Guest Post: A Question On Risk: Part One Of Three

Tyler Durden's picture

Submitted by JM

A Question on Risk: Part one of three

The common belief is that long bond holders are suckers that always lose money.  But there is no denying their raw total return generating power.

Question 1:  Total Return, various asset classes: How can the long bond outperform the other, more risky competitors here?

Source:  Distressed Debt Investing

Possible answers: 

  • Inflation risk is overpriced… that doesn’t really explain the BarCap Aggregate underperforming SPOO and treasuries.
  • Risk in general is underpriced, and the long bond is the best way to derisk.  This is actually somewhat bogus, because you are taking massive term risk in the long bond.
  • You actually get compensated for taking term risk, more than any other risk.  Perhaps returns on other risks like credit risk, liquidity risk are distorted/subsidized/suppressed.  This is because governments must honor their obligations in order to keep rolling their debt.
  • Perhaps it is because they are almost uniformly hated as a long term investment, so those long are of the buy and hold persuasion, taking unlevered exposures.  They also act as hedges that are a small portion of their total portfolio decisions. 
  • Other, better answers?


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buzzsaw99's picture

Why is a 2% dividend on the S&P 500 considered a good deal while 3%+ on the 10y is considered crap? Perhaps because the stock market only goes up? I LMAO at equity buyers, they are the fools at the table.

baby_BLYTHE's picture

the FED owners worry little about 'risk' as they are guaranteed their juicy 6% dividend payment off the backs of every man, woman and child in this nation.

nearly 100 years of non-voluntary usury 

Maniac Researcher's picture

...since the Federal Reserve act in December, 1913. Of course, using a medieval term like "usury" is problematic in 2011.

To be fair, most of the ZH commenters imagine themselves in various other time periods other than their own...constantly pining for some unrealized "golden age" - suspiciously avoiding such pesky historical realities such as civil rights struggles, slavery, pervasive poverty, imperialism, red baiting, and pastoral economies that are nothing like modern ones, etc etc etc.

Why the pining for other periods? Because the whiny white guy armchair enthusiasts would rather pretend or hope for an apocalypse or time travel rather than take responsibility for the period they are in. It takes actual effort to pick up a shovel, build a house, learn how to grow food, educate the young, and take care of the helpless. Contrary to popular belief, not everyone has bootstraps - and certainly no one starts out self sufficient. In fact, self-sufficiency itself in our current era is a hotly contested subject and by no means a foregone reality. No amount of reading and reblogging of the Austrian school of economics is going to change that. But of course, they can try. Hence, the continued usage of outmoded terminology.

No - instead they'd rather talk shop about a parasitic financial system. They complain endlessly about it - but then still contribute to it by engaging in the meaningless trade of security instruments* they know are designed to reward wealth rather than labor. It's pure hypocrisy. Add a sprinkle of bigotry, a generous helping of misogyny, and a pinch of anti-semitism and you have ZH.

Tyler, when I explained ZH to Matt Taibbi, you know what he said? "Ah well, the wannabes need their sandbox, too."

Some people look at those with privilege who take advantage of others and react with horror and disgust. Others say, "how can I get in on that?" Ask yourselves: which group are you in?

[*What, you think hoarding PMs doesn't count? Ask a homeless person how much they care about your semi-affluent investment strategy]

Janice's picture

So then, what are you? The hypocrite, bigot or the Jew/woman-hater?  Not all of us here are traders, and some quite happy with the time period in which we have been born.  Tis a very narrow minded brush with which you paint the ZH masses.  

Maniac Researcher's picture

Your denial is only meaningful to this crowd.  Also, your attempt to deflect criticism of observable and frequent instances of bigotry is transparent. Of course, to a narrow individual, many brushes will seem skewed and unfamiliar.

Aristarchan's picture

I have never invested in anything, and will never invest in anything. I am probably narrow, but am not a bigot. There are many flavors here, and whether they are good or bad is only an opinion, not a truth.

agrotera's picture

Bravo, HEAR HEAR Aristarchan!!!

Maniac Researcher's picture

Feel free to continue deluding yourself about the nature of which opions are acceptable here and which are not. This is an observable phenomenon right here on this thread.

eureka's picture

Bla bla bla - listen carefully: It is perfectly OK to whine and complain and to be angry - I say LET IT ALL OUT - and then, yes, DO SOMETHING ABOUT IT. All this prevailing political correctness about "not complaining, criticizing, being negative" etc - is, guess what, an invention of corporate managers on behalf on their owners.

