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How do you say conundrum in chinese??

You ignore the views of the chief world economist – Alan Greenspan at your own peril! Financial markets are addicted to his theories about how things work: be it the end of inflation, the miracle of productivity and  that  the greatest economy in the world will be able to deal with any challenge. Last wednsday, the US Treasury bond market was not amused to find out that "the Maestro" was unable to explain why 10 year government bond yields are as low as they are at the moment. In semi-annual testimony before the US congress he created some new wall street-jargon calling the current state of things the "bond market conundrum". T-bonds promptly sold off in response to his slicing and dicing the question. As in 1996 when he briefly spooked the equity market whith his remarks about "irrational exuberance" his fundamental point is true: bond yields are very, very low. The real question is, whether they are too low for the biggest buyers of US  treasuries: Asian Central Banks. With the US dollar weakening yet again over the last few weeks, they are more likely to keep up the pace of bond buying than not. One way to profit from this is for example through going long the Treasury bond future or to buy a certificate that mimics the behaviour of the bond future contract with a stop loss protection (for example: ISIN NL0000414985 from ABN Amro with a leverage of around 12:  One basis point move in yield is worth around 1.2% in price of the certificate: if yields go back to 4%, that^s a 25% gain!!).

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12 commentaires

  1. Christophe 19 février 2005 à 21:40

    Wow, Jean ! I’m absolutely thrilled ! A 25% gain on bonds thanks to asian banks investing their dough ! Please tell us more !

  2. Fredericka 24 janvier 2019 à 22:12

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  3. Charli 24 janvier 2019 à 22:49

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  4. Geri 26 janvier 2019 à 04:34

    Excellent way of describing, and good piece of writing to take data concerning
    my presentation subject, which i am going to present in university.

  5. Grady 27 janvier 2019 à 05:46

    All types of investments include certain risks.

  6. Marilou 27 janvier 2019 à 18:47

    Now it is time to decide your specific investments.

  7. Gus 5 février 2019 à 17:15

    Wow that was unusual. I just wrote an really long comment but after I clicked submit my comment didn’t show up.
    Grrrr… well I’m not writing all that over again. Regardless, just wanted
    to say superb blog!

  8. Belen 7 février 2019 à 03:03

    Schwab Clever Portfolios invests in Schwab ETFs.

  9. Kellie 9 février 2019 à 04:56

    Traders do pay direct and oblique prices.

  10. Tonja 11 février 2019 à 06:11

    All varieties of investments come with certain dangers.

  11. Andrew 15 février 2019 à 02:14

    Financial advisors business is individuals business.

  12. Raymundo 19 février 2019 à 02:47

    That is true for investment advice as nicely.