10 year treasury yield

[capeman]

I would have to disagree with that. The Fed is heavily obligated to control not the price but the stability of the dollar. Right now the DX is at 80.08 and falling. There is a serious breaking point at 80.00 and the dollar would likely spiral out of control if it breaks 80 causing a whole host of problems including hyperinflation, real interest rate increase on a large scale and a depression the likes of which has never been seen. Controlling stability of the currency is likely the Fed’s top priority unless they want to see equity’s tank and revolution to occur.

[The-Shoveler]

capeman

I think the DX hit 72.xx this morning (new Low to the euro) but maybe I am reading it wrong (no finance expert here).

But it’s good to be Australian these days …

[The-Shoveler]

capeman

I think the DX hit 72.xx this morning (new Low to the euro) but maybe I am reading it wrong (no finance expert here).

But it’s good to be Australian these days …

[cyphire]

I am very freaked out about interest rates, thought they would go much higher, but now am convinced that they will stay stable or possibly go lower (but not by much).

That said my broker, with my permission, took 40% of my money and bought tax free municipal bonds. He wants to lock in revenue for me – seems to make sense. Since selling my company, I have had all the money in cash and some treasuries at Merrill Lynch. I expect some more cash over the next year or two which will make my bonds 1/3rd of the portfolio.

Does anyone see any dangers with the economy on this strategy? I wish I had put my money where my mouth was on the housing bad news, I have very little experience investing even though I understand finance to a reasonable extent.

[cyphire]

I am very freaked out about interest rates, thought they would go much higher, but now am convinced that they will stay stable or possibly go lower (but not by much).

That said my broker, with my permission, took 40% of my money and bought tax free municipal bonds. He wants to lock in revenue for me – seems to make sense. Since selling my company, I have had all the money in cash and some treasuries at Merrill Lynch. I expect some more cash over the next year or two which will make my bonds 1/3rd of the portfolio.

Does anyone see any dangers with the economy on this strategy? I wish I had put my money where my mouth was on the housing bad news, I have very little experience investing even though I understand finance to a reasonable extent.

[Chris Scoreboard Johnston]

Nor – La

It might be that the upward stock trend will hold. My big picture system is nowhere near a sell signal yet as I thought it would be by August 1st. The commercials are very heavily long at this point, which is very bullish. Also, the bond market rally if it continues, is supportive of stock prices. Maybe the PPT will hold stocks up for awhile until the RE mess calms down a bit.

Also, although an intangible, there seems to be alot of negative news out there, which is typically not what surfaces at market tops.

Boeing, which is one of my core stocks I bought in April, just made new all time highs today, so things are still ok for alot of the big caps. I like the boring steady companies, not the high fliers.

[Chris Scoreboard Johnston]

Nor – La

It might be that the upward stock trend will hold. My big picture system is nowhere near a sell signal yet as I thought it would be by August 1st. The commercials are very heavily long at this point, which is very bullish. Also, the bond market rally if it continues, is supportive of stock prices. Maybe the PPT will hold stocks up for awhile until the RE mess calms down a bit.

Also, although an intangible, there seems to be alot of negative news out there, which is typically not what surfaces at market tops.

Boeing, which is one of my core stocks I bought in April, just made new all time highs today, so things are still ok for alot of the big caps. I like the boring steady companies, not the high fliers.

[SD Realtor]

Cyphire – It sounds to me like you have done well with your money. I have been working in a similar manner with the whopping majority of my money in money/markets, and CDs and a small percentage in some stocks. I have lots of wishes while reading about all the people making money on shorts and such. One thing that always makes me feel better is when old Ray Lucia says that one of the objectives of making money is not losing the money you have. Anyways the bond rally could be a harbinger of thoughts that yes a recession will be coming thus locking in rates now is not a bad idea. I don’t really know as I am nowhere near being an expert. If your broker has done well for you in the past I doubt there is a reason to question his judgement now.

SD Realtor

[SD Realtor]

Cyphire – It sounds to me like you have done well with your money. I have been working in a similar manner with the whopping majority of my money in money/markets, and CDs and a small percentage in some stocks. I have lots of wishes while reading about all the people making money on shorts and such. One thing that always makes me feel better is when old Ray Lucia says that one of the objectives of making money is not losing the money you have. Anyways the bond rally could be a harbinger of thoughts that yes a recession will be coming thus locking in rates now is not a bad idea. I don’t really know as I am nowhere near being an expert. If your broker has done well for you in the past I doubt there is a reason to question his judgement now.

