Let’s talk 10 yr treasuries

[Eugene]

In my view, markets are not moved by professional bond traders using sophisticated models but by regular people like you and me. People go with investments they expect to be most profitable. I don’t make my investment decisions based on what the government CPI tells me and neither do you. It’s as simple as: will I get better return from a 10-year dollar denominated US treasury bond at 3.78%, or a 10-year euro-denominated Italian treasury bond at 4.5%? or should I put my money into the stock market?

If I think that stock market has hit the bottom, I’ll sell my bonds, dollar yields and euro yields go up.

If I think that dollar will depreciate against euro because US government decides to print its way out of the problem unilaterally, I’ll sell US bonds and buy euro bonds, US bond yields go up, euro bond yields go down.

Since neither seems to be happening, most people probably think that stock market is still going down and that dollar:euro exchange rate won’t move far beyond 1.50. (Or maybe that it might but 0.7% yield difference does not reward them enough for the risk that it doesn’t. USD is still the world’s reserve currency so it benefits whenever theer’s risk involved. )

[SD Realtor]

Both answers are well thought out and I cannot argue either of them well not just because I am tired but because I don’t have a good argument either way and I am not as well versed in the movement of the ten year. I get brainfreeze when I try to figure out which way it will go. Thanks for providing input guys.

SD Realtor

[SD Realtor]

Both answers are well thought out and I cannot argue either of them well not just because I am tired but because I don’t have a good argument either way and I am not as well versed in the movement of the ten year. I get brainfreeze when I try to figure out which way it will go. Thanks for providing input guys.

SD Realtor

[SD Realtor]

Both answers are well thought out and I cannot argue either of them well not just because I am tired but because I don’t have a good argument either way and I am not as well versed in the movement of the ten year. I get brainfreeze when I try to figure out which way it will go. Thanks for providing input guys.

SD Realtor

[SD Realtor]

Both answers are well thought out and I cannot argue either of them well not just because I am tired but because I don’t have a good argument either way and I am not as well versed in the movement of the ten year. I get brainfreeze when I try to figure out which way it will go. Thanks for providing input guys.

SD Realtor

[SD Realtor]

Both answers are well thought out and I cannot argue either of them well not just because I am tired but because I don’t have a good argument either way and I am not as well versed in the movement of the ten year. I get brainfreeze when I try to figure out which way it will go. Thanks for providing input guys.

SD Realtor

[Eugene]

“Don’t get me wrong, Your point may be correct. Just to be sure though, you are saying that you believe the 10 year will hit levels that it basically has never hit before. Which would be awesome for housing. A 10 year at 1.5% puts a fixed rate conforming loan at 3%… Not bad at all. At the same time our debt will continue to be financed by foreign entities who will buy these instruments at that low of a yield.”

I’m saying this:

I believe that the 10 year may stay at these levels or possibly go lower for a while. At the same time USD may start appreciating and it will make US treasuries even more attractive for private investors both here and abroad.

Sooner or later stock market will turn around, I can’t predict what happens next.

Also 10 year at 1.5% won’t be any good for housing if there are some drastic changes in mortgage markets e.g. Fannie Mae goes bankrupt, but if that happens, housing will be the least of our problems.

[Eugene]

“Don’t get me wrong, Your point may be correct. Just to be sure though, you are saying that you believe the 10 year will hit levels that it basically has never hit before. Which would be awesome for housing. A 10 year at 1.5% puts a fixed rate conforming loan at 3%… Not bad at all. At the same time our debt will continue to be financed by foreign entities who will buy these instruments at that low of a yield.”

I’m saying this:

I believe that the 10 year may stay at these levels or possibly go lower for a while. At the same time USD may start appreciating and it will make US treasuries even more attractive for private investors both here and abroad.

Sooner or later stock market will turn around, I can’t predict what happens next.

Also 10 year at 1.5% won’t be any good for housing if there are some drastic changes in mortgage markets e.g. Fannie Mae goes bankrupt, but if that happens, housing will be the least of our problems.

[Eugene]

“Don’t get me wrong, Your point may be correct. Just to be sure though, you are saying that you believe the 10 year will hit levels that it basically has never hit before. Which would be awesome for housing. A 10 year at 1.5% puts a fixed rate conforming loan at 3%… Not bad at all. At the same time our debt will continue to be financed by foreign entities who will buy these instruments at that low of a yield.”

I’m saying this:

I believe that the 10 year may stay at these levels or possibly go lower for a while. At the same time USD may start appreciating and it will make US treasuries even more attractive for private investors both here and abroad.

Sooner or later stock market will turn around, I can’t predict what happens next.

Also 10 year at 1.5% won’t be any good for housing if there are some drastic changes in mortgage markets e.g. Fannie Mae goes bankrupt, but if that happens, housing will be the least of our problems.

[Eugene]

“Don’t get me wrong, Your point may be correct. Just to be sure though, you are saying that you believe the 10 year will hit levels that it basically has never hit before. Which would be awesome for housing. A 10 year at 1.5% puts a fixed rate conforming loan at 3%… Not bad at all. At the same time our debt will continue to be financed by foreign entities who will buy these instruments at that low of a yield.”

I’m saying this:

I believe that the 10 year may stay at these levels or possibly go lower for a while. At the same time USD may start appreciating and it will make US treasuries even more attractive for private investors both here and abroad.

Sooner or later stock market will turn around, I can’t predict what happens next.

Also 10 year at 1.5% won’t be any good for housing if there are some drastic changes in mortgage markets e.g. Fannie Mae goes bankrupt, but if that happens, housing will be the least of our problems.

[Eugene]

“Don’t get me wrong, Your point may be correct. Just to be sure though, you are saying that you believe the 10 year will hit levels that it basically has never hit before. Which would be awesome for housing. A 10 year at 1.5% puts a fixed rate conforming loan at 3%… Not bad at all. At the same time our debt will continue to be financed by foreign entities who will buy these instruments at that low of a yield.”

I’m saying this:

I believe that the 10 year may stay at these levels or possibly go lower for a while. At the same time USD may start appreciating and it will make US treasuries even more attractive for private investors both here and abroad.

Sooner or later stock market will turn around, I can’t predict what happens next.

Also 10 year at 1.5% won’t be any good for housing if there are some drastic changes in mortgage markets e.g. Fannie Mae goes bankrupt, but if that happens, housing will be the least of our problems.

[gdcox]

Graham

The ten year is too low. There has been a flight to safety worldwide that has pushed yields down abnormally .

[gdcox]

Graham

The ten year is too low. There has been a flight to safety worldwide that has pushed yields down abnormally .

[gdcox]

Graham

The ten year is too low. There has been a flight to safety worldwide that has pushed yields down abnormally .

[gdcox]

Graham

The ten year is too low. There has been a flight to safety worldwide that has pushed yields down abnormally .

[Author]

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