Via: Reuters
“If I were the Chinese, I wouldn’t buy another single U.S. government bond,” said Rogers, who was speaking by teleconference in an interview with Reuters. “I can’t imagine anybody is going to give the U.S. government money for 30 years at 2.5 percent or even 4 percent or 4.5 percent. It’s mind boggling to me.”
China in 2008 became the largest holder of U.S. Treasuries, surpassing Japan.
Prices of long-term U.S. Treasury bonds appear dangerously overstretched after a soaring rally, which began soon after the Lehman Brothers bankruptcy.
The yield on the benchmark 10-year Treasury note, which was trading over 5 percent in June 2007, hit a five-decade low of around 2 percent in mid-December. Currently, the yield on the 10-year note is around 2.43 percent.
“All the big creditors are going to be slowly cutting back …more and more diversification against and away from the U.S. dollar — and away from long-term bonds,” Rogers added. (Reporting by Dan Burns and Jennifer Ablan; Editing by Theodore d’Afflisio)
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13. January 2009 at 1:26 am
There will be a time to short the LT bond using TBT. But TLT is oversold, TBT is overbought, the Yen and the $USD look strong, commodities are getting smacked around again… so there is still some deleveraging going on. I am hoping TLT spikes to 120 again so I can take a shot at short the LT using TBT.
13. January 2009 at 1:50 am
Agree 100% Mike. I was about to do that but did not have sufficient cash as tuition bill came .
12. February 2009 at 4:38 pm
I’m a bit scared of the TBT, read this
http://news.morningstar.com/articlenet/article.aspx?id=271892
http://www.thestreet.com/story/10457663/1/the-perils-of-the-proshares-ultrashorts.html