5 replies to this topic

[cycletimer]

Gary,
You were right in analyzing the fund RYIHX (fund that shorts High Yield bonds) is a piece of crap! It is! I try to compare it to the ETF HYG, but I can't! It doesn't track anything.... I am dumping this position and instead will short long bonds with an Inverse long bond fund... By the way, Bill Gross at PIMCO is growing cautious and raising cash/reducing treasuries... he is forecastign higher ST interest rates in 2010.

[Islander]

Bonds are a mess right now. Hi yields are being rejected and repriced at best, but the broad bond market is key to the recovery, and it looks sick. The fear is that the bid to cover ratio at the treasury auctions will slip further and lead to a failed auction in Q1 '10. This means that the bond risk is so undefined in Treasuries that yield can not capture the risk (nonpayment is unmanageable). Indirect buyers in particular (foreign central banks) are waiting, watching and maybe will lay out for a while. That will drive yields up grossly and maybe do the deed of forcing yields into the 5% range. This yield range will kill housing sales, smack the equities hard, and terrify the bond holders into mass selling. The formula for hell week is laid out, watch for it to unfold. Oh yes, look at TBT for a quick inverse etf fix for bond fever. Best, Islander

Edited by Islander, 18 December 2009 - 10:14 PM.

[Gary Smith]

Bonds are a mess right now. Hi yields are being rejected and repriced at best, but the broad bond market is key to the recovery, and it looks sick.

The fear is that the bid to cover ratio at the treasury auctions will slip further and lead to a failed auction in Q1 '10.

This means that the bond risk is so undefined in Treasuries that yield can not capture the risk (nonpayment is unmanageable).

Indirect buyers in particular (foreign central banks) are waiting, watching and maybe will lay out for a while. That will drive yields up grossly and maybe do the deed of forcing yields into the 5% range.

This yield range will kill housing sales, smack the equities hard, and terrify the bond holders into mass selling.

The formula for hell week is laid out, watch for it to unfold. Oh yes, look at TBT for a quick inverse etf fix for bond fever.

Best, Islander

This has been the most vibrant junk bond market of anyone's lifetime. Investor demand for junk bonds has been ravenous in 2009 and a record amount of junk bonds have been sold. Just in the past two weeks we saw the greatest two week period for junk bond sales of the year. Today, Clear Channel's offering of 750 million was met with such huge demand that it was raised to 2.5 billion. 2009 has been a once in a lifetime opportunity for junk bond investors/traders as the Merrill Lynch High Yield Master II Index has risen over 56% (surpassing 1991's 39.2%) and has been setting not just yearly highs but historical highs for the past 15 consecutive trading sessions. Spreads have come in from over 21% in December 2008 to 7% today.

As for 2010, who knows, some of us are just just naive trend followers and certainly junk bonds are ripe for some sort of shakeout for those who have been aboard for some of the easiest money making opportunities of a lifetime. But the shakeout calls have been around for months now as the market trends higher and higher with nary a reaction along the way. The Merrill Index and the open end junk funds haven't even seen a 3% correction since early March. With record inflows into bond funds of all sorts in 2009 and outflows from domestic equity funds ( in spite of a nearly 60% run in stocks since March) some are expecting those flows to reverse in 2010 much to the benefit of domestic equities.

[arbman]

Bonds are a mess right now. Hi yields are being rejected and repriced at best, but the broad bond market is key to the recovery, and it looks sick.

The fear is that the bid to cover ratio at the treasury auctions will slip further and lead to a failed auction in Q1 '10.

This means that the bond risk is so undefined in Treasuries that yield can not capture the risk (nonpayment is unmanageable).

Indirect buyers in particular (foreign central banks) are waiting, watching and maybe will lay out for a while. That will drive yields up grossly and maybe do the deed of forcing yields into the 5% range.

This yield range will kill housing sales, smack the equities hard, and terrify the bond holders into mass selling.

The formula for hell week is laid out, watch for it to unfold. Oh yes, look at TBT for a quick inverse etf fix for bond fever.

Best, Islander

Don't worry, we will have the sharpest correction of one's lifetime after the easiest money making opportunity of a lifetime.

The rates will not go higher, the equities will snap down really hard and fast, I think the junks will be punished with them, imho. The junks do well as long as the govt promotes the risk taking since I think it is the govt propping them up mostly, I think Fed is done here. I think the only reason a large correction didn't happen yet in December is because they want to close the year at 50% bear market recovery.

Otherwise, I am appalled by the amount of distribution that went on since September and people are still thinking we will accelerate higher, it will be a first probably. I am anxiously waiting for January to see whether all these concerns will be proven justified...

[cycletimer]

Bonds are a mess right now. Hi yields are being rejected and repriced at best, but the broad bond market is key to the recovery, and it looks sick.

The fear is that the bid to cover ratio at the treasury auctions will slip further and lead to a failed auction in Q1 '10.

This means that the bond risk is so undefined in Treasuries that yield can not capture the risk (nonpayment is unmanageable).

Indirect buyers in particular (foreign central banks) are waiting, watching and maybe will lay out for a while. That will drive yields up grossly and maybe do the deed of forcing yields into the 5% range.

This yield range will kill housing sales, smack the equities hard, and terrify the bond holders into mass selling.

The formula for hell week is laid out, watch for it to unfold. Oh yes, look at TBT for a quick inverse etf fix for bond fever.

Best, Islander

This has been the most vibrant junk bond market of anyone's lifetime. Investor demand for junk bonds has been ravenous in 2009 and a record amount of junk bonds have been sold. Just in the past two weeks we saw the greatest two week period for junk bond sales of the year. Today, Clear Channel's offering of 750 million was met with such huge demand that it was raised to 2.5 billion. 2009 has been a once in a lifetime opportunity for junk bond investors/traders as the Merrill Lynch High Yield Master II Index has risen over 56% (surpassing 1991's 39.2%) and has been setting not just yearly highs but historical highs for the past 15 consecutive trading sessions. Spreads have come in from over 21% in December 2008 to 7% today.

As for 2010, who knows, some of us are just just naive trend followers and certainly junk bonds are ripe for some sort of shakeout for those who have been aboard for some of the easiest money making opportunities of a lifetime. But the shakeout calls have been around for months now as the market trends higher and higher with nary a reaction along the way. The Merrill Index and the open end junk funds haven't even seen a 3% correction since early March. With record inflows into bond funds of all sorts in 2009 and outflows from domestic equity funds ( in spite of a nearly 60% run in stocks since March) some are expecting those flows to reverse in 2010 much to the benefit of domestic equities.

Greetings Gary!
What is the Index I can follow intra-day that tracks junk bonds? What is the ticker symbol? Currently I am simply tracking HYG.
Thanks,
Kirk

[vitaminm]

http://finance.yahoo.....k,prhyx vwehx


dog!
http://finance.yahoo.....2Cprhyx,ryihx