»» There used to be a few bond bulls on this forum I wonder where
they all are?
There used to be a few bond bulls on this forum I wonder where they
all are?
- Tue, Jul 15, 2003 - 11:30 PM
Re: There used to be a few bond bulls on this forum I wonder where
they all are?
- Wed, Jul 16, 2003 - 12:09 AM ( )
Not to be repetitive, but we are still in a long term
bull market in falling yields. We need to to
to 6% om the 30 year to break the declining tops.
That is just a hard fact- get out a ruler and check it
out.
Re: There used to be a few bond bulls on this forum I wonder where
they all are?
- Wed, Jul 16, 2003 - 01:33 AM ( )
:Not to be repetitive, but we are still in a long
:term bull market in falling yields.
Is that the same as a long term bear market in rising
bonds?
Re: There used to be a few bond bulls on this forum I wonder where
they all are?
- Wed, Jul 16, 2003 - 11:39 AM ( )
Bonds rise and yields go down is a bull
Exactly, but bonds falling and yields going up is a bear and that
is what I expect and so does bill gross by the way, but I am sure he has no
idea what he is talking about.
- Thu, Jul 17, 2003 - 09:00 AM
Re: Exactly, but bonds falling and yields going up is a bear and
that is what I expect and so does bill gross by the way, but I am sure he has
no idea what he is talking about.
- Thu, Jul 17, 2003 - 09:07 AM ( )
By my reading, Gross is not expecting a bear. He just
says the easy money in treasuries is over. I have a lot of money with Pimco.
Their calls on Treassury yield have never been as good as Hoisington, but they
go foreign and corporate and make up for their weaknesses, where Hoisington is
Treasury only.
I think Pimco is a bit early with their "easy money
is over" call. I think they have some self-interest involved as their
explosion in assets under management is making it hard for them to keep up
their track record and they are trying to cool off the transfer of money to
their bond funds and build up their equity funds.
JMHO
Bill Gross July Outlook and link
- Thu, Jul 17, 2003 - 09:53 AM ( )
I just read the July Outlook by Bill Gross. He definitely
is not looking for a bear market in bonds. He confirms my suspicion that
besides some legitimate investment comments, he is trying to manage the
expectations of his shareholders.
Three years of double digit total returns in bond funds
is going to be a difficult trick to keep up with. He wants people to be expect
and be happy with single digit returns.
The guy is a child of the 60s, I feel an association with
him. He wrote a book in 1995 called "Everything you've heard about
investing is wrong!" which I unfortunately didn't read until last year.
Great title, but many of his thoughts about bonds then
did not come to pass. He is agile enough to get past his mistakes and still
make good money.
He "made a living" in Las Vegas as a young man.
He had taught himself to count cards. A bit of a modern day Jesse Livermore but
with more self-control and morality. He doesn't believe in gambling unless he
"knows" he can win.
The Casinos didn't like him. 
If we take out 5% in the long bond we will be at 6% in the blink of
an eye, and we are very very close.
- Wed, Jul 16, 2003 - 08:45 AM
Daily and weekly MACDs are already confirming and the
monthly MACD is very close to confirming. All we need to do is have rates hold
around here for the next two weeks and the monthly will confirm. From looking
at the chart I think we will take out your 6% in the next couple of months.
Re: There used to be a few bond bulls on this forum I wonder where
they all are?
- Wed, Jul 16, 2003 - 08:13 AM ( )
I'm still here, got no problem with bonds, still up for
the year. Up for the past several years, Trend is intact. This is a no-growth
economy, think we all agree on that, so lower yields are ahead. What has
happened recently is simply a reaction to a runaway rally, completely expected.
For a no-emotion, no chicken little, objective look at
the bond market, I suggest Hoisingtonmgt.com, click on Economic Review, Second
quarter 03. They have their last 10 quarters of reports there. Go right to the
4th page of each to get their summary. Right on every time. Too bad the last 20
quarters aren't there because they have all been right on the money.
Current prognosis is this Bond Bull as measured from 1990
is only half over. Long yields will settle below 3% eventually.
I'm as comfortable with my bonds as many of you are with
gold, which I wouldn't touch. To each their own.
Good luck to you but how anyone can be comfortable with pieces of
paper that can be bought by a government with an out of control printing press
is completely beyond me.
