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Are Bonds in Trouble?

Last week, we commented that Richard Fisher's (of the Dallas Fed. Reserve) said that the Fed should cut bond buying activity fast ... even if the stock market tumbles.


Why mention this again?

Because Mohamed El-Erian just announced that he will be leaving PIMCO in mid March. You have to wonder why he's leaving. Just a week ago, he commented that PIMCO was ready to push harder on the equity asset side (worried about bond yields?). Did that create a division of loyalty or conviction between Gross and El-Erian? It was Gross who commented that El-Erian would take over his spot when he retired (he's 69 now).

Putting the two events together (Fisher and El-Erian ... aka the Fed and PIMCO) makes you wonder if there is a connection that you should be concerned about?


Today's chart is a look at the 30 year Bond yields. The recent low was made in July of 2012 and the yields have been up trending up since then ... in spite of the Fed.

Note the current battle ground where the resistance and the support are converging on each other. The current concern is about which way the 30 year yields will break ... to the upside or downside? Bernanke is pushing for the downside, but Fisher is saying whoