Goldfinger Posted August 21, 2007 Share Posted August 21, 2007 (edited) http://www.bloomberg.com/apps/news?pid=206...&refer=home ``The flight to safety may be diminishing a bit,'' said Holly Liss, a bond saleswoman in Chicago at Citigroup Global Markets Inc. ``We're seeing more calming of the market as T-bill rates come back to normal.''The three-month bill yield climbed 0.39 percentage point to 3.59 percent at 2:47 p.m., rising for the first day since Aug. 13. The increase is the biggest since Dec. 26, 2000. I don't buy this story. Why should the demand for the highest safety (according to the pundits) slump now? Makes no sense. cgnao has warned several times that bonds could be a trap for all of us. I personally also think that this sudden demand for 'safety' is China's last chance to dump treasuries big time (EDIT: and getting value for it). Opinions? Edited August 21, 2007 by Goldfinger Quote Link to comment Share on other sites More sharing options...
spoon Posted August 21, 2007 Share Posted August 21, 2007 More like Dodds of the Treasury and the Fed's Lacker providing no hints of any Fed Funds rate cut after several rumours this morning they'd cut today. Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 More like Dodds of the Treasury and the Fed's Lacker providing no hints of any Fed Funds rate cut after several rumours this morning they'd cut today. Volatility is it then, so to speak. Mmmmh. Quote Link to comment Share on other sites More sharing options...
Spikey1 Posted August 21, 2007 Share Posted August 21, 2007 Volatility is it then, so to speak. Mmmmh. So im Mr Ignorant.. if the bonds tank it what will that do to the rest of the markets, economy? Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 So im Mr Ignorant.. if the bonds tank it what will that do to the rest of the markets, economy? Say, stocks tank, bonds tank -- where do you invest in? ----> commodities! Gold will go to the moon, and bread and chocolate will become unaffordable. Quote Link to comment Share on other sites More sharing options...
Spikey1 Posted August 21, 2007 Share Posted August 21, 2007 Say, stocks tank, bonds tank -- where do you invest in? ----> commodities! Gold will go to the moon, and bread and chocolate will become unaffordable. So in the current climate if bonds are no longer an option is it safe to assume investers will get out of stocks too and get into commodities that are far "safer" Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 (edited) So in the current climate if bonds are no longer an option is it safe to assume investers will get out of stocks too and get into commodities that are far "safer" The Fed might cut rates and is liquefying anyway. In other words, they will blow a new bubble. What will be the bubble this time? Everyone believes in commodities demand from China, and surely, it's not only a belief. The equilibrium price of gold is somewhere between $10,000 and $50,000 -- nothing easier to push it there if the combined speculators of the world start buying. I am just speculating here, of course. But, yes, where indeed will the money go when bonds AND stocks slump? Edited August 21, 2007 by Goldfinger Quote Link to comment Share on other sites More sharing options...
spoon Posted August 21, 2007 Share Posted August 21, 2007 I think it's a good idea to BEGIN buying gold here. I'd still keep two thirds of your powder dry, however. Quote Link to comment Share on other sites More sharing options...
Luminist Posted August 21, 2007 Share Posted August 21, 2007 So in the current climate if bonds are no longer an option is it safe to assume investers will get out of stocks too and get into commodities that are far "safer" "Safer" is not the first word that immediately springs to my mind. I am invested in a broad range of commodities and I have got creamed in the last couple of days. Every day since last Thursday is like a round from a Rocky film when he gets the living daylights beaten out of him. I'm waiting for the comeback round, it has to come soon! Best, L Quote Link to comment Share on other sites More sharing options...
kilroy Posted August 21, 2007 Share Posted August 21, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=homeI don't buy this story. Why should the demand for the highest safety (according to the pundits) slump now? Makes no sense. cgnao has warned several times that bonds could be a trap for all of us. I personally also think that this sudden demand for 'safety' is China's last chance to dump treasuries big time (EDIT: and getting value for it). Opinions? Fed using another tool (not Poole this time, but the fee dealers are charged to borrow treasuries)) http://www.bloomberg.com/apps/news?pid=new...id=aFhWILT_OTzA Quote Link to comment Share on other sites More sharing options...
Sebastian Posted August 21, 2007 Share Posted August 21, 2007 (edited) More like Dodds of the Treasury and the Fed's Lacker providing no hints of any Fed Funds rate cut after several rumours this morning they'd cut today. Rumours were rife yesterday evening that the Fed would cut rates today and the Dow's late surge Monday was attributed to these rumours. Soft commodites are a great haven. People will always need food and drink. Edited August 21, 2007 by Sebastian Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 Soft commodites are a great haven. People will always need food and drink. Some won't be able to afford them. First they got repossessed, then they lost their job, then the big money moved on to soft commodities, and then they couldn't afford the food. Bubbles = dangerous. Goldstandard = less bubblelicious. Quote Link to comment Share on other sites More sharing options...