- Wed, Jul 16, 2003 - 08:55 AM
The fractional reserve banking system was created to
avoid having the government simply print money to finance itself like often
happens in less developed countries. However, we are abusing our system so much
that in essence at this point we are simply printing to finance government debt
and spending. It is only a matter of time before the players in the bond market
catch on, and I think a good deal of them caught on yesterday. 5% in long bond
rates is a line in the sand IMO, if we take that out I recommend you quickly
reconsider your bullish stance on bonds.
Re: Good luck to you but how anyone can be comfortable with pieces
of paper that can be bought by a government with an out of control printing
press is completely beyond me.
- Wed, Jul 16, 2003 - 09:51 AM ( )
It it easy to forecast all kinds of dire stuff
on a big move in the markets. I don't own
bonds or even trade them, but any technician
knows by looking at PRICE which is bunch of lines
on a chart that we are a long ways from a secular
change in bonds. It is pretty simple.
Major long term divergences in MACD and shorter term (weekly and
daily) breaks are in my mind anticipating the start of the bear in bonds. Every
technician looks at different indicators but those
- Wed, Jul 16, 2003 - 09:58 AM
who wait for the 50 year moving average to confirm end up
missing most of the move 
Re: Major long term divergences in MACD and shorter term (weekly
and daily) breaks are in my mind anticipating the start of the bear in bonds.
Every technician looks at different indicators but those
- Wed, Jul 16, 2003 - 10:05 AM ( )
Anybody shorting bonds now has missed 90%of this bond
decline. We will now enter a long sideways
consolidation of weeks or months that will frustrate
bears, because this about where the fed wants rates, just high enough to give
the perception of some economic strength, and not too low too appear
deflationary.
Re: Major long term divergences in MACD and shorter term (weekly
and daily) breaks are in my mind anticipating the start of the bear in bonds.
Every technician looks at different indicators but those
- Wed, Jul 16, 2003 - 10:22 AM ( )
Excellent, agree 100%! And the operative words are
"frustrate bears". THAT is what a Bear Market does best! IMO
:Anybody shorting bonds now has missed 90%of this
:bond decline. We will now enter a long sideways
:consolidation of weeks or months that will
:frustrate bears, because this about where the fed
:wants rates, just high enough to give the
:perception of some economic strength, and not too
:low too appear deflationary.
I can agree with part of your statement, I think there is a chance
we trade sideways for a while because of the massive resistance at 5% in the
rates chart, however I think it has nothing to do with the fed
"wanting" them there. Do you think
- Wed, Jul 16, 2003 - 11:22 AM ( )
I still don't understand why there are some who believe
in the fed's omnipotence.
message got cut for some reason.....Do you think the fed wanted the
NAS to lose 80% of its value?
- Wed, Jul 16, 2003 - 11:23 AM ( )
Re: message got cut for some reason.....Do you think the fed wanted
the NAS to lose 80% of its value?
- Wed, Jul 16, 2003 - 05:27 PM ( )
Simple answer. They don't give a s--t about the NASDOG.
They believe the DOW is where the focus should be because is THE big indicator.
with the largest capitization. Which index led this rally from the OCT low? The
Dow.
It ALWAYS does when the markets are in trouble.
The mechanics are simple. The ESF buys DOW futures, thru
the big investment house which floats eventually to big specialist firms like
LaBranch which controls 9 DOW stocks. to put it another
way. Why do thing we did not go to 5000
before this rally. They also run the SNP futures in
parallel
Re: message got cut for some reason.....Do you think the fed wanted
the NAS to lose 80% of its value?
- Wed, Jul 16, 2003 - 05:37 PM ( )
(Before I rant on, congrats on the big play today!)
You asked me that question several months ago when we
were having a "don't fight the fed" discussion. My answer was similar
to Wolfbear's though he has more technical info, and that is, the Fed didn't
care about the NAZ at that time. They supported the Dow.
The Fed is not omnipotent, but wherever they direct their
attention they will make a dent, right or wrong. So, by going where they are
not, one can still profit. Or by hitching a ride on where they are. But, direct
confrontation will fail.
You mentioned you succeeded in fighting the Fed, and I asked
for specifics, but the thread kind of faded. I suspect that was when you made
your wad in gold, which I envy and respect. If so, my comment would be that you
didn't actually fight them. They just didn't care at that time to influence
that market, and subsequently more free market forces drove it the way you
expected.
Oh well, that's enough speculation. Tomorrow be another
day.
