boz

Got Bonds

267 posts in this topic

Ok, I make a forecast for oil as well:

how about at 20 times with gold and in the range of 45 to 65 with the euro by june?

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You want to see Australian inflation? Oil at $120bbl should be peachy.

This is where it gets tricky. The massive risk is debt deflation.

Our model of inflation/deflation is based the simple one, on what happened to the prices everytime Caesar made it back to Rome with another looted treasury.

Rising oil prices trigger massive debt deflation that can over ride ordinary inflation that arises from printing simple currency.

Oil is such an important input. Oil goes higher and the worlds business activity begins to close because it over rides profit.

Business cannot put their prices when nobody can afford the goods anymore. People don't pay higher prices......instead trade creases.

Enough of it and the next stop is the stone age.

Oil is a cash crop!

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This is where it gets tricky. The massive risk is debt deflation.

Our model of inflation/deflation is based the simple one, on what happened to the prices everytime Caesar made it back to Rome with another looted treasury.

Rising oil prices trigger massive debt deflation that can over ride ordinary inflation that arises from printing simple currency.

Oil is such an important input. Oil goes higher and the worlds business activity begins to close because it over rides profit.

Business cannot put their prices when nobody can afford the goods anymore. People don't pay higher prices......instead trade creases.

Enough of it and the next stop is the stone age.

Oil is a cash crop!

It is tricky stuff, for sure you can't have gold going up and oil not. Actually at 13 times with gold ail is not that expensive. The key of inflation is that oil has to move up in line with assets revaluation (sharemarket and homes) and with cpi and wages, probably a 10% rise in oil will bring only a 1% rise in cpi and wages and on businesses/family costs.

Anyhow, bond yield is also a cash crop and today is another bond yield rising day with Japan 10 year term over 1.4% and australia over 5.8% with USA at 4.

I think after commodity, sharemarket and bond yield rises the ball will swing back to the 2008 scenario with commodity, sharemarket and bond in deflation mode again.

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OK Cobran, oil has cracked 85.........what do the charts say?

It's rising! sleep.gif

After $87, the next target is around $100.

post-148-12705435376642_thumb.jpg

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It's rising! sleep.gif

After $87, the next target is around $100.

And oil moving up from $90 to $145 in the first part of 2008 tipped world finance out the apple cart.

The last time oil was at its long term cheap price of $20 was in 2003. In todays money that is about $27. The "economic growth" of the late 80's and 90's was built on very cheap oil. Todays price is 3x that in real terms. Cheap oil is finished. The market will simply adapt itself to more expensive or less per capita energy and mass production.

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The aUS 10 year bond is testing last week support (yield around 5.9%)...

post-268-12710353224086_thumb.png

about to brake through to jump over 6%?

the 3 year bond is also at last week suppport around 94.5

Us 10 year bond is closing to 4% again and Japan is steady at around 1.4%

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Greece sells 1.2 bln eur of T-bills, 52-week yield 4.85%

Tue Apr 13, 2010 5:19am EDT ATHENS, April 13 (Reuters) - Greece's Public Debt Management Agency (PDMA) sold 1.2 billion euros ($1.63 billion) of 52- and 26-week T-bills on Tuesday, in its first debt sale since details of the European/IMF safety net were announced at the weekend.

Stocks | Currencies | Bonds | Global Markets

The auction was covered but Greece had to pay a high yield.

PDMA said the auction produced a yield of 4.85 percent for 52-week T-bills, up from 2.20 percent in a previous Jan 12 auction. The bid-cover ratio was 6.5 versus 3.05 in the previous auction.

The yield for 26-week paper came to 4.55 percent, up from 1.38 percent in the Jan auction. (Reporting by George Georgiopoulos)

My link

well, while things are not getting much better for greece bonds in other country bond is bouncing back from resistance and yield on 10 year term is down to below 5.8% for australia, at 1.38% for Japan.

This is when the oils is back below 84$

was last week a false breakout for oil? i thought the US$ was the one to give up but may be is commodity the one coming down first?

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with the drop in commodity and share market investor bought long term bond again driving down the yield significantly, specially for japan and Germany. Australia 10 year gov bond is back below 5.8%

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Interesting correlation between banks share prices and bond yield link

click on the link for the chart

Corporate Bonds Foreshadow U.S. Bank-Stock Gains: Chart of Day

Share Business ExchangeTwitterFacebook| Email | Print | A A A By David Wilson

April 19 (Bloomberg) -- U.S. bank stocks are poised for gains because they have only begun to catch up with a surge in corporate bonds, according to Ian Scott, a global strategist at Nomura International Plc.

The CHART OF THE DAY compares the industry’s stock performance relative to the Standard & Poor’s 500 Index with a Moody’s Investors Service index of yields on Baa-rated corporate debt, the lowest investment-grade category. The latter is shown in reverse because falling yields translate into rising prices.

“Bank stocks have hardly responded” to the rally in bonds, Scott wrote in an April 16 report, even though the S&P 500 Banks Index has more than tripled since March 2009. This is the industry gauge used in the chart, which is similar to one published in his report.

The group fared much better in the early 1990s, when the stocks kept pace with corporate bonds as banks rebounded from real-estate losses, in his view.

Rebounds in mortgage-backed securities and leveraged loans, made to debt-laden companies, also signal that the rally in U.S. banks’ share prices “has further to run,” the report said.

“U.S. credit measures have improved across the board,” Scott wrote. “None of these improvements has yet to be reflected in either the absolute or relative performance of bank stocks.” He recommends that investors have more money in global banks than their weighting in benchmark indexes would suggest.

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

Last Updated: April 19, 2010 11:37 EDT

While to me seems banks and bonds are out of whack it could return to the mean by a rising in bond yield.

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Strange day for bonds where stock market is up to the moon bond is up too! (yield down), even gold is down (while oil and other commodity up).

This resiliance of bond yield from braking on the upside is remarkable.

Got to go and find some reason for it...

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here is some data:

post-268-1272577563857_thumb.gif

In europe Pigs yield down and other better rated countries up. but as i said worldwide yield is down to a quite a low point for the last few months (for example japan at 1.29% and US at 3.7%)

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Up to yesterday, our 90 day bank bill yields rose sharply over the two days after the RBA's rate rise. It will be interesting to see how much of a drop they would have suffered today. Our 10 year bond yields are however going against the grain (temporarily I hope!).

post-148-12732264789482_thumb.jpg

post-148-12732264860045_thumb.jpg

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massive "normalisation" on the eu bond market with yield winding back at least 3 weeks (german up over 0.2% yield and Italian and Spanish down to below 4%)

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edit duplicate post

Edited by boz

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massive "normalisation" on the eu bond market with yield winding back at least 3 weeks (german up over 0.2% yield and Italian and Spanish down to below 4%)

so Greek junk bonds last week would have been terrific buying! Take nerves of steel though.

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so Greek junk bonds last week would have been terrific buying! Take nerves of steel though.

well, greek bonds is speculative buy as they are junk status, yesterday lots of specualtors lost money.

Last week I would have trade a pair like the Italian gov bond against the French (or Belgium), the spread was just out of whack when you compare the fundamental, spread was over 1% and even now at 0.75% in france favour is too much.

Some numbers FRance in relation to Italy:

FRance population is 3% higher, gdp is 20% higher, trade deficit is higher, public debt 15% lower (mesured in euro and not in relation to gdp), Household debt is 20% of GDP higher (probably 25% or more measured in euro), budget deficit is 2% of GDP higher (in 2009 france GOV spent 65 bileuro more then Italy and that is on top of the lower rate France is paying on debt interests), another thing is that France has lots of Nuclear power plant enough to supply mostly of energy, Italy has none.

Italy is part of the PIIGS and only AA rated, France is not part of the PIIGS and AAA rated (that is one reason of why rating agencies are a joke)

Edited by boz

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