Wednesday, May 27, 2009

Bookkeeping: Covering Majority of iShares Barclays 20+ Year Treasury Bond (TLT)

Too far too quickly in my opinion with iShares Barclays 20+ Year Treasury Bond (TLT); I am covering 95% of my short below $91. (this was only a 1%ish position) We've gone from a 3.2% rate [May 1: 10 Year Bond Surges to 3.2%] to approaching 3.7% on the 10 year within a month. I will reshort on a bounce (maybe $96ish) but with yields flying higher I expect at least verbal jawboning by someone "high up" to restore 'order' in the bond market (at least their version of manipulated order). Obviously if the free market were still in place yields would be far higher... there is so much intervention in this specific market I could be very wrong covering this short as things are wildly mispriced. The real fireworks will come if someday the powers that be lose control of the bond market and their manipulations no longer are effective. Can't wait for that day myself ;)

For this type of staid instrument the move has been "parabolic" the past 4 days.

[May 14, 2009: Fed Views Jump in Yields as Sign of Better Outlook]
[Apr 28, 2008: Bookkeeping - Covering Most of iShares Barclays 20+ Year Treasury Bond Ahead of Fed]
[Nov 21, 2008: Bookkeeping: Initiating Ultrashort Lehman 20+ Year Treasury]

Short iShares Barclays 20+ Year Treasury Bond in fund; no personal position

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