I didn't make my wad in gold I just more than doubled my initial
was in gold, the first two extra
- Thu, Jul 17, 2003 - 09:02 AM
zeroes where added to my account in the fall (September-
NOvember) of 2000 buying puts on tech crap and banks, that's when I made my wad
fighting the fed.
Re:TY for response.
- Thu, Jul 17, 2003 - 09:09 AM ( )
Re: I can agree with part of your statement, I think there is a
chance we trade sideways for a while because of the massive resistance at 5% in
the rates chart, however I think it has nothing to do with the fed
"wanting" them there. Do you t
- Wed, Jul 16, 2003 - 05:14 PM ( )
I think the fed working with Treasury{ESF}and
the results in the marketplace, including gold,
frustrates the hell out of "free market" bears.
That is pretty obvious.
Re: Mpls/bonds
- Wed, Jul 16, 2003 - 10:24 AM ( )
I should have made myself clear. I am NOT long US bonds.
As I told you last week, I am long foreign government bonds (AAA/aaa) in
creditor nation-status countries, as a play on the falling dollar. I expect to
be up 30% on these by this time next year. The coupon is between 5 1/2 and 6%.
I'm not worried about yield because I'll be out way before these approach
maturity.
Now that's a different play altogether but I think you also need to
be careful, look at what has happened to Japanese bonds eventhough they are
- Wed, Jul 16, 2003 - 11:25 AM ( )
a creditor nation. I think all things paper are at risk
including gold stocks and that really makes me nervous. I will hold until they
show me that I shouldn't but I am scared of paper at this time.
Re: Now that's a different play altogether but I think you also
need to be careful, look at what has happened to Japanese bonds eventhough they
are
- Wed, Jul 16, 2003 - 11:37 AM ( )
Remember, all we're talking is a currency play here with
a chance to pocket 5 - 6% a year in the meantime. The foreign government bonds
I selected aren't going to default in the next three years but their currencies
ARE going to appreciate dramatically during that time. I deliberately avoided
Japan (and the U.K.)
[ Post
Last Edited By bear2bear on Wed, Jul 16, 2003 - 11:38 AM ]
How do you buy these foreign bonds directly? . . . .
- Wed, Jul 16, 2003 - 12:01 PM ( )
I am in GIM because it trades at a 7% discount and pays
6%.
:Remember, all we're talking is a currency play
:here with a chance to pocket 5 - 6% a year in the
:meantime. The foreign government bonds I selected
:aren't going to default in the next three years
:but their currencies ARE going to appreciate
:dramatically during that time. I deliberately
:avoided Japan (and the U.K.)I
Re: How do you buy these foreign bonds directly? . . . .
- Wed, Jul 16, 2003 - 12:06 PM ( )
Ask your broker to get in touch with his bond trading
desk. They are able to (even if they say they can't) buy these bonds for you
from their London desk (up to about midday ET). They may slap a minimum
quantity on you ($50K or $100K). Failing that, I think it's called Everbank,
who will buy them for you with a big smile. (Also FDIC insured foreign CD's, if
I remember right).
[ Post
Last Edited By bear2bear on Wed, Jul 16, 2003 - 12:08 PM ]
HooBear, please take no offense in my comments but you really need
to reconsider your reasoning for being a bond bull, "this is a no growth
- Wed, Jul 16, 2003 - 09:03 AM
economy meaning lower yields are ahead". There is
much more than that simplistic view that goes into the bond equation. If your
statement was always true then please explain how yields dropped for 22 years
while the US economy was going through one if its greatest growths periods of
history in the 1980s and 1990s. Or are bonds another one of those "can't
lose investments" that always go up? I believe you need to revisit the
macroenomic reasoning behind your bond investment in much more detail than you
currently are. If bonds are going to continue to go up then sir Greenscum has
discovered the perpetual motion machine and none of us need to ever work again
in our lives. We just need to sit back by the beach while Greenscam runs the
printing presses and keeps dropping crisp hundred dollar bills from planes so
that we can keep buying our margaritas. If you care to go deeper into this
subject I would be glad to do so this morning before I go to work.
The key concept here is the long wave cycle . . . .
- Wed, Jul 16, 2003 - 09:13 AM ( )
It looks to me like we are now in the early K-Wave
winter. That means depression ahead. There is a mountain of dept out there and
we are headed for a credit crunch. This will mean soaring unemployment, real
estate prices decline and stock market crash. There will be a flight to quality
with interest rates falling on Treasures and rising on junk.
