Thursday, February 14, 2008

Long bond falling

While credit concerns at monoline insurers played a hand in today's across-the board selling of muni closed-end funds, let's not overlook the fact that long treasuries were also falling hard. It happened at the same time that Bernanke was babbling about "inflation expectation being well anchored". Coincidence? I think not. The next major support on the TLT is 90. I doubt it will hold for long.

So where is this money going? Where is the new safe haven? On the same day that DOW dropped 175 pts, the CRB index is conspicuously strong.