SD Realtor

[patientrenter]

Cyphire, I too am looking to ensure a source of future revenue.

During the last 1 1/2 years, I’ve used money market and short bond funds (mostly munis) to build a diversified portfolio of about 40 foreign and domestic dividend-paying stocks across a variety of industries. My average dividend yield is about 4%. I don’t know if the dividend income will tank with a recession, or lag inflation over the long haul, but I felt it was more likely to keep up with inflation or incomes over the very long haul than investing in munis.

I don’t see a lot of good buys right now. Since January, I’ve been planning to use JPY/USD futures to buy yen. It seems the yen is a good long-term store of value, so I’m prepared to spend some carry cost money to diversify into it. If the dollar tanks because of inflation, I’ll be hedged by my yen holdings. If the dollar holds up, then my stocks are probably doing well to offset the yen carry costs.

If I were in your shoes, I wouldn’t be excited about buying a lot of stocks or other assets at today’s very high prices. But I’d buy a few. And I’d buy a bunch of undervalued currencies (measured by PPP and a few other measures) until I saw a better buying opportunity elsewhere in the future.

Patient renter in OC

[patientrenter]

Cyphire, I too am looking to ensure a source of future revenue.

During the last 1 1/2 years, I’ve used money market and short bond funds (mostly munis) to build a diversified portfolio of about 40 foreign and domestic dividend-paying stocks across a variety of industries. My average dividend yield is about 4%. I don’t know if the dividend income will tank with a recession, or lag inflation over the long haul, but I felt it was more likely to keep up with inflation or incomes over the very long haul than investing in munis.

I don’t see a lot of good buys right now. Since January, I’ve been planning to use JPY/USD futures to buy yen. It seems the yen is a good long-term store of value, so I’m prepared to spend some carry cost money to diversify into it. If the dollar tanks because of inflation, I’ll be hedged by my yen holdings. If the dollar holds up, then my stocks are probably doing well to offset the yen carry costs.

If I were in your shoes, I wouldn’t be excited about buying a lot of stocks or other assets at today’s very high prices. But I’d buy a few. And I’d buy a bunch of undervalued currencies (measured by PPP and a few other measures) until I saw a better buying opportunity elsewhere in the future.

Patient renter in OC

[Arraya]

Getting close to the 4.6 SD R. We are at 4.8 today!

[Arraya]

Getting close to the 4.6 SD R. We are at 4.8 today!

[patientrenter]

SDR, Here’s a relevant recent post on Calculated Risk:

“US Treasury yields declined last week in a “flight to quality” but this is not a new bull market for bonds. Credit spreads (junk bonds) are getting crushed as spreads widen. Investors are trying to unload junk bonds bought over the past few years as credit spreads tightened. Hedge funds long junk bonds and short US Treasuries are forced to cover, which exaggerates the situation. This includes structures that may include those “subprime” mortgage backed securities. The best way to illustrate is to consider 10-Year Swaps and 10-Year Fannie Mae debentures. The 10-Year Swap Spread ended last week at 75.8 basis points wider than the 10-Year, 28 basis points wider year to date. The FNMA 10-Year ended last week at 65.4 basis points wider than the 10-Year, 36.3 basis points wider on the year. Given these comparisons the lower 10-Year yield is not resulting in lower mortgage rates.
DH | 07.28.07 – 10:52 pm | #

Patient renter in OC

[patientrenter]

SDR, Here’s a relevant recent post on Calculated Risk:

“US Treasury yields declined last week in a “flight to quality” but this is not a new bull market for bonds. Credit spreads (junk bonds) are getting crushed as spreads widen. Investors are trying to unload junk bonds bought over the past few years as credit spreads tightened. Hedge funds long junk bonds and short US Treasuries are forced to cover, which exaggerates the situation. This includes structures that may include those “subprime” mortgage backed securities. The best way to illustrate is to consider 10-Year Swaps and 10-Year Fannie Mae debentures. The 10-Year Swap Spread ended last week at 75.8 basis points wider than the 10-Year, 28 basis points wider year to date. The FNMA 10-Year ended last week at 65.4 basis points wider than the 10-Year, 36.3 basis points wider on the year. Given these comparisons the lower 10-Year yield is not resulting in lower mortgage rates.
DH | 07.28.07 – 10:52 pm | #

Patient renter in OC

[Author]

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