FRANTIC SCRAMBLE TO THE ARK: Treasuries Enjoy Best Start to a New Year Since 2008

Go ahead and laugh at me, as I build the ark, packing giraffe’s, zebra and a few humans onto it. I am not the only one buying treasuries. As a matter of fact, it has become a hedge fund fav.

I am going to quote a retard from BBG news in a second. Just know, I haven’t the slightest idea where he’s getting his numbers from. I posit he’s looking at shorter duration treasuries.

Treasuries have returned 3.1 percent this year, the best start to a year since 2008, according to Bank of America Merrill Lynch index data, amid financial-market volatility and concern that global growth is slowing. Fed officials this month lowered their median projection to two interest-rate increases in 2016 from four at the December meeting. Fed Chair Janet Yellen said this week that an uncertain global environment calls for a more gradual approach to tightening policy.

“The tone of the market has changed dramatically” since Yellen spoke, said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc. “The rate structure changed, the curve changed, and today is a continuation of that.’’

TLT, 20 yr+ treasuries, are higher by 9% for 2016, no including dividends, which are paid monthly. This is, by far, the single best, low beta, performer of 2016. When it’s all said and done, people just want a little yield. The oil space and their spastic pipeline schemes have imploded. The high yield ETFs have proven to be heart attack material. So, and in very somber tones, investors have put hat in hand and gotten on the government treasury line. It’s a very sad thing to see, all of these once virile men hiding in treasuries.

Nevertheless, I am playing TLT strategically and couldn’t care less about dividends, although I gladly accept them. I am holding TLT until the yield curve, 2s and 10s, inverts. That will equate to supreme winship on my behalf. I might even get to sell TLT 20, 30 maybe 40 points higher from current prices.