Last week I mentioned that I thought treasury yields would unwind some of the Katrina reaction. This occurring today and may continue a little longer.
There is nothing insightful about this call. Markets tend to react to external events harshly and then unwind back to about, not exactly, where they were before. Over the weekend I suggested 4.20% on the ten year might make sense and while that could be wrong in terms of specifics the idea has a lot of historical precedent in terms of direction. This applies to most asset classes.
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1 comments:
Hi Roger,
You're right, typically most assets do unwind after some external shocks. However, you might want to consider if the additional petrodollars (from higher oil prices) will make their way into Treasuries (i.e. 10 year). Also, you might want to also consider the privatization of Japan's Postal Savings System. Who knows how all of this will play out... I suppose time will tell. By the way, I really enjoy reading your insights.
-sam
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