Gregor Weekly Model Portfolio Update: 16 December 2009

• Gregor Macdonald
• December 16th, 2009

Quietly, without much attention, the long end of the US Treasury market continues to deteriorate. It’s just not pronounced enough yet to draw much attention. And as someone who’s been interested in going short US Treasuries for over three years now (without having done so), I can understand the complacency. Or is is caution?

This January, I wrote in Gregor.us Monthly (Saving Hugh Hendry) that the 27 year bull market in US Treasuries had very likely just come to an end, in December. Of course, at that time, I had thought the stimulus package from Washington was going to build energy and transport infrastructure that would make the economy more competitive. I did not anticipate that the situation for Treasuries would actually worsen, as Congress and the Administration tried to keep every failed business and failed foreign policy running. With the amount of US Treasury supply now in train, I should have been more emphatic.

So let’s do that now: the 27 year bull market in US Treasuries from 1982 to late December 2008, is now over. I assume the rallies on the way down will be vicious, but that is only to be expected given that the bear market should run at least through the next decade, if not longer. For now, however, let me address the next 6 months. (this article continues for subscribers through the membership gateway, on the right side of this page)

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More from Gregor Weekly

• Gregor Weekly Model Portfolio Update: 23 September 2009
• Gregor Weekly Model Portfolio Update: 10 December 2009
• Gregor Weekly Model Portfolio Update: 07 October 2009
• Gregor Weekly Model Portfolio Update: 03 December 2009
• Gregor Weekly Model Portfolio Update: 24 December 2009

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