Sebastian Posted August 21, 2007 Share Posted August 21, 2007 Some won't be able to afford them. First they got repossessed, then they lost their job, then the big money moved on to soft commodities, and then they couldn't afford the food. Bubbles = dangerous. Goldstandard = less bubblelicious. Well, when down to their last few pennies, they may not be able to buy houses, cars, clothes and shares, but they'll sell all they have left to eat those soft commodities. Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 Well, when down to their last few pennies, they may not be able to buy houses, cars, clothes and shares, but they'll sell all they have left to eat those soft commodities. That's exactly what I mean. Tragic. Quote Link to comment Share on other sites More sharing options...
refusnik Posted August 21, 2007 Share Posted August 21, 2007 I think it is now the best time to climb onto the bread and milk ladders while it's not too late. I don't want to be aspiring first time buyer for loaf of bread for who knows how many years. Quote Link to comment Share on other sites More sharing options...
scott666 Posted August 21, 2007 Share Posted August 21, 2007 First they got repossessed, then they lost their job, then the big money moved on to soft commodities You do realise that you have these statements in completely the wrong order don't you? Quote Link to comment Share on other sites More sharing options...
domo Posted August 21, 2007 Share Posted August 21, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=homeI don't buy this story. Why should the demand for the highest safety (according to the pundits) slump now? Makes no sense. cgnao has warned several times that bonds could be a trap for all of us. I personally also think that this sudden demand for 'safety' is China's last chance to dump treasuries big time (EDIT: and getting value for it). Opinions? You probably missed out on the big news of the last week then, which was the huge crash in yields in 1 month and 3 month treasuries. This is called a rebound Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 21, 2007 Author Share Posted August 21, 2007 You do realise that you have these statements in completely the wrong order don't you? In the US many are already repossessed, but the recession is yet to come. But this was not about the chronological order really. You probably missed out on the big news of the last week then, which was the huge crash in yields in 1 month and 3 month treasuries. This is called a rebound But why should there be a rebound? Nothing really has improved. Quote Link to comment Share on other sites More sharing options...
carseller Posted August 21, 2007 Share Posted August 21, 2007 (edited) I very much think the friends Marc Faber and Jim Rogers have been right so far. I think the next move will be a bear market in stocks, and some kind of correction in commodities that are in a bull market, this correction will be the time the train leaves the station, be ready. Some say that we have had a bear market in stocks, but this is only true in the US, most countries have had a big bull market, because they have gotten the liquidity from the US as commodity producers, or as producers of goods, like asia. I think oil can come down to 45 dollars in less than 6 months, and I think a great buy is the product DUG. I think this is the perfect moment to buy. I am 100% sure, there will be a huge market in the US for mini cars, the time of the huge Chevy's are all over. Edited August 21, 2007 by carseller Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 24, 2007 Author Share Posted August 24, 2007 (edited) Foreign holdings of Dollars and treasuries at the New York Fed seem to have gone into reversal. Have a look at the chart: http://www.jsmineset.com/cwsimages/Miscfil...r_8-23-2007.pdf If this is the beginning of a trend, and I stress the word, “if”, the repercussions would be enormous to the US interest rate world. We have already seen what is taking place with the buyer’s strike in the credit market and the ripple effects occurring throughout the rest of the economy and markets as a result. Should we learn that foreign Central Banks are pulling back on their buys of US debt, I would be enormously concerned about the stability of US interest rates. http://www.jsmineset.com/ As cgnao pointed out before, government bonds might be a trap and could wipe you out (like stocks...). Edited August 24, 2007 by Goldfinger Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 24, 2007 Author Share Posted August 24, 2007 On another note: “Ben Bernanke is looking hawkish to me, given the shock of what happened on Monday when yields on 3-month US Treasury notes plunged at the fastest pace ever recorded, a panic flight to safety that no living trader had ever seen before. Why? Because trust had collapsed to such a degree that players with a lot of cash no longer believed it safe to leave wealth in bank accounts, or the money market funds of brokerage companies - (exposed as they are to short-term commercial paper and subprime CDOs). This did not occur after 9/11, or in the heat of the October 1987 crash. Nor did was there such a banking panic in October 1929. (it hit in August 1931). If you think this is of no importance, or that this will pass swiftly, you have a strong nerve.” “When you have a run on the money markets like this, it is bound to spill over into the real economy,” said Albert Edwards, global strategist at Dresdner Kleinwort. http://www.dailyreckoning.com.au/markets-unsure/2007/08/24/ Quote Link to comment Share on other sites More sharing options...
nigwell Posted August 24, 2007 Share Posted August 24, 2007 As cgnao pointed out before, government bonds might be a trap and could wipe you out (like stocks...). If you bought shorts and held until redemption, how would that happen? Quote Link to comment Share on other sites More sharing options...
Goldfinger Posted August 24, 2007 Author Share Posted August 24, 2007 (edited) If you bought shorts and held until redemption, how would that happen? If you rollover short-term bonds, inflation will grill you. Long term bonds, you might just have a slump (EDIT: plus inflation on top). Meanwhile, wheat has doubled in price over the last 12 months, I've read. Which of your investments have doubled over this period? Edited August 24, 2007 by Goldfinger Quote Link to comment Share on other sites More sharing options...
Timm Posted August 24, 2007 Share Posted August 24, 2007 On another note: I don't know much about treasuries, but on another China note, it appears the bank of China is holding more US sub-prime than expected: http://www.bloomberg.com/apps/news?pid=206...&refer=home "Bank of China Ltd. had its biggest drop since going public last year after the nation's second- biggest bank said it holds almost $9.7 billion of securities backed by U.S. subprime loans, the most of any Asian company. " Quote Link to comment Share on other sites More sharing options...
nigwell Posted August 24, 2007 Share Posted August 24, 2007 If you rollover short-term bonds, inflation will grill you. Long term bonds, you might just have a slump.Meanwhile, wheat has doubled in price over the last 12 months, I've read. Which of your investments have doubled over this period? My house. Quote Link to comment Share on other sites More sharing options...
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