On one hand we have Goldman (and various other pundits) telling us there may be a small blip at most in Treasurys when the Fed stops buying bonds. On the other, as has been much discussed, we have the world's biggest bond manager disagreeing. Now he gets some popular company. Jim Rogers, formerly of the Quantum Fund, who traditionally comments more on the commodity space has chimed in and pledged his allegiance to Team Gross. In a release to Reuters Insider Rogers said: "If the bond goes up another 3 or 4 points, I for one am going to sell it short." He also said what we have been saying since about October of last year: "I mean the market is just going to give up. Once (the Fed) ... stops buying bonds I'm not sure who's left to buy bonds at that point." The right question is who are Primary Dealers going to flip their bonds to, especially once the marginal increase in excess reserves ends.
From Reuters:
Leading investor Jim Rogers said on Thursday he plans to short U.S. Treasury bonds if their price rises much higher.
"If the bond goes up another 3 or 4 points, I for one am going to sell it short," he told Reuters Insider in an interview from Singapore, where he is based.
Rogers was not specific about which duration bonds he was referring to, beyond mentioning 30-year paper in a comment about what he sees as a coming sell off.
"I just think at some point along the line, people are going to realise it's absurd to lend money to the United States government for 30 years in U.S. dollars at 3 or 4 or 5 or 6 percent interest," he said.
"I mean the market is just going to give up. Once (the Fed) ... stops buying bonds I'm not sure who's left to buy bonds at that point."
The Federal Reserve's asset-purchasing quantitative easing programme is due to end in June.
No comments:
Post a Comment