Wednesday, October 08, 2008

Doomsday Propaganda

Neither time nor inclination today to write about this financial disaster myself.

If you need something cheerful to read, click here.

Today, I tried to buy TBT - the Ultrashort long term Treasury ETF at 56.50 and at 58.65 today but just missed it both times. It closed at 59.01. Hopefully I won't have to chase it much higher.

Yes, I am trying to ease back into my horrible Treasury short.

Happy bottom-picking to all!


Taylor Conant said...

You're shorting treasuries already?

What is a good resource on treasuries, bonds and the bond market? Do you know of one? Or how did you learn it?

CaptiousNut said...

It's pretty basic. The government borrows money (everyday) by issuing bonds. These bonds have a yield that investors - at the time - see commensurate with the risk of repayment and relative value (versus other fixed income investments).

Mostly, I think, it's foreign governments that are buying (returning capital) Treasuries of all maturities. In a sense they are repatriating dollars to their source. No bona fide investors are buying Treasuries at these nosebleed levels - only foreign bureaucrats. I think.

The case against Treasuries is mainly one of mountainous future supply.

I got a little TBT today but it's running away now. I hate to pay up but will because I see this as the next SKF.

Anonymous said...

strap on a set and go long the Yen! Remeber that falling knife comment about gold? When I suggested going long, dec '08 ATM was 826 - a nifty little profit.

Market pronostication: Dow 8600.

Anonymous said...

Let it be known that I made this "Market Progostication" BEFORE looking at the market. The prediction was solely based upon a strong resistance level at 8600. Seriously.

Taylor Conant said...

When you say the "next" SKF you mean SKF has had its run and it won't any longer?

You don't think this flight to safety will continue? Where are you getting these ideas and your understanding of who is doing what? I am trying to figure out where I should be reading to understand things better.

If market deadcatbounce-rallies, that should be bearish for Treasuries and bullish for TBT is that correct? So in other words, if I am sitting out with my SKF now waiting for the rally to get back in, should I ride TBT along the way?

What is your exposure to the UltraShorts of the broader market?

CaptiousNut said...

Shoot, should have answered this one in a timelier fashion.

Jim Rogers said, as far as research goes, "read everything you can get your hands on." I don't abide by that on a daily basis, but over the years have digested quite a bit.

I hate to generalize, but yes, TBT rose, Treasuries dropped on this 1,000 point rally. TBT will also rise from the increased Treasury supply needed to *print money*. TBT is a long term, hold. Buy it with money you don't need and forget about it.

I got back in SKF at 109 and out at 124 this week already.

This *giveaway* to the big banks is actually really good for them. I am still contemplating what it will mean. Valuations on WFC and JPM (the biggest SKF component) are very, very high. But valuation is usually not enough by itself to place a bet.

I have almost nothing in my account these days - including ultrashorts ETFs. In fact I covered a little of my HBC short today too.