It is premature to look for a new inflation cycle
beginning now. The inflation cycle starts AFTER the credit cruch has run it
course.
:economy meaning lower yields are ahead".
:There is much more than that simplistic view that
:goes into the bond equation. If your statement
:was always true then please explain how yields
:dropped for 22 years while the US economy was
:going through one if its greatest growths periods
:of history in the 1980s and 1990s. Or are bonds
:another one of those "can't lose
:investments" that always go up? I believe
:you need to revisit the macroenomic reasoning
:behind your bond investment in much more detail
:than you currently are. If bonds are going to
:continue to go up then sir Greenscum has
:discovered the perpetual motion machine and none
:of us need to ever work again in our lives. We
:just need to sit back by the beach while
:Greenscam runs the printing presses and keeps
:dropping crisp hundred dollar bills from planes
:so that we can keep buying our margaritas. If
:you care to go deeper into this subject I would
:be glad to do so this morning before I go to
:work.
Agree with your economic outlook but not your bond outlook as
oposed to the 30s
- Wed, Jul 16, 2003 - 09:59 AM
we are now the largest debtor nation in the world and
also we are on a floating currency not a gold standard. Structural deflation,
absolutely, paper currency denominated assets appreciating in value? NO WAY!
Re: Agree with your economic outlook but not your bond outlook as
oposed to the 30s
- Wed, Jul 16, 2003 - 10:17 AM ( )
Let me say something about belief , dogma,
or any perceived fundamental problem such
as our debtor status, the gold standard,etc.
I TRY not to let that stuff which I call
the "emotional" factor that can screw up my
trading to be my dominant influence, although I
do tend to believe like everybody else. I trade
base on price movement, money flows, fed and
market maker desires, all with a frame of reference to
charts and technicals.
Bonds bottomed in about 1950 . . . .
- Wed, Jul 16, 2003 - 10:19 AM ( )
It was about 30 years after the inflation and interest
rate peak in 1920 that bonds really bottomed (except the the spike down 1932.)
Why can't this happen again at least for high quality debt such as Treasuries?
This would mean Treasury rates hitting bottom about 2010. This is in a context
of a depression after a massive flight to quality. Junk will be worth nothing.
This 30 year decline in interest rates has happened
before starting 1820 and 1870. I just don't see why it can't happen again.
Now I agree that in the next PEAK in inflation we could
see hyperinflation here in USA. At that time metals will be the only haven. But
that peak is not due until 2040 or so. This is how I figure it:
1920 - 1980 = 60 years. Half of that is 30.
1980 + 30 = 2010.
It is just as simple as that. A depression is on the
horizon. Interest rates and the inflation rate will not bottom until the END of
the depression. We are just at the BEGINNING.
Because there will be a $US crash somewhere in this
depression the place to be will high quality NON-USA bonds. Try GIM, BEGBX,
AWF, FAX. These could easily double more in the next seven years.
Then switch 100% go gold and silver for the ride to the
moon on the next inflation wave.
I am skeptical of an imminent burst of inflation because
I have been hearing inflation rants for the past 23 years.
:we are now the largest debtor nation in the world
:and also we are on a floating currency not a gold
:standard. Structural deflation, absolutely,
:paper currency denominated assets appreciating in
:value? NO WAY!
Inflation != Interest rates
- Wed, Jul 16, 2003 - 10:50 AM ( )
If we are to follow the K-Wave blue print , we may find ourselves at the spike up labelled so on the
T-Bonds, with rates to decline further at some point later.
However, if history repeats, gold stocks will continue to
go up, and inflation is just about to start rearing its ugly head.
Thanks. Excellent. Everyone look carefully at the arrow . . . .
- Wed, Jul 16, 2003 - 12:22 PM ( )
labeled "interest rate spike" about 1931 at
early part of the last K-Wave winter. A depression and collapse of interest
rates followed. Unless the K-Wave fails us entirely that is what we face.
In the 30's gold was money. You could pay taxes and debts
with gold. Today gold is not accepted as payment for taxes or debts anywhere in
the world. Therefore is is not certain that gold will soar. It may because of a
collapse of $US but that remains to be seen. In Japan despite the deflation and
depression the public has not rushed to buy gold. That is a bad omen for gold
in the coming deflationary crisis.
