I just haven’t seen enough stuff to put out a definitive linkfest. Instead, we will simply have to deal with the forum of the thread.
What happens this week: Do we top? Does the rally ressume? Does Gold refind its mojo? Is BIll Gross right about Bonds?
What say ye?
Do we top? I hope so. Let’s get on with the bear market already.
Is Bill Gross right about bonds? Why? What is the “Bond King” saying?
I don’t care about gold….
would definitely file this one under contrarian opinion would say…
sell. sell. sell.
http://www.iht.com/articles/2006/07/09/news/deficit.php
as for gold, the last paragraph pretty much sums up that long term perspective. dollar will evaporate and gold will see magnamanus horizons. may take a few years, but it’ll see four figures unless healthcare just becomes pro bono.
I took Gross’ advice and bought FGOVX last week to hold throught Sept/Oct, and may get some of the foreign bond closed-end he recommended, BGT.
I think we topped last week, what say you great one, BR? I sold the giant cap etf, XLG, I bought 6-14 after the little bear market rally.
I wish I had gotten some GLD at $58, but couldn’t pull the trigger. I may start dollar cost averaging in now.
I’m not sure what to make of the IHT article referenced above. Do the higher tax receipts mean good news for bonds, at least short term?
I still like UST, JNJ and VZ for the rest of the year.
I have been using the attached chart for my trading of silver and it has been remarkably accurate to date. Like any chart it has its limitations, but it nailed the May swoon. So if you believe the trend, we have one more dip that begins in late July.
There is a seasonal chart for gold as well that is not nearly as volatile, but the trend is similar.
http://www.321gold.com/charts/seasonal_silver.html
Gold is getting sold off its 50 day MA. If it closes above there, we’re probably headed for a test of the highs.
GLD and DJIA are highly correlated at the moment, and thus sensitive to USD moves. Trade balance and BoJ later this week are most likely to be pivotal for the dollar.
Near record trade balance should hurt the dollar. BoJ ending ZIRP could also hurt the dollar substantially.
Is Gross right about bonds bottoming? Depends on what timeframe we’re talking about. Let’s face it, these clowns at the Fed aren’t serious about containing inflation.
If they put interest rates on hold and go take a vacation right now, they are asking for inflation accelerate. Let’s face it, the Chamberlain analogy was correct.
So for a few months bonds may rally. Longer term, these prices are historically expensive and Mr. Gross is most likely wrong about a sustained rally.
A sharp fall in the dollar could trigger a sell-off in treasuries. The dollar is a powderkeg and it might get tripped off by any number of things:
* ECB hiking 50bp.
* BoJ ending ZIRP.
* Iran situation escalating.
Great analysis, sell_the_ten_year
how far gone is Gross’s book at this point? The guy has been talking wrong for 18 months, is he walking wrong? The number of big ticket bets that aren’t working in the asset management world is a wonderment.
“So for a few months bonds may rally. Longer term, these prices are historically expensive and Mr. Gross is most likely wrong about a sustained rally.”
Wouldn’t be the first time. With their recent track record on rate predictions, does anyone even listen to the PIMCO guys anymore? Of course, with all that money under management, they wouldn’t dare talk their books now…would they?
“Following Hurricane Katrina, I think you have to reduce your trajectory for Fed funds relative to what your trajectory was before this tragedy. That may not be terribly helpful because people want to know what the number is, but I think Bill Gross’s comments captured it best when he said we’re near the end of the Fed’s rate hiking cycle. As a group, we think that a stagflationary soft landing implies about 4% or so, plus or minus a little bit, as the stopping point in the Fed’s rate hiking campaign. Post-Katrina, the market had been pricing in 4% as the stopping point as well, but following the September rate hike to 3.75%, the market is back to assuming that the Fed will continue to march the Fed Funds rate upwards. The Fed is searching for the magical neutral rate that will slow the economy without shutting it down, which is why they’ve been moving in 25 basis point increments. We simply think the neutral rate is 4%, and this is where we differ from the market. There are some of us, myself particularly, who would be on the optimistic side of that issue and believe that the Fed could very well be finished before we get to 4%.
Paul McCulley, Oct. “05
“We think we’re very close to the end of tightening. We’ve been saying that for some time and we’ve obviously been premature in saying that. But we think the Fed recognizes that the yield curve is very flat, that the property market is coming off the boil, and that core inflation has actually disinflated over the last six months. And indeed, the Fed stopped describing policy as “accommodative” in its communiqué after the December 13 FOMC meeting, suggesting strongly that the Fed, too, now sees a nearby end to tightening.”
Paul McCulley, Jan ’06
Seems to me this week’s action is driven by the short-sightedness of the herd…..
Banks up this AM, oil down…..I would sell on any strength near previous highs. This AM I’m watching WFC. Emigrant Direct is paying 5.25 on 1 month CD’s….guaranteed return while I wait for the real bottom, at least for my cash component.
Remember Barry’s warning at the beginning of the down-turn….it will test the old highs then….flush.
Gross’s take is interesting … From a technical standpoint, 10-year rates have already had a trading range 5%-4% market from the summer of 2003 until the beginning of this year. So Gross is saying essentially that we had a brief, false breakout to modestly higher rates (5-5.2%), but are now returning to the 2003-2006 range?
Gross’s take is interesting … From a technical standpoint, 10-year rates have already had a trading range 5%-4% market from the summer of 2003 until the beginning of this year. So Gross is saying essentially that we had a brief, false breakout to modestly higher rates (5-5.2%), but are now returning to the 2003-2006 range?
Jump in my car baby: http://tinyurl.com/pkpzy