I say whine and bitch and take the axe to Wall Street, metaphorically and or directly. Nothing is meaningful to anybody except their own actions; the fact is no one, absolutely no one in pursuit of wealth and power cares about anyone else - THAT, is the nature of the beast. SO yes, there is hypocrisy all around, in a rotten system of rotten motives - and for that reason alone, I welcome any and all discontent expressed here or anywhere. My God, LET IT OUT, FOLKS.

delacroix's picture

so, you explained zerohedge, to matt taibbi. I just lost a lot of respect, for matt taibbi.

jeff montanye's picture

and the chart above starts with the longest and most massive bond bull market in history which on a long treasury yield basis began at 16% in the fall of '81 and reached its low yield (high price) to date in december '08 at 2.5%.  had the time frame been, say, '48 (again about 2.5%) to '81, the longest and most massive bond bear market, the lessons would seem different.

zhandax's picture

I think I get the drift...something about 'never confuse brilliance with a bull market'?

Maniac Researcher's picture

Hey Janice, read JW in FL's post below. We have our first Holocaust denier. Narrow brush, eh?

JW n FL's picture

I sourced and sited a group that says the Gas Chambers were not heavily used.. so how do you get that I am a Holocaust Denier?


Do you just make shit up as you go along.. or do you really believe this make believe shit you spew all over everyone?

Maniac Researcher's picture

The only thing here that smells here is your disingenuous jew-baiting. Save your poorly constructed historical notions for the wingnut crowd.

Now kindly go fuck yourself.

ATrillionSavedIsATrillionEarned's picture

I have a simple question in mind:

Why is it so hard to find a decent way to save or invest in this world of sophisticated financial instruments?

Even cash is suspect.

I find that Zerohedge answers that question better then any other website I know.


Maniac Researcher's picture

Yes, only ZH can give you what you need because the internet is *such* tiny place.

"..but I need my bigoted advice column! Think of my precious cash!"

Taku's picture

Err, could someone explain how or why the baltic dry index has flatlined in the last month or so...fact or humor (preferably together). Thx

tennisdude's picture

Honest question, is that index still useful at all? It seems like the past year would indicate otherwise?

snowball777's picture

But can't you just feel the austerity washing over you?

finance_t's picture

its because of the excess supply of ships built in 06-07.


Oversupply, not weak demand.

Marco's picture

Everyone is looking for supranormal profits ... the only way to get them is engineering abnormal events, bubbles, stag/hyperinflation, collapses. Everyone is looking for the economy to get destabilized one way or the other, so they can make higher profits ... and unfortunately some people have the political influence to see to it that economies get fucked that way.


Ultimately investments yields should be driven by real economic growth (which in present peak everything, Malthus was right, circumstances can't continue like in the past). All other money should be earned by the fruits of your labour ... but everyone wants money for nothing, investors as much as wellfare louses.

Maniac Researcher's picture

Marco, you sounded reasonable enough in your first paragraph; however by the second you have meandered into dubious territory.

1. Applying Malthus' late eighteenth and early nineteenth century predictions onto the twenty first century is highly problematic, at best. But don't take it from me; here's a quote from Mark Pingle in the Journal of Economic Education back in 2003:

"Malthus believed the Principle of Population was the main cause of poverty...preindustrial societies faced diminishing returns to labor and did not experience rapid technological improvement, conditions that made it reasonable to apply the Malthusian model...Industrialization has indeed led many economies to experience sustained improvement in labor productivity. It is not reasonable to apply a traditional Malthusian model to these economies, for diminishing returns need not constrain population growth if technology improves quickly enough."

To translate this quote simply: Malthus lived hundreds of years ago and could not have predicted the dynamics of the current economy. Thank you Marco, for adding credence to my point that ZHers tend to literally apply economic theories from centuries past literally in order to support their arguments.

2. Welfare louses? Yes. Everyone on welfare is a parasite. That's not an intellectually dishonest generalization at all...Something tells me your tendency toward generalization would make it difficult for you to understand economic theory.

W T Effington's picture

Please provide details on who here would:

like to live in other time periods

ignores civil rights struggle, slavery, pervasive poverty, imperialism etc.

does not produce anything (grow food, build a house, educate the young)

You are intellectually dishonest by taking singular quotes and applying them to all who may visit this site. I think most people here are simply trying to educate themselves. During the process we may spout off half baked ideas that we would later agree were incorrect. That in no way makes people here pathetic or unintelligent. Perhaps juvenile at times.

