My Conversation With the 30-Year Long Bond

Mish

For the third time, the yield on the 30-year long bond dipped below 2.0%. I asked Mr. Bond some questions.

My Conversation With Mr. Bond

Hello Mr. Bond. You just cannot seem to stay away from 2.0%.

We missed you. Welcome back. Will this be a longer visit? Are you calling for a recession?

Unfortunately, Mr. Bond did not answer. He just winked.

Yield Curve Inversions

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Treasury Curve Details

  1. There is now a solid wall of inversions. Every Treasury Note and bill from three-year down is inverted with the next lower duration.
  2. The 10-year yield is inverted with 6-month and shorter durations.
  3. The 30-year long bond dipped below 2.0% for the third time and is just 6 basis points from a record low.

Bond yields at the long end fell substantially today as Equities Hammered in Coronavirus Bull Trap Sea of Red.

Mike "Mish" Shedlock

Comments (33)
No. 1-10
truthseeker
truthseeker

Mish to your credit you’ve been way out front on the Coronavirus epidemic way ahead of everybody else. So you’ve liked gold and bonds for a long time so that’s working, and I was just wondering what else are you doing that seems to make sense right now?

Mish
Mish

Editor

Sechel is correct on a key point. Real rates are hugely negative and have been for some time. I have some charts to prove it. Depends on what one thinks inflation is. But my charts fully explain the bubbles.

Thinking about sending it to the WSJ but they have ignored a half-dozen articles if not more of my previous attempts.

Mish
Mish

Editor

Thanks Truthseeker.

I cannot explain why, but I latched onto this one right from the beginning. I dissed the bird flu stuff big time.

I am in some illiquid plays right now. I mean extremely illiquid. Private placement stuff only for accredited investors. One is medical, the other CBD related.

They both may become liquid within months. Here is one of them: MDXL. In at a dime. It goes many days without trading a share so any price you see is not likely to be be accurate. Entire float locked up by private placement accredited investors.

The S1 is finally filed after 3 years of waiting, but not yet approved by the SEC. I am one of the largest shareholders. You can find my name.

Those shares are are at a dime,

That is one of two very big (for me) bets and I believe both will pan out.

Looking globally, I strongly suggest outside the US. I like Japan.

I am in Japan now, some yen-hedged and some not.

Mish
Mish

Editor

Those interested in Medixall MDXL can find out about it here

It is illiquid so do not try to buy shares.

In short, the idea is based on delivering competitive bidding to the market starting with things like MRIs, Dental, etc. I like the concept and eventually made a big bet on it.

Mish
Mish

Editor

I will give you another "black swan" sort of.

I get mocked for this but I firmly believe Trump is going to lose the election. I have a post of 10 reasons why, already written for over a week, but got distracted by coronavirus.

I am also tired of this TDS nonsense. All my anti-Trump posts cost me readership. I do them anyway, but there is only so much I can do before I have to stop for a while.

And I did vote for him over Hillary and would do so again.

Mish
Mish

Editor

I am going to do another post, but this is an important discussion from many standpoints. One of the few investment-related threads in long time.

Feel free to keep this chain going even after my next post.

Mish
Mish

Editor

"It's getting really old."

Then leave. I don't care one bit.

Tony Bennett
Tony Bennett

"Unfortunately, Mr. Bond did not answer. He just winked."

...

Yeah, he's coy with a multitude of head fakes.

But I got him loosened up years ago (a good bottle of wine will do that) and he confided yield will hit 1% (or lower?) before he's through.

Ebowalker
Ebowalker

Basic question I have:

If the economy is growing at a rate of $100 a month but the government is running deficits at $150 per month how is that not recognized as a functional recession? I know it isnt a literal one by definition but wouldnt it be by all common sense measures??

mrutkaus
mrutkaus

Mish: Good evening, my name is Mish Shedlock, how can I help you?

Bond: Good evening, my name is Bond, Long Bond. I would like to make my market more interesting.

Mish: How would you like your market?

Bond: Shaken. And stirred.


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