:If we are to follow the K-Wave blue print
:,
:we may find ourselves at the spike up labelled so
:on the T-Bonds, with rates to decline further at
:some point later.
:
:However, if history repeats, gold stocks will
:continue to go up, and inflation is just about to
:start rearing its ugly head.
:
Exactly...junk will be worth nothing and the debt of a government
that is so massively into debt with no possible way out of it is just that
JUNK!
- Wed, Jul 16, 2003 - 11:26 AM ( )
Re: No offense taken, hope you won't either, but
- Wed, Jul 16, 2003 - 09:23 AM ( )
it seems whenever I retink my "simplistic
view", I lose money.
My explanation is much deeper, I understand the pros and
cons of my position better than most might think. No point in wasting bandwidth
here, I am committed until the trend changes.
If you were to refer me to a 4 page piece I would read
it. I am referring all who care about this issue to Hoisingtonmgt.com. ;
Economic Review; Second Quarter 2003. This is by far the best realistic take on
the bond situation I have come across, and there I hang my hat.
Have a great day, Mpls. !
:economy meaning lower yields are ahead".
:There is much more than that simplistic view that
:goes into the bond equation. If your statement
:was always true then please explain how yields
:dropped for 22 years while the US economy was
:going through one if its greatest growths periods
:of history in the 1980s and 1990s. Or are bonds
:another one of those "can't lose
:investments" that always go up? I believe
:you need to revisit the macroenomic reasoning
:behind your bond investment in much more detail
:than you currently are. If bonds are going to
:continue to go up then sir Greenscum has
:discovered the perpetual motion machine and none
:of us need to ever work again in our lives. We
:just need to sit back by the beach while
:Greenscam runs the printing presses and keeps
:dropping crisp hundred dollar bills from planes
:so that we can keep buying our margaritas. If
:you care to go deeper into this subject I would
:be glad to do so this morning before I go to
:work.
Thanks HooBear you too. Last question if we take out 5% in the long
bond rate convincingly will you reconsider?
- Wed, Jul 16, 2003 - 10:00 AM
Re: Fair question and I appreciate the non-persoanl back and
forth...
- Wed, Jul 16, 2003 - 10:20 AM ( )
I would be biting my lip so hard it would bleed.
Frankly, As far as bonds go, I've thrown my lot in with a
money manger, Hoisington. I've heard him speak 3 times. Their firm has a laser
focus on one item Treasury yields. They are not married to either direction,
they are only concerned that they know which direction is the trend, and in my
judgement, they are the best. When they say shorten up or get out, that's what
I'll do. Right now they say hold the longest dated, highest quality (I know we
can argue that one) which is the 30 yr. US Treasury.
(BC, this is free material, not copyrighted.)
Ooops, the market is open, I've got to sign off and go
pull weeds. See ya!
Fair enough, thanks for your replies, we are all in this to learn
from each other
- Wed, Jul 16, 2003 - 11:27 AM ( )
Re: HooBear, please take no offense in my comments but you really need
to reconsider your reasoning for being a bond bull, "this is a no growth
- Wed, Jul 16, 2003 - 04:27 PM ( )
I do stand by that statement, however. I was mostly an
adult throughout the 80s and 90s, watching the markets. There were cycles
within cycles of growth vs interest rate moves. It is simplistic to look at
those 20 years as one smooth declining yield, high growth event. Where we are
now, a perceived hyped growth, which is in reality low to no growth, will mean
lower yields ahead. Target 3% on the long bond, All IMHO of course. I will bail
when the time is right, no margaritas on the beach.
BTW: Congratulations on starting one of the longest
meaningful threads in a while.
:economy meaning lower yields are ahead".
:There is much more than that simplistic view that
:goes into the bond equation. If your statement
:was always true then please explain how yields
:dropped for 22 years while the US economy was
:going through one if its greatest growths periods
:of history in the 1980s and 1990s. Or are bonds
:another one of those "can't lose
:investments" that always go up? I believe
:you need to revisit the macroenomic reasoning
:behind your bond investment in much more detail
:than you currently are. If bonds are going to
:continue to go up then sir Greenscum has
:discovered the perpetual motion machine and none
:of us need to ever work again in our lives. We
:just need to sit back by the beach while
:Greenscam runs the printing presses and keeps
:dropping crisp hundred dollar bills from planes
:so that we can keep buying our margaritas. If
:you care to go deeper into this subject I would
:be glad to do so this morning before I go to
:work.
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