I guess we were not born perfectly wise and omniscient like you, bigot free, no indoctrinated racism, no learned misogyny. It must be nice to have made it already. What else is there to look forward to in your omniscient, elucidated, awakened, enlightened state. The journey of learning is the interesting part. Perhaps we should simply feel sorry for you.


Maniac Researcher's picture

Were you apologizing for the Holocaust denial below?

apologizing for bigotry..blah blah blah. 

don't type - read, dummy.

W T Effington's picture

I just expected to a "Maniac Researcher" to support his opinions with some facts. The bar was too high I suppose.

Maniac Researcher's picture

Yeah, I'm not falling for your "I'm going to create your framework for you and then create a test that will waste your time that you cannot possibly pass." Other ZHer's frequently use this transparently trollish rhetorical device. Your [failed] attempt to derail my argument is obvious.

My point continues to be simple and straightforward: In a community that condones hateful bias, how can much of the information they present be credible? My answer: It cannot.

This argument has a logical premise and observable data. This is why it annoys ZH fans - because it can only be countered with name calling, fallacy arguments, and censorship.

W T Effington's picture

Your application of a monolithic persona to all zero hedgers is prejudiced in and of itself. You simply are defining a people group(community) by an online website they may frequent. That is no different than what you are condemning. I guess you can join the mythical Bigot club.

Maniac Researcher's picture

If you think pointing out hypocrisy is equatable with bigotry, then you are truly deluded. You want to test this [flawed] logical framework? Try talking to people offline.

Your strategy of reversal may work on those who are not used to confronting fallacy arguments and discriminatory attitudes, but your simplistic "I know you are but what am I?" response rings hollow.

Keep on denying. Other ZHers were more than happy to back up my argument with their bigoted comments and junks right here on this thread. The more you deny, the more foolish you look.

JW n FL's picture
by Maniac Researcher
on Tue, 07/05/2011 - 23:49


Were you apologizing for the Holocaust denial below?

apologizing for bigotry..blah blah blah. 

don't type - read, dummy.


I sourced and sited a group that says the Gas Chambers were not heavily used.. so how do you get that I am a Holocaust Denier?


Do you just make shit up as you go along.. or do you really believe this make believe shit you spew all over everyone?

zKeyserSoze's picture

very good for my niece who knows everything, vegan that loathes humankind

no differential equation math problems, please

Maniac Researcher's picture

That was deep. Did you come up with that one all by yourself?

Surely, you are representative of the high caliber of intellectual rigor that comes with understanding the confluence of macroeconomics, politics, and culture - all the things ZH purportedly presents for discussion and meaningful analysis.

JW n FL's picture

as much as I appreciate Matt bringing his message of truth to the people.. I can say that I have not seen an article from Matt on the 400% more in lobby monies that Washington Lobby Whores collect than "We the People" pay those same Lobby Whores (on average with significant sourcing provided by


as for the Bigotry here.. I am no fan of anyone who does not like another person for their skin color.. but if you are in any way trying to dis-creditTyler for his staunch stance with regard to freedom of speech.. I can with clear conscience say from myself and I know a great many others here.. Fuck Off!


as for the peace love and lets talk it  out with the Bankers approach.. Fuck That! the Bankers and Washington DC are Guilty of Treason and as such should be dispatched to hell!


Get off your wanna be high horse and post some useful information that has been sourced and sited or shut the fuck up.


Netanyahu Got 29 "Bipartisan" Standing Ovations From Congress




Jewish Israel Lobby Dollars


  Lobbying Client(48 results)

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  527 Cmte(1 result)

  Top Contributor to Member(57 results)

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  Top Contributor to Candidate(12 results)

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  Candidate(3 results)

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Categories of People Found

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There are just as many, if not more, documentaries exposing the gas chamber hoax.

You mention Auschwitz, Even the Auschwitz museum director speaks out against the lie

In a dramatic and unprecedented videotaped interview, Dr. Franciszek Piper, senior curator and director of archives of the Auschwitz State Museum admitted on camera that 'Krema 1,' the alleged 'homicidal gas chamber' shown off to hundreds of thousands of tourists every year at the Auschwitz main camp, was, in fact, fabricated after the war by the Soviet Union -apparently on the direct orders of Josef Stalin.


What Piper said - in effect and on camera - was that the explosive 1988 Leuchter Report was correct: no homicidal gassings took place in the buildings designated as 'homicidal gas chambers' at Auschwitz.


