With the Fed ready willing and able to raise rates....bonds still are selling. But there are many reasons for the bond anomaly....see link.
Indeed, the SURE DROP in bonds seems to be part of the recent rally in stocks!
Nobody wants to hold bonds in this environment....yet everyone is buying them in light of the weak economy and hedge fund troubles....
All and all the best course of action seems to be BUY A SIX MONTH BANK CD at the best rate possible and let this situation resolve itself before making any big moves......
Remember a 25 BP per month....in six months Fed Funds are 1.5% higher! Greenspan seems to be going to 5.5%....but he may rest for a month after reaching 4%......
And the CHINA RE-VALUATION will cause HUGE LOSSES as the dollar is in effect devalued vis-a-vis the Chinese currency....are we to suppose that the Bank of China will just take their losses....and will this supposed devaluation be INFLATIONARY IN THE US....? My hunch is that it will be.
