Take #BillGross. In the past there have instances where Gross made very strong statements about the future of #bonds. For example, when the Fed decided to reduce its purchases of bonds, Gross called for the selling of bonds because in his words " who will buy bonds? " if the Fed is not there. He happen to short the bond market and this statement is consistent. As it turned out, he was wrong and had to cover his short position in a hurry. Soon after the Fed' s announcement of winding down QE, bond yields fell steadily.
Just another shortage of #bonds!!!!! And we are not in a bond bubble. There are not enough sound bonds!!! Bad collateral is key to this Euromess just like it was in the subprime financing in 2007.
Depends on whether the Fed is perceived as behind the curve or not. But I agree, it is best to have balance in this atmosphere where the economy is stable and the Fed is in hike stance. I am however, long US Treasury #bonds as a contrary (to the rate hike story) play while being long stocks (and cash) as well. #Gold is a long-term portfolio balance to me. #Silver more spec.
#Bonds are an option as a long term investment but the question is are they more or less secure or risky than stocks or #ETFs. Since yields can change based on government defined interest rates, I would suggest a strong word of caution. I would suggest a bond investment within an ETF would lower the level or risk for longer term investors, any thoughts?
Smart move sort of. #Bonds are bad in rising rates and #inflation. Strangely, stocks are even worse if this gets worse. In the meantime though, stocks look a bit better if things rates and inflation don't get worse, especially commodity related stocks.
The interesting thing to see is techs and high growth stocks not doing so well. This is usually a bearish sign on growth. The market is quite strange recently and not clear on real growth going forward, only very firm on a belief of rising rates.
The only other option is the issuance of #HelicopterMoney or 100 year #bonds, or perpetual bonds. Perpetual bonds have been issued by the government of the US before.
We know #bonds are used for collateral in derivatives markets. They must bolster #derivatives bets that may protect stock positions. If that is really huge, then the stock market could be constrained from going much higher. The new normal may be changing the relationship between stocks and bonds.
So, essentially, this is just another way to destroy the appetite for higher #yields. Clever. And investors can use the #bonds as collateral, get interest on them, and if they don't get the principle back or are 6 feet under, no big deal.
The Fed stopped buying #bonds when #QE ended and yields still declined. The point about lack of yield being an attack on capitalism is interesting and yet, the Fed has succeeded in establishing massive demand for bonds through use as collateral.
Without wage inflation there is not much #inflation, Moon, only a tax on workers. Asset inflation is just a #tax on people who work and who are on fixed incomes. It doesn't impact massive demand for #bonds as collateral and bank capital.
And real #HelicopterMoney should have nothing to do with credit as it should be in the form of a gift of base money to all the people equally. And it should not be repeated once off the negative. 2 percent #inflation is never reached, and really declining GDP and declining inflation along with new demand for #bonds sets the stage for deflation, not inflation. But libertarians don't fear #deflation because they think it was what caused the 1921 depression. But there never was a credit crisis in 1921. Real deflation is bad, very bad. So far growth is slow, perhaps that is what gold bugs have always wanted, but it gives rise to a demagogue running for president.
Gary... interesting comment. However, I would not use surplus funds to buy a new car. When the system finally cracks, there will be a huge glut of new and semi-new cars at a huge discount.
How are investors paying down debt?? U.S. debt is now $19.4 trillion. How is that heading lower? Maybe you can clarify what you mean.
Lastly, Government #Bonds are like gold until expensive oil production declines. Cheap #oil production peaked several years ago, now we are waiting for the peak of expensive oil. Actually, if we don't see tens of trillions of Helicopter money dumped on the market shortly, expensive oil production may have already peaked.
Government bonds are #DEBT. The world is full of debt up to their eyeballs. Without growing energy production, this debt will not be paid back. #Gold and #silver are two of the best assets to own going forward.
I slightly disagree. I believe they fire their bullets at the wrong targets, creating imbalances. But if they have no bullets, we are looking at hurtful nominal interest rates on bonds in the not so distant future. #Bonds are in massive demand for the derivatives markets. It is skewing the reality of the bond market. It makes bonds behave strangely, with yield in relentless decline.
Do Bond Prices Have Momentum?
Take #BillGross. In the past there have instances where Gross made very strong statements about the future of #bonds. For example, when the Fed decided to reduce its purchases of bonds, Gross called for the selling of bonds because in his words " who will buy bonds? " if the Fed is not there. He happen to short the bond market and this statement is consistent. As it turned out, he was wrong and had to cover his short position in a hurry. Soon after the Fed' s announcement of winding down QE, bond yields fell steadily.
Two More Spanish Banks Hit By Contagion: Another Deflationary Bust Coming Up
Just another shortage of #bonds!!!!! And we are not in a bond bubble. There are not enough sound bonds!!! Bad collateral is key to this Euromess just like it was in the subprime financing in 2007.
The No.1 Silver Stock For 2017 (SPONSORED POST)
Depends on whether the Fed is perceived as behind the curve or not. But I agree, it is best to have balance in this atmosphere where the economy is stable and the Fed is in hike stance. I am however, long US Treasury #bonds as a contrary (to the rate hike story) play while being long stocks (and cash) as well. #Gold is a long-term portfolio balance to me. #Silver more spec.
What You Need to Know About Premium Bonds
#Bonds are an option as a long term investment but the question is are they more or less secure or risky than stocks or #ETFs. Since yields can change based on government defined interest rates, I would suggest a strong word of caution. I would suggest a bond investment within an ETF would lower the level or risk for longer term investors, any thoughts?
Investors Continue To Sell Bonds Buy Stocks
Smart move sort of. #Bonds are bad in rising rates and #inflation. Strangely, stocks are even worse if this gets worse. In the meantime though, stocks look a bit better if things rates and inflation don't get worse, especially commodity related stocks.
The interesting thing to see is techs and high growth stocks not doing so well. This is usually a bearish sign on growth. The market is quite strange recently and not clear on real growth going forward, only very firm on a belief of rising rates.
Bannonomics, Not Trumponomics Will Crush The Economy
The only other option is the issuance of #HelicopterMoney or 100 year #bonds, or perpetual bonds. Perpetual bonds have been issued by the government of the US before.
New Rules Will Derail Europe’s Financial System In 2018
So, banks are hoarding #bonds for this new rule and #banks are hoarding bonds as non banking financial institutions play a dangerous game of basing their collateral stability on equities as collateral. That appears to be another slippery slope: www.talkmarkets.com/.../bizarre-collateral-in-securities-lending-exposed-by-bank-of-mellon
Deutsche Warns Of Imminent "Domino Impact" For Stocks From Bond Carnage, Soaring Dollar
We know #bonds are used for collateral in derivatives markets. They must bolster #derivatives bets that may protect stock positions. If that is really huge, then the stock market could be constrained from going much higher. The new normal may be changing the relationship between stocks and bonds.
Austria Sells €2 Billion In 70 Year Bonds, Pushes Global Duration Risk To Record High
So, essentially, this is just another way to destroy the appetite for higher #yields. Clever. And investors can use the #bonds as collateral, get interest on them, and if they don't get the principle back or are 6 feet under, no big deal.
Introducing Yield Purchasing Power
The Fed stopped buying #bonds when #QE ended and yields still declined. The point about lack of yield being an attack on capitalism is interesting and yet, the Fed has succeeded in establishing massive demand for bonds through use as collateral.
Greenspan Gets One Right: Here Comes Stagflation
Without wage inflation there is not much #inflation, Moon, only a tax on workers. Asset inflation is just a #tax on people who work and who are on fixed incomes. It doesn't impact massive demand for #bonds as collateral and bank capital.
Greenspan Gets One Right: Here Comes Stagflation
Agreed, however, #bonds are very rate sensitive, so if rates rise the bond losses will pile on into a bloodbath even if no one sells.
Four Stages Of Monetary Madness
And real #HelicopterMoney should have nothing to do with credit as it should be in the form of a gift of base money to all the people equally. And it should not be repeated once off the negative. 2 percent #inflation is never reached, and really declining GDP and declining inflation along with new demand for #bonds sets the stage for deflation, not inflation. But libertarians don't fear #deflation because they think it was what caused the 1921 depression. But there never was a credit crisis in 1921. Real deflation is bad, very bad. So far growth is slow, perhaps that is what gold bugs have always wanted, but it gives rise to a demagogue running for president.
The Subprime U.S. Economy: Disintegrating Due To Subprime Auto, Housing, Bond & Energy Debt
Gary... interesting comment. However, I would not use surplus funds to buy a new car. When the system finally cracks, there will be a huge glut of new and semi-new cars at a huge discount.
How are investors paying down debt?? U.S. debt is now $19.4 trillion. How is that heading lower? Maybe you can clarify what you mean.
Lastly, Government #Bonds are like gold until expensive oil production declines. Cheap #oil production peaked several years ago, now we are waiting for the peak of expensive oil. Actually, if we don't see tens of trillions of Helicopter money dumped on the market shortly, expensive oil production may have already peaked.
Government bonds are #DEBT. The world is full of debt up to their eyeballs. Without growing energy production, this debt will not be paid back. #Gold and #silver are two of the best assets to own going forward.
Steve
Are Central Banks Out Of Bullets?
I slightly disagree. I believe they fire their bullets at the wrong targets, creating imbalances. But if they have no bullets, we are looking at hurtful nominal interest rates on bonds in the not so distant future. #Bonds are in massive demand for the derivatives markets. It is skewing the reality of the bond market. It makes bonds behave strangely, with yield in relentless decline.