Besides "eye witness" testimony, there is no evidence that gas chambers were ever used to execute prisoners.


Maniac Researcher's picture

Too bad "Hide All" doesn't work for your post.

Don't worry though, I'm sure your Holocaust denial post will be around here long after my minor pokes at the obvious hypocrisy of ZH is junked out of existence. You're right at home, Nazi troll.

Yen Cross's picture

 +1 Maniac. I guess this guy doesn't  know how to look @ a Polariod, or roll some cellulose.

JW n FL's picture

How is my post a Holocaust Denial?

I believe the sourced and sited information provided.. describes how the gas chambers were not used as often as I had been taught they had been used.


but once again my sharing sourced and sited information means???


you are full of shit, you dont research because you wont read.. so your name is a lie or more likely you would like to see yourself that way.. 


good luck and God Bless!

Yen Cross's picture

 So they starved, tortured,and shot them to Death. Happy now? P.S. I never junked you.


          I respect your thoughts. Yen.

agrotera's picture

JW n FL, I never junked you either, and i have seen your opensource posts before. The idea that ANYONE was ever subject to a gas chamber, is a horror to never forget....even thought the actual number of murders may be inaccurate.  Millions of people from other cultures were also killed by the Nazis, and although thatpoint might be left out of alot of textbooks, that poor reporting doesn't take away the unspeakable crimes that were committed against any one of the victims. 


Yen Cross's picture

  +~...   Good post. I'm not jewish, but I can spot a spade.

JW n FL's picture

I had never before reading what I stole from someone else's post.. any counter weight to the claims that the Jews were all gassed or worse.. I am in my late 30's and what I was taught in school does not align its self with the facts presented. I post things that I did NOT! know before and that I think bare some scrutiny by all. I dont like what happened to the Jews and I have Family buried in Europe, 2 Great uncles that come to mind.. so my Families contributions are in blood and my personal thirst for knowledge over rides political correctness or feel good only regurgitation.


I post thought provoking information.. that is my goal sometimes.. or to stir the pot.. I like that as well.. something to get the people involved and feeling.. instead of sitting on the side lines not caring one way or the other!


Taking sides is a good thing! If you dont Stand for Something you will fall for anything! ok corny stuff dun!


I could as well mention this is "Fight Club" NOT! Politically Correct Land of the Pussies!

Sockethead's picture

I seek investments that I believe will enable me to both protect and grow wealth.  I also believe the finanical system is corrupt and parasitic.  I fail to grasp how this makes me a hypocrite.


The financial system is based on fiat currency which I believe has run it's course.  So purchasing PM's provides an investment that I believe will protect (what little) weath I have accumulated while also serving as a great way to protest/fight against a corrupt monetary system.

pesamystik's picture

Maniac Researcher, you have been outed as a Jew. Your goal on this board is to basically subvert any organizing and criticism of a Jewish led government. Your pointing at "White guys" as the problem on ZeroHedge shows your outright hostility towards White people, who Jews have typically viewed as a threat. 

Furthermore, even if a lot of posters on here may be misguided about the past, that does not mean that there is not a financial system that is greedy and fucked. Just because people choose to play in that system while at the same time disliking the system also does not discount that the system has objective problems. You, like all Jews, love to cloud the issues on the table. You are constantly screeching and hollering in multiple threads that Tyler has to censor the boards here. Guess what, its his website. Keep your Jew moaning to yourself.

Maniac Researcher's picture

Thank you, pesamystik, for demonstrating exactly the point I was trying to make. Any reader not in denial about the nature of ZH should pay attention to the number of junks this comment has vs. mine and others assenting. For the new and uninitiated, if a comment receives enough junks, it is removed. I'd call that a "community action." Because such action exists here, it is reasonable enough to make observations based on the community's comments and activities.

Again, to be clear - the point I am making is simple: If this community tolerates open and extreme bigotry, then the information presented here is suspect.


Agent 440's picture


Wow. He's met Matt Taibbi. golf clap.

Maniac Researcher's picture

...and you avoid addressing Taibbi's comment about your community, for good reason -- because you look foolish and hypocritical. I look forward to the next time Tyler reposts another one of his articles.

DrunkenMonkey's picture

Guilty, as charged. The thing that really scared me about ZH though, was the amount of traction that Glenn Beck seems to have amongst some of the posters.And yet information may be interpreted in a number of ways depending on the reader's viewpoints and the information itself should not be blamed for the reader's perception.