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TBT and QE3

slo1
Posts: 4,337
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9/11/2012 9:32:20 PM
Posted: 4 years ago
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?
darkkermit
Posts: 11,204
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9/12/2012 11:04:23 PM
Posted: 4 years ago
At 9/11/2012 9:32:20 PM, slo1 wrote:
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?

why does it matter what the yield is?
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slo1
Posts: 4,337
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9/13/2012 7:19:27 AM
Posted: 4 years ago
At 9/12/2012 11:04:23 PM, darkkermit wrote:
At 9/11/2012 9:32:20 PM, slo1 wrote:
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?

why does it matter what the yield is?

When yields go up, bonds loose value. When yields go down bonds gain value.
darkkermit
Posts: 11,204
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9/13/2012 12:26:13 PM
Posted: 4 years ago
At 9/13/2012 7:19:27 AM, slo1 wrote:
At 9/12/2012 11:04:23 PM, darkkermit wrote:
At 9/11/2012 9:32:20 PM, slo1 wrote:
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?

why does it matter what the yield is?

When yields go up, bonds loose value. When yields go down bonds gain value.

yea, but so what?
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slo1
Posts: 4,337
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9/13/2012 2:55:13 PM
Posted: 4 years ago
At 9/13/2012 12:26:13 PM, darkkermit wrote:
At 9/13/2012 7:19:27 AM, slo1 wrote:
At 9/12/2012 11:04:23 PM, darkkermit wrote:
At 9/11/2012 9:32:20 PM, slo1 wrote:
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?

why does it matter what the yield is?

When yields go up, bonds loose value. When yields go down bonds gain value.

yea, but so what?

you young pups need some schooling on making money. That is what it is for.......making money. Money, money, money..........without it you are just living on the trash heap outside the city of Manila licking crumbs out of wrappers you find and looking for extra thick cardboard and tin to build an addition on to your house.
slo1
Posts: 4,337
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9/13/2012 3:08:34 PM
Posted: 4 years ago
Fed goes through with QE3. i think I read they will buy $40 billion worth of mortgage backed securities a month.

- This will keep mortgages low. I'm not certain where refinances are at the moment, but they have to be off the hook.

- They promised to keep rates low in to 2015.

Money is cheap, spend, spend, spend.

- On a longer term outlet when the Fed is done they will have more than $3 trillion of US bonds and mortgage backed securities on their balance sheet.

A. How do they unwind that without causing a crash in the bond market?
B. How can they unwind that before the next recession?
C. At what point can't this be reversed and the doomsday scenarios become more likely?
darkkermit
Posts: 11,204
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9/13/2012 3:32:43 PM
Posted: 4 years ago
At 9/13/2012 2:55:13 PM, slo1 wrote:
At 9/13/2012 12:26:13 PM, darkkermit wrote:
At 9/13/2012 7:19:27 AM, slo1 wrote:
At 9/12/2012 11:04:23 PM, darkkermit wrote:
At 9/11/2012 9:32:20 PM, slo1 wrote:
I'm really conflicted on the 1 to 2 year outlook for long term bonds. If the Feds go forward with QE3 and buys bonds in addition to their current operation twist, it will obviously keep yields low.

We know that despite the interventionist policy of bond buying the continued Europe pressures of Greece, Italy, and Spain has the potential to cause a mad rush to US bonds, which also would drive yields down.

On the other hand, the upcoming fiscal cliff when we get to see the Repubs and Dems fight, but ultimately produce the similar plan of not getting annual budgets back to the black for 10 to 20 years. This may pressure lack of demand for treasuries. Although, it was though a downgrade of our debt would do the same a year ago and it had no such affect.

Anyone have any other insights which could either cause yields to increase or decrease in next two years?

why does it matter what the yield is?

When yields go up, bonds loose value. When yields go down bonds gain value.

yea, but so what?

you young pups need some schooling on making money. That is what it is for.......making money. Money, money, money..........without it you are just living on the trash heap outside the city of Manila licking crumbs out of wrappers you find and looking for extra thick cardboard and tin to build an addition on to your house.

You can make money through other sources besides bonds.......
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FREEDO
Posts: 21,057
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9/13/2012 10:12:01 PM
Posted: 4 years ago
QE3 should help. But not as much as QE1 did. And there would have been better options if congress cooperated with the Fed.
GRAND POOBAH OF DDO

fnord
darkkermit
Posts: 11,204
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9/13/2012 10:31:22 PM
Posted: 4 years ago
At 9/13/2012 10:12:01 PM, FREEDO wrote:
QE3 should help. But not as much as QE1 did. And there would have been better options if congress cooperated with the Fed.

Since when were you a fan of the FED?
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FREEDO
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9/14/2012 3:45:54 AM
Posted: 4 years ago
At 9/13/2012 10:31:22 PM, darkkermit wrote:
At 9/13/2012 10:12:01 PM, FREEDO wrote:
QE3 should help. But not as much as QE1 did. And there would have been better options if congress cooperated with the Fed.

Since when were you a fan of the FED?

There's a little green man in my brain that runs around and pulls switches.
GRAND POOBAH OF DDO

fnord
Wallstreetatheist
Posts: 7,132
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9/14/2012 7:06:38 AM
Posted: 4 years ago
At 9/13/2012 10:12:01 PM, FREEDO wrote:
QE3 should help. But not as much as QE1 did. And there would have been better options if congress cooperated with the Fed.

But what about economics?
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