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You've added another wrinkle - my
thinking was purely North American. Hadn't thought about Japan. I wasn't
implying that people are living longer and need the security of fixed returns
for the long haul. I was in fact suggesting the opposite. Because of
different views towards retirement, it's possible that people will not seek to
clip coupons as their sole means of income. Notwithstanding, the current
supply issue, gov'ts will provide supply where the demand is best. They
get a better price when they feed demand. Of course, they'd better get a
move on given what the current explosion in money supply and the likely fiscal
expansion will do to inflation and expected inflation. Once the long end
starts to shift it's focus from supply to inflation, I wouldn't want to be long
the long end of the yield curve.
117? Is that where you're a
seller?
Regards,
Mike
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000080 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=bruce.larson@xxxxxxxxxxxxx
href="mailto:bruce.larson@xxxxxxxxxxxxx";>bruce.larson@xxxxxxxxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Wednesday, October 31, 2001 1:16
PM
Subject: [RT] Re: 30 year treasury
issuance suspended
<FONT face=Arial
color=#000080 size=2><FONT
face=Arial color=#000080 size=2><FONT face=Arial color=#000080
size=2><FONT face=Arial
color=#000080 size=2><FONT
face=Arial color=#000080 size=2><FONT face=Arial color=#000080
size=2>I've given it plenty of thought. Japanese
boomers are about 10 years older than us interms of demographics.
Nikkei topped out end of 1989 and now Japanese 10 year gov't bond yields
are 1.3%. UK has a natural shortage of 30 year bonds because of
actuarial requirements of the life insurance companies. UK gilt 30
years yield 20-30bp less than 10 years. That's why I've been long
bonds since the announced buyback early last year. The markets are
always looking for a theme to jump on. Right now, that theme is a
shortage of bonds and an aging population looking for fixed returns for
the long haul because just as you implied, people are living longer and
need that security.Bonds just touched 111. Only 6 more points to get
to 117.--- In realtraders@xxxx, "Mike Higgs"
<moongateca@xxxx> wrote:> Bruce,> > Examine your
views of boomers and retirement. Retirement no longer has the "gold
watch at 65" definition. Think about it and it's impact on sell
equities/buy bonds.> > Regards,> Mike>
----- Original Message ----- > From: bruce.larson@xxxx
> To: realtraders@xxxx > Sent:
Wednesday, October 31, 2001 10:18 AM> Subject: [RT] Re: 30
year treasury issuance suspended> > > As I
said before, investors will be forced to scramble for 30 years.
> All the equity funny money will seek fixed returns as
boomers > approach retirement. After the recent stock
market fall-out, this > should have been an obvious
outcome. You're not going to risk your >
retirement on deteriorating corporate credit. And the
short-> intermediate treasuries only yield 2.5-3.5%.
Better hurry to lock in > that 5% yield! >
> > > > --- In realtraders@xxxx,
bruce.larson@xxxx wrote:> > The squeeze is on - 117 here
we come.> >
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