Monday, October 10, 2011

Just how stretched is the 10y?


Really stretched.  The bottom histogram is the percentage which the 10y yield deviates from its 10y (linear regression) trend. We've only been here once before, during the height of the credit crisis in late 2008/early 2009.
Even if you're bearish on the global economy, or expect hard deflation, the pay-off in betting large on US government bonds seems particularly unattractive at this point.

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.