Re: Trade ideas...lets see what we can come up with
Another trade today:
US 10yr yield is now just above 5.02%.
likely causes are 1) economist's survey reveals they feel new growth will not cause inflation so no rate hikes in the future (capacity hasn't fallen, so future demand must be expected to fall). in that vien, home depot & others have talked their forcasts down.
2) subprime downgrade possible for just over 12bil in securities by S&P. may cause demand for safe debt.
3) related to 1, possible slower growth & lower earnings and feeling that subprime mortgage market may still indeed spill over to consumer demand which has remained robust throughout.
i think there are some good reasons for the rally, but i feel it overshot and the yield we are seeing now is too low relative to current economic conditions imo.
so i'm back to being more strongly short the us10yr.
maybe a signal of around -50 to -60%
Barron
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