending a deal...
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