Leading investor Jim Rogers said on Thursday he plans to short U.S. Treasury bonds if their price rises much higher. "If the bond goes up another 3 or 4 points, I for one am going to sell it short," he told Reuters Insider in an interview from Singapore, where he is based.
China, the biggest buyer of U.S. Treasury securities, trimmed its holdings for a fourth straight month in February and Japan boosted its holdings one month before a devastating earthquake hit the country.
When PIMCO Total Return (symbol PTTAX), the largest bond fund in the world, not only sells, but shorts—or bets against—treasuries, it is as if Moses has descended with tablets and has a frown on his face.
A former adviser to China's central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group's website.
Wall Street banks are cutting their holdings of Treasuries at the fastest pace since 2004 as the world’s biggest bond firms bet that the economy will strengthen and demand for higher-yielding assets will increase.
With the new tax cuts, rating agencies should downgrade U.S. government debt to junk. Economists, pundits and politicians had little choice but to endorse the tax deal between President Obama and Congressional Republicans, because snapping back to pre-Bush tax rates would crush the economic recovery. But Washington exhibited not even the shadow of self-restraint and cut taxes far beyond what is needed or smart.
By Moses Kim
I’ve been consistently warning that U.S.government bonds will eventually implode. Using history as a guide, I know that when the sell-off in bonds begins, it will be very swift. The magnitude of panics are inversely correlated to the degree in which investors are deluded. Some of the most ignorant comments I’ve ever heard have been on the bearish side for gold; hence panic buying in gold should be pretty substantial. As for bonds, take a look at the dramatic spike in 10-year treasury yields since Helicopter Ben decided to embark on QE2. As I’ve been saying, deflationists just don’t get it. In my opinion, it is likely that the early stages of the bond bubble collapse have begun.
US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks.
[[wysiwyg_imageupload:869:]]By Levente Mady
The bond market just continues to get annihilated heading into the Holiday Season. Bonds remained under pressure despite the decent results for the 10 year and 30 year Treasury auctions last week. In spite of the relative cheapness of bonds compared to stocks, the bond market remained stuck in the mud even after the auctions were out of the way. Stocks meanwhile continue to merrily grind up into year end. Negative seasonality went on Holidays this year as stocks did not even flinch during the seasonally negative months of September/October or the first half of December. Commodities on the other hand are not looking quite as bullet proof as they appear to be a little more adversely impacted by the recent back up in rates.