Bond Prices Peaking, Yields Bottoming?
In the chart below you’ll find 30 year US treasury bond prices. For the past ~30 years those prices have traveled within an upward sloping channel as yields have continuously fallen, b/t lines (1) and (2). The recent plunge in…...
Recent Collapse & Reversal in JGB Yields Hints at Nikkei Upside if History Holds
From their late 2014 swing high of ~50 bps, 10-yr JGB yields had collapsed recently all the way to ~20 bps as of 1/19/15. In the post Asian Financial Crisis world, or what we could fairly call that period in…...
U.S. Rate Structure Set to Move Higher
Had a recent post on the 10-yr bond that suggested a break-down in prices (and rise in rates) was very close. That prognostication has yet to materialize. Having said that, I’m no less convinced that it will indeed materialize; it’s…...
30 Yr Support on the Long Bond & Its Cycle-Defining History
In the chart below I plot the 30-yr UST price from the early 1980s onward. Note how well-behaved prices are along support line (1) which has been in place since 1985, or nearly 30 years ago! In fact, it is…...
US Bond Price Downside: Time to Ride the Second Wave?
We began espousing the idea that bonds had peaked on a secular and cyclical basis in spring 2013. While it’s been very fashionable to hold such a view for many, many years now (hyperinflation has been imminent since QE1 in…...
Sigh…
Using monthly Shiller data, over the past year Dec-12 to Dec -13, the yield on the 10 Yr UST has risen ~75% to 300 bps from ~170 bps; concurrently, the SPX has risen ~28% to its current level. With this…...
Fair Value for the 10 Yr?
Risk-free, 10 Yr UST rates DO influence pricing on Aaa-rated corporate issues. As such, the Fed’s bond buying program of government securities has invariably pushed yields on Aaa-rated issues lower than they would be ex the Fed’s influence, resulting in…...
Recent Decline in Rates to Continue Near-Term but Likely to Reverse over Time
Dating back to July of last year I’ve advocated the idea that bond yields were nearing the end days of their secular move lower. Beginning in May of this year we explicitly began to communicate the precise end of that…...
Trailer Park Trash Could Become “Bourgie”
Resigned to the junk bin for 30 years, trailer park trash – manufactured housing – has the potential to become “bourgie”. Talk about places nobody wants to invest! And for good reason; this industry and these stocks have been perpetual…...
As Suggested in May, Risk-Free Rates Have Risen Materially
We have absolutely nailed the US treasury/rate trade (and its implications to other asset classes) and have no shame in stating as much. We were prescient enough in October of last year to suggest that if one were bearish US…...