Hussman Calls Treasuries at Current Yields Greater Fool Speculations

A very similar article from Marketwatch
The author suggest using an short or ultrashort ETF PST. I really don't like buying a short ETF, doesn't anybody know a way to short 10-30 year treasuries without using a short or ultrashort fund etf?
 
A very similar article from Marketwatch
The author suggest using an short or ultrashort ETF PST. I really don't like buying a short ETF, doesn't anybody know a way to short 10-30 year treasuries without using a short or ultrashort fund etf?

Commodity futures markets, or short an ETF which is long or even double long the treasury maturities that you want. Of these two, the commodity markets are more tax efficient for a short.

Another way would be futures options.

ha
 
I tried shorting several of the treasury ETFs online but Schwab rejected them. After calling Schwab I guess they don't have sufficient shares for borrowing. They are going call me and perhaps they can help.

I've never had a commodities account and they only time I traded future options was in my MBA finance class. (I got an A, eventhough I and the entire class lost money on our paper trades LOL).

It is a bit frustrating because I feel very confident that in 3+ years from now long-term Treasury bills will be considerable lower than they are today perhaps 1/2 the price. But I don't want to use a double-short, because the one thing we've learned is that exotic financial instruments can blow up big time. I have little confidence that a ultrashort ETF like PST will survive a massive short term drop to in long-term T-Bonds from say 2.8% to less than 1.5%.

Back in 1999 I shorted internet stocks Amazon, AOL, and Yahoo. I thought about using options but I didn't know when the madness would end only that eventually it would. A clitch in Schwab computers showed last month reminded of how much I could have made YHOO at 200, boy that would have been sweet to cover this last month..
 
Hussman Funds - Weekly Market Comment: Portfolio Rebalancing - Don't Ignore Duration

Since some like the OP to give his opinion rather than just posting a link, here is mine: I think longer term treasuries at current yields had better be speculations, since if held to maturity they are obvious losers.

Ha
" they are obvious losers."


I don't really understand..Seems to me if we go into a depression that lasts a very long time then they may likely be the only thing that makes money. Seems like that's what this market is expecting..Am I wrong?
Perhaps people are just holding them for the same reason I hold gold.....insurance
 
" they are obvious losers."


I don't really understand..Seems to me if we go into a depression that lasts a very long time then they may likely be the only thing that makes money. Seems like that's what this market is expecting..Am I wrong?
Perhaps people are just holding them for the same reason I hold gold.....insurance
Well, you just agreed with me. Unless you are expecting a never ending depression, one day the depression will end and interst rates will go up. Do you want 3.5% for 20 years, locked in?

No? Then you are speculating, figuring on holding until the right time to dump it on a greater fool.

Often works, but it should be seen for what it is.

Ha
 
Well, you just agreed with me. Unless you are expecting a never ending depression, one day the depression will end and interst rates will go up. Do you want 3.5% for 20 years, locked in?

No? Then you are speculating, figuring on holding until the right time to dump it on a greater fool.

Often works, but it should be seen for what it is.

Ha

I think we're saying the same thing except I think there may in fact be people that want them just in case we do in fact go into a very deep and extended depression..There's also the chance that the dollar crash's...
 
There's also the chance that the dollar crash's...

True enough. But then a T bond is just a long term promise to pay a certain # of USDs. It doesn't seem that it would be an ideal hedge against dollar depreciation.

ha
 
True enough. But then a T bond is just a long term promise to pay a certain # of USDs. It doesn't seem that it would be an ideal hedge against dollar depreciation.

ha


Absolutely agree...again..but can you tell me what is? Everything I thought would have performed well last year did not...I would love to hedge against dollar depreciation but I don't have a clue how to..I no longer even see gold as a good hedge..
 
lawman - with the crystal ball being so very cloudy right now, even stuffing cash in your mattress could be risky (if the dollar falls). The only common sense thing to do as far as I can see is to buy non-food commodities. Gold is over-rated (IMO) - impulse driven. Oil is crazy. But metals in general should keep their value when all else drops (or all else climb). Copper, Aluminum, Titanium, and other industrial metals (purchased as an ETF) are about as safe as anything else you can find.
 
It is a bit frustrating because I feel very confident that in 3+ years from now long-term Treasury bills will be considerable lower than they are today perhaps 1/2 the price. But I don't want to use a double-short, because the one thing we've learned is that exotic financial instruments can blow up big time. I have little confidence that a ultrashort ETF like PST will survive a massive short term drop to in long-term T-Bonds from say 2.8% to less than 1.5%.

You could try the Rydex Inverse Government Long Bond Strategy fund (RYJUX). It tracks the yield on long-term bonds instead of the price.
 
lawman - with the crystal ball being so very cloudy right now, even stuffing cash in your mattress could be risky (if the dollar falls). The only common sense thing to do as far as I can see is to buy non-food commodities. Gold is over-rated (IMO) - impulse driven. Oil is crazy. But metals in general should keep their value when all else drops (or all else climb). Copper, Aluminum, Titanium, and other industrial metals (purchased as an ETF) are about as safe as anything else you can find.
Since most metals are used in industry, and industrial production falls during a depression, ...
 
Absolutely agree...again..but can you tell me what is? Everything I thought would have performed well last year did not...I would love to hedge against dollar depreciation but I don't have a clue how to..I no longer even see gold as a good hedge..

While last year can certainly give us many examples of how things can go bad, I don't think it says much about what might or might not be a good inflation hedge.

As for "Can I give you?" -If we have learned anything from this board and the last year it should be find your own investments, make your own decisions. No one will be as sensitive to your own thinking and strategy as you will be.

But, just to put it out there, here is what I believe is an inflation hedge. It isn't direct like TIPS, more indirect, like gold. It has recently cut the dividend almost by 2/3. There is no insider buying. If you consider this consider it long and hard, and do a lot of DD- like Brewer says, you should know more about it than anyone else on earth.

I am buying WY. Six million acres of mostly very high quality commercial timber, mostly located in the 2 premier timber areas of the US- PNW and Southeast. Well financed, historically very well managed, the best silviculture practices. For a while tropical timber growing areas were a big fad, but it has been found that while radiata and similar species grow lots of pulpwood, it stinks for dimension lumber, timbers, and poles.

This should be considered, if at all, only for very long term oriented investors.

As a kicker, they may at some time over the next few years become a REIT, which is eagerly anticipated and would likely give the price a shot. At present they are the last integrated seed- to- board timber company in the US anyway.

Since most metals are used in industry, and industrial production falls during a depression, ...

Isn't he asking about a hedge against USD depreciation? It is easier to defend a city if you know where the attackers will be. Sometimes you have to just make up your mind. :)

Ha
 
While last year can certainly give us many examples of how things can go bad, I don't think it says much about what might or might not be a good inflation hedge.

As for "Can I give you?" -If we have learned anything from this board and the last year it should be find your own investments, make your own decisions. No one will be as sensitive to your own thinking and strategy as you will be.

But, just to put it out there, here is what I believe is an inflation hedge. It isn't direct like TIPS, more indirect, like gold. It has recently cut the dividend almost by 2/3. There is no insider buying. If you consider this consider it long and hard, and do a lot of DD- like Brewer says, you should know more about it than anyone else on earth.

I am buying WY. Six million acres of mostly very high quality commercial timber, mostly located in the 2 premier timber areas of the US- PNW and Southeast. Well financed, historically very well managed, the best silviculture practices. For a while tropical timber growing areas were a big fad, but it has been found that while radiata and similar species grow lots of pulpwood, it stinks for dimension lumber, timbers, and poles.

This should be considered, if at all, only for very long term oriented investors.

As a kicker, they may at some time over the next few years become a REIT, which is eagerly anticipated and would likely give the price a shot. At present they are the last integrated seed- to- board timber company in the US anyway.



Isn't he asking about a hedge against USD depreciation? It is easier to defend a city if you know where the attackers will be. Sometimes you have to just make up your mind. :)

Ha

Ha,

Thanks..That's what I'm looking for..A real answer..I've been participating on another discussion board and I've noticed no one wants to really give specific direct answers to questions..Way too much hedging going on these days...:D I'll check out Weyerhouser...Thanks!
 
You could try the Rydex Inverse Government Long Bond Strategy fund (RYJUX). It tracks the yield on long-term bonds instead of the price.


Thanks for the suggestion. Looking at the portfolio it has 90% cash 10% futures and an expense ratio of 1.3%.. Probably does what I want but that is a lot expense to pay for somebody else holding my cash...
 
Thanks for the suggestion. Looking at the portfolio it has 90% cash 10% futures and an expense ratio of 1.3%.. Probably does what I want but that is a lot expense to pay for somebody else holding my cash...
Everybody wants everything. The above mentioned product would cap risk, and allow you get in at a much smaller scale than going short a contract on the CME.-Ha

Here are the contract specs:

30-Year U.S. Treasury Bond FuturesTrade UnitOne U.S. Treasury bond having a face value at maturity of $100,000 or multiple thereof.Settle MethodDeliveryPoint Size1 point = $1,000Tick Size(Min Fluctuations)FLOOR
Regular1/2 of 1/32 = $15.625

GLOBEX
Regular1/2 of 1/32 = $15.625


Limits/Price BandingFLOOR
No limits

GLOBEX
No limits


Trading HoursFLOOR
Open Outcry: 7:20 a.m. to 2:00 p.m. CT, Monday - Friday

GLOBEX
Sunday/Friday 5:30 p.m.-4:00 p.m. CT; Shutdown period from 4:00 p.m. to 5:00 p.m. nightly Trading in expiring contracts closes at noon, Chicago time, on the last trading day


ListedFLOOR
All listed intervals

GLOBEX
All listed intervals


Product CodesFLOOR
Clearing: 17 Open Auction: US Globex: ZB

GLOBEX
Clearing: 17 Open Auction: US Globex: ZB

Ha,

Thanks..That's what I'm looking for..A real answer..I've been participating on another discussion board and I've noticed no one wants to really give specific direct answers to questions..Way too much hedging going on these days...:D I'll check out Weyerhouser...Thanks!

I should remind that the last stock I mentioned favorably was GE, and it is still quite a bit south of where I mentioned it. :p
 
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