Yves predicted a bond rally and now seems to have caught it square on. He has been predicting this for a while - for example, in Sept when I posted Yankee Curse Day, and back in June when he posted on the Green-Shoot Fed Bull. Yesterday he posted a long analysis at Zerohedge as well as at Black Swan. This chart is his count, which he thought would come back in his June post.
Simply put, he expects bonds to outperform stocks. He now sees a 30-yr Long Bond rate as low as 2.5%, where it touched last Dec. Quite a round trip!
The Bond Guru heretofore has been Bill Gross of PIMCO. He was heavily in corporate debt and was pushing policies for the Fed to support a variety of debt markets. In the last three months he has rolled out of those positions and into government debt. He now expects deflation, not inflation, and a flattening yield curve. Maybe he read Yves post?
It's time to dust off my crystal ball: http://www.bushongbusiness.com/opinion.html
Posted by: Mamma Boom Boom | Friday, October 02, 2009 at 12:27 PM