Thursday, September 9, 2010

Bonds.... Yet Again.

Don't know if you caught the story down in North Carolina about the Sheriffs Want Lists of Patients Using Painkillers. Note it's sheriffs plural not singular. It seems law enforcement want access to state computer records identifying anyone with prescriptions for powerful painkillers.

"Sheriffs made their pitch Tuesday to a legislative health care committee looking for ways to confront prescription drug abuse. Local sheriffs said that more people in their counties die of accidental overdoses than from homicides."

Maybe these prescription drug heads are a problem on the road just like drunk drivers and stoned drivers. Now I am no magistrate so I will defer to Judge Napolitano but what I want to know is who is the bigger threat on the road, Tina the soccer mom pumped full of prozac with a glass of wine in her or driving behind her neighbour George the salesman tricked up on oxycontin for that neck injury or Party Patty who just pulled over at the mall to have a hoot on her bowl? Tis a thought. One thing I do know I am not paying for Party Patty's joydom via my health care premiums like Tina and George but yet again I digress.


Everyone loves to hate the bonds, I am talking U.S. Treasuries here, yet they continue to go up. I urge you to ignore the crowd on this issue, yes the same crowd who was predicting the same dire catastrophe for the Japanese bond market.

As for bonds in a bubble, I agree with Jim Chanos and that the hallmark indicator of a bubble is leverage or borrowed money.

So based on this I ask....

Have you bought bonds (individual U.S. treasury securities or T-bond funds) on margin?
Has you brother-in-law?
Has you neighbour?
Has anyone you know?

I remember back in the nirvanic bull market days (of tech) of 1999-2000 when genious' were in abundance and then again during the bull market days (of housing of 2007 when the pundits would reply to the the bears with this gem;

"if IBM or GE or Ford (take any Fortune 500 name) goes to (pick the outrageously low number), then you're gonna need a shotgun, ammo and water more than money.

Well I am here to inform you that if the bond market bears are correct and U.S. Treasury market is in a bubble and does implode heaven help us for
YOU WILL NEED THAT SHOTGUN, AMMO AND WATER more than your investments for damn sure!

I still believe all debt is either paid back on defauted upon. We had the mother of all bubbles in debt and credit creation. This is not being paid back. The boat is sinking faster (deflation) than those in charge can pump the water out via money and credit creation (inflation).

I suggest you pray that the U.S. Treasury market holds together or you will need to prepare for Weimar Germany, Argentina, or Zimbabwe or any other example of chaos throughout history. Remember this is just one idiot blogger's simpletonian opinion on the subject.

Housekeeping notes;

I was stopped out of my AAPL short today at $266.51 for a gain of just over 8 pts, gotta love a market that's 'run and gun'. Like the Lakers of old, for you youngsters out there that's Kareem, Magic, Nixon, Worthy, Cooper, Rambis got it now.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $60.30
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $60.50
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $42.45
Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
Long 2 units Direxion Tech 3X Bear ticker TYP @ $52.60
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $22.52
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $92.15
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 93.48 stop @ $93.48

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