Gleacher Head Of Rates Shares A Very Bearish Outlook On Treasurys

Tyler Durden's picture

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TaxEstate's picture

Just another reason to continue melting the stock market up. No reason to buy bonds, no incentive to buy Cd's or put into a MM fund, real estate is still crap... That only leaves the circle jerk that is the speculation in stocks and commodities... Way to go, Bernanke.

Highrev's picture

Now if only the Fed can just get the rest of the world to play along.

edwardscpa's picture

That last paragraph just struck a chord with me.    BTFD I guess.

10kby2k's picture

Why the fuck haven't treasuries meaningfully sold off?

Fed or no fed. 

Tater Salad's picture

Treasuries haven't and probably won't sell off much...remember, they're the talles midget in the room.

 

 

truont's picture

[Equities] are the new risk free assets not industrialized trashed sovereign rate markets.

Wow.

Boston's picture

He's right, but not in the immediate short-term, ie. the next 60-90 days when QE2 winds down.

In 2010, when QE1 ended, the funds freed up from the sale of risk assets  flocked into Treasuries.  There's no reason why the same thing won't happen this time.  Where else can hundreds of billions of dollars go, quickly and efficiently?

Later, when the Fed steps in with QE3, the reverse will happen: money will stampede back out of Treasuries, and rates will resume climbing.

Go long Treasuries in anticipation of Risk-Off after QE2 ends.  Then go short Treasuries as the Fed prepares to launch QE3 to "help" the markets regain their lost ground.

 

 

lincolnsteffens's picture

Boston boy, I hope you are right. I have a small position in TLT and a buy stop on TBT not far from the old inverse when the TLT peaked. That is one of my short to mid term strategies. I am however considering living a less active life of trying to figure out how to stay value positive in an inflationary environment. Translation- own primarily physical precious metals and, in the words of that great philosopher ;-) Timothy Leary, "Tune in, turn on and drop out." All the daily crap I have to sift through to feel in control is starting to wear on me. This is no way for a human being to live.

ghostfaceinvestah's picture

Exactly, why is this so fucking hard for people to understand?  Are people immune to the fact that Bernanke is printing $7B DAILY to prop up the markets?  What happens when that ends?

You got it, Spring of 2010 all over again, and if Bernanke doesn't step back in with more QE, the selloff won't stop until S&P @600.

zaknick's picture

You mean 666.

They are the 666 banksters from he'll (shit, maybe even reptilian!).

buzzsaw99's picture

He called equities "hard assets". heh

Johnny Lawrence's picture

What do you know...another bond bear.

rayban's picture

The only perpetual asset I know is a Consol. I guess somebody considered Enron and Lehman perpetuals too...

brandy night rocks's picture

The argument about reallocation into equities as a currency-devaluation defensive trade is sorta compelling, but if it were true wouldn't you expect the allocation to be more to blue chips with strong balance sheets?  But the real growth in the retardo meltup since Jackson Hole has been in the ultra-speculative space.  Run the Russell 2000 vs. the Dow since last September.

 

WTF do I know, though?  A look at my performance over the last two years will tell you how a contrarian thesis fares during a centrally planned rally.

ghostfaceinvestah's picture

Why hold equities at all during a currency devaluation?  That might have been necessary in Weimar Germany, or Zimbabwe, but in our markets you can easily get exposure to commodities directly, bypassing the corporate middle men.

That being said, if/when QE ends, it will all go to shit - commodities, PMs, equities, etc.  Bonds will be the asset class to hold.

NotApplicable's picture

"Gamblers place your bets!"

As Trav said yesterday, "why produce when you can instead participate in the government sponsored ponzi?"

Oh well, who needs real wealth anyway, when there's always more chips to be collected?

Tater Salad's picture

2010 Redux, hold on to your chairs boyz...gonna get bumpy sooooon

Urban Redneck's picture

In the past, the Bernank and his predecessors had a group of friends, the Crises, that they would call for push when they got stuck in the mud or snow and didn’t want to burn out the engine on the Suicide Machine.  Right now there is whole gang of Crises milling about- Libya, Bahrain, Egypt, Syria, Iran, Fukushima, PIIGS, but none of them are pushing foreign money (gas) into the US engine, because the US$ is no longer viewed as a safe haven.

bankruptcylawyer's picture

 perhaps it is correct in the horizon of months. in the long run it is wrong.  just because debtholders are losing doesn't mean it is a zero sum game with equity holders . my friend, everyone can lose together and they will.

in a real bankruptcy the equity holders get wiped out, before the debtholders.