Hi Rich, thanks so much for Stay Vigilant and your LinkedIn posts. May I please request a Stay Vigilant topic for your consideration....With increasing probability of entering a recession in the next few months, there's increasing probability of Treasuries seeing a price appreciation. I can see the relatively short lived but distinct blip in NAV of TLT around 2008-2009 for example. Not so obvious is the cause or how different Treasury maturities may be affected. Which appreciate because of investor flight to safety, which appreciate by action of the FED lowering rates? A perturbation of this market cycle positioning strategy may be the debt ceiling Treasury dynamics (Jesse Felder recently wrote about Growing Potential For ‘Turbulence’ In Treasurys). And then there is the wild card of why and when foreign holders of Treasury Securities may have an interest in selling Treasurys at a more rapid pace--certainly there are monetary policy reasons for doing so in various countries, but a possibility exists for a more aggressive attempt to perturb US markets at some point. And should a transition to stagflation arise could there be 2022 part 2 erosion of the negative correlation of Treasurys to stocks and loss of their flight to safety value?
Carl - I have touched on some of this in previous posts. However, I will certainly look to discuss this sometime this month given Secretary Yellen tells us the drop dead date is now June 1
Hi Rich, thanks so much for Stay Vigilant and your LinkedIn posts. May I please request a Stay Vigilant topic for your consideration....With increasing probability of entering a recession in the next few months, there's increasing probability of Treasuries seeing a price appreciation. I can see the relatively short lived but distinct blip in NAV of TLT around 2008-2009 for example. Not so obvious is the cause or how different Treasury maturities may be affected. Which appreciate because of investor flight to safety, which appreciate by action of the FED lowering rates? A perturbation of this market cycle positioning strategy may be the debt ceiling Treasury dynamics (Jesse Felder recently wrote about Growing Potential For ‘Turbulence’ In Treasurys). And then there is the wild card of why and when foreign holders of Treasury Securities may have an interest in selling Treasurys at a more rapid pace--certainly there are monetary policy reasons for doing so in various countries, but a possibility exists for a more aggressive attempt to perturb US markets at some point. And should a transition to stagflation arise could there be 2022 part 2 erosion of the negative correlation of Treasurys to stocks and loss of their flight to safety value?
Many thanks for your consideration,
Carl
Carl - I have touched on some of this in previous posts. However, I will certainly look to discuss this sometime this month given Secretary Yellen tells us the drop dead date is now June 1
Thank you for the suggestion
Once again a fantastic run down of everything that happened during the past week