Treasuries are getting smashed, sending yields to new highs. Since everyone is pondering when the Fed will stop QEing, rates are going up–organically. We haven’t had anything to worry about since European sovereign rates were blowing out. Well guess what?
If US rates continue to surge higher, borrowing costs will become burdensome, precipitating another credit downgrade. It’s one of those self-fulfilling prophecy thingies that we’re all so fond about.
The market is still up, but gains have been cut in half. Don’t look now, but a major panic is right around the corner if TLT continues lower.
Do yourselves a favor and get some protection, raise some cash, and DO NOT retweet this post or share it with anyone, else they’ll steal some of these ideas for themselves.
UPDATE: I sold JIVE and MT, raising cash levels to 35%.
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>>DO NOT retweet this post or share it with anyone, else they’ll steal some of these ideas for themselves.>>
Are we legally allowed to trade on this interest rate idea?
Buy Silver!?
been waiting for this prophetic post, you express the implications much more elegantly than I do
All True….
So the shift out of TLT is definitely not the “risk off” being dead, but instead a warning of higher borrowing costs?
This market will continue until my puts r worthless, (June)
I guess it’s time to sell some REM? I was going to buy more here.
maybe the shift is from TLT to cash?
People are selling treasuries to raise cash to buy what exactly? Just sit on cash and pay off debts fearing losing the principal on their TLT and worried that the fed will raise interest rates making it difficult for the process to continue?
Or will it go into stocks eventually? Or somewhere else in the world?
Yeah right. They prefer cocaine to be Benadryl.
Stocks, stocks, stocks
HFT’s doing the stealth rotation!
How exactly can the algo’s drop things they want to buy. USD on the rise while TLT sells off. Euro trash bonds real strong today too. Fly?
I do enjoy the way in which you have presented this specific concern and it does give me some fodder for thought. On the other hand, from just what I’ve observed, I only wish as other feed-back pack on that men and women remain on issue and don’t start on the tirade concerning some other news du jour. Yet, thank you for this exceptional piece and even though I can not really agree with it in totality, I regard your perspective.