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Turkey’s Benchmark Bond Hits A 20% High

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Posted by Business Day

on Wednesday, 08 August 2018 11:12

turklira

After the lira, it’s the turn of Turkish government bonds.

The nation’s benchmark 10-year notes slid, sending yields to a record high, as investors increasingly concerned by a lack of central bank moves to backstop the nation’s assets sought higher risk premiums. The lira won a brief respite after slumping the most since an attempted military coup in 2016.... CLICK for complete article



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Bonds & Interest Rates

Spotlight on the Timing of Treasury Shorts

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Posted by Mike Mish Shedlock

on Monday, 30 July 2018 07:13

 

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Screenshot 2018-07-30 07.48.11

Screenshot 2018-07-30 07.50.36

September 5, 2017 with the 10-year yield at 2.04%, was an excellent time to short 10-year treasuries. The number of speculative net short contracts was only 62,634. 

On January 2, the speculative net short position rose to 292,210 contracts with the yield up to 2.45%.

On April 17, at a yield of 2.88%, there were 543,822 net short contracts.

On July 24, with the yield barely rising to 2.97%, there were 698,504 net shorts contracts. That's an increase of 154,682 with the yield essentially moving sideways. 

Larger Picture

The above just describes changes in net positioning. It's highly likely some of those who shorted early on have taken profits while others added to shorts and still others took positions for the first time. 

The number of short contracts is a whopping 1,557,271 contracts. 

The number of long speculative contracts is 858,767 so there may be a pile of hurting longs ready to throw in the towel on a move higher in yields as well. I suppose it would be fitting if one final blast higher in yields shook out the longs right before a reversal.

Congrats to those who shorted early and got out. 

It's the short latecomers and those pressing shorts after this rally in yields that will eventually blow up. Some longs may also be on the edge right now. 

Mike "Mish" Shedlock

 



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Bonds & Interest Rates

Endgame Strategizing

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Posted by John Mauldin - Mauldin Economics

on Monday, 30 July 2018 06:47

  • screevTake a Deep Breath
  • Too Much Protection
  • Behind the Door
  • Cracks in the Wall
  • The Best Strategy for the Great Reset
  • Grand Lake Stream, Maine and Moving On

We are all on a debt-filled train that is eventually going to crash, and if you are on it, it won’t stop to let you off first. Jumping at the last minute is not a good option, either. So what do you do? You take action now, while you have time.

Last week I gave you some rules to follow with your investments. They were necessarily general because I’m writing to a broad audience. Today, I will get more specific by discussing some possible strategies for high-net-worth “accredited investors.”

However, you should read this important information even if you aren’t wealthy. You might get there someday and it will help prepare you for it. “Someday” could be sooner than you think, too. The Great Reset will rearrange much of the world’s wealth and some people will see their financial condition change quickly, either for worse or better. There will be some enormously positive opportunities.

And as we will see, many strategies that are currently available only to accredited investors are slowly showing up in lower-cost, publicly accessible ETFs and other instruments around the world. There is truly a fintech-driven revolution going on in the financial industry. For we who make our living in that world, the changes seem to intensify almost daily. As I will discuss at the end of this letter, these changes are forcing me to update my own business model. So opportunities not available to you today may very well be available next quarter or next year. You and your advisors need to stay in the loop.

The broader point: Whatever our current circumstances, we can all do things to prepare for the radically different world I think will unfold in these years. You need to make the most of what you have. I want to help by meeting you where you are. Fortunately, I have multiple ways to do that, as you’ll see below. Stick with me and we’ll get through this together.

Take a Deep Breath: It’s Going to Get Better



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Bonds & Interest Rates

Interest Rates Lock & Load or Stay Nimble?

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 24 July 2018 08:17

Interest-Rates-Symbol

QUESTION:  Hi Marty,
I continue to read your blog and if I understand correctly, interest rates are going up.
My question is, can one profit from higher interest rates such as buying CD or bank stocks like Wells Fargo?

ANSWER: The one thing you do not want to do is buy a CD with maturity. As rates go higher, you will be locked in and unable to take advantage of the rising rates. Bank stocks will not benefit from higher rates in general. So that is not a valid reason to buy bank stocks. The safest thing would be to buy US TBills or agency paper no more out than 90 days and keep the cash rolling in that area until we reach a point when the rates are peaking. Toward the end, the yield curve will invert so that means the short-term rates will exceed long-term when confidence is shaken.

In an upward cycle for interest rates, never lock & load – always stay nimble if you are the investor. If you are the borrower – load & load fixing the rate out as long as possible.

....related from Martin: Russia Dumps US Bonds – Is it Politics or Yield?



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Bonds & Interest Rates

Leveraged-Loan Risks Are Piling Up

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Posted by Wolf Richter

on Wednesday, 11 July 2018 11:47

yield

US junk-bond issuance in June plunged 31% from a year ago to just $14.5 billion, the lowest of any June in five years, according to LCD of S&P Global Market Intelligence. During the first half of the year, junk bond issuance dropped 23% from a year ago to $110.6 billion.

Is investor appetite for risky debt drying up? Have investors given up chasing yield? On the contrary! They’re chasing harder than before, but they’re chasing elsewhere in the junk-rated credit spectrum.... CLICK for the complete article



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