--Gordon Gekko (Wall Street: Money Never Sleeps)
Ten yr rates flying again this morning. Stock down in sympathy about 1.5%.
In a zero interest rate policy (ZIRP) world with investors reaching for yield, are we under-estimating how much leverage is in Treasuries? There is a case to be made that investors are leveraged long Treasuries at historic proportions.
If so, and those carry traders are becoming risk averse, then selling begets selling. And dominos fall.
position in SPX, Treasuries
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1 comment:
When you combine ignorance and leverage, you get some pretty interesting results.
~Warren Buffett
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