Thursday, January 1, 2009

A New Year's Resolution-Sell your Government paper!!

Sell it!

Sell your 10 year paper!

Sell your 30 year paper!

Sell your 5 year paper! Credit Suisse said to buy 5 year paper two weeks ago. That's a call? Just sell it to them!

Sell your Treasuries! You had a heck of a year. The best since 1995. So just sell them!

Unless you are parking money for security purposes, you should sell it all. Sell them to PIMCO if they are supposedly so bullish on bonds. Sell it to Goldman. Sell it to BlackRock. Sell it to Wellington. Sell it to the fools swarming over this paper. Hit the bids for gosh sakes!

Just go and sell it!

Sell it to those shills that say we are going into deflation like Japan. Lock in interest rate swaps with these Wall Street dealers, who say rates are going to stay down here. Aren't these the same folks that told you oil was going to $27? Did that work? Did anyone notice the action in oil yesterday?

Hell, sell it to Treasury! They say they are going to buy $500 billion of MBS, of which, I find doubtful, so sell it to them.

But just start the New Year right by selling!

Sell your bonds to those bearish on platinum at $900! Did you see the action in platinum yesterday? Did that look like the start of a breakout? Didn't Wall Street say that platinum would be stagnant for the next couple of years? That's just stupid talk, promoted by those who need trading to live!

Sell your bonds to those that were bearish on the dollar at 147 against the Euro!

Remember the failures in the delivery market for Treasuries? How is it possible that our Government, is now finally going to do something about it, and do it quickly?

Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions, according to a Federal Reserve-backed industry code to be implemented in the next six months. The plan, which strengthens official oversight of trading, will be unveiled as soon as Jan. 5, said Thomas Wipf, chairman of the Treasury Market Practices Group and the head of institutional securities group financing at Morgan Stanley in New York. “It seems quite obvious that the Fed and Treasury cannot and will not accept the status quo for much longer,” Wipf said in an interview. Demand for Treasuries is so great that investors are lending cash for next to nothing to obtain the securities as collateral through repurchase agreements, or so-called repos. The problem is market participants haven’t always delivered the bonds, causing “fails” to exceed $5 trillion at their peak, according to the New York Fed.

Remember when this "naked" problem was systemic? I wrote about that on October 25.

Look at the above graph. Did you see a move after October 25? In fact, wasn't that the greatest move ever in the history of the bond market?

Now ask yourself. Does this government ever do anything for Wall Street without first tipping them off?

And if you can't find a reason to get bearish on bonds, because economic reasons appear to be negative, then just use semantics. Call the move a bubble! Doesn't everyone know that bubbles end badly! And call the dour forecasts just a "negativity" bubble.

Call it whatever you want, as long as it gets you to move! And as long as it gets you to sell!

So sell it now! All of it!

That should be your New Year's resolution!

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