UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: Lokicious Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35931  
Subject: Re: TIPS/Treasuries Inflation Adjustment Date: 9/16/2008 2:00 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
If you are so convinced, are you shorting treasuries? The reason I mention this is because of a recent conversation I had with a friend (a very experienced, and very successful, trader who used to work for a national bank trading currency for them - I've mentioned him before on the boards) who thinks that "the mother of all short opportunities" is coming up. He thinks there will be a last gasp to increase liquidity and lower interest rates, and following that we may see slowly increasing interest rates for 5, 10, or perhaps even 15 years. Almost the exact opposite of what occurred to interest rates from the early 80's to the late 90's/early 00's.

Unfortunately, my predictions are always wrong, and the markets never seen to follow what common sense suggests, so I stay away from dangerous strategies like shoring.

But I agree with your friend that interest rates are much too low for the level of debt and have been kept down by a number of unsustainable factors (like he Fed or BOJ desperately pumping liquidity in as if there will never be consequences). And don't forget the SS surplus, which will rapidly reverse itself, I believe after next year (or maybe this year).

By the way, I took another look at Bloomberg, and the CPI differential for 5-year TIPS versus Treasuries was actually down to about 1% point. Makes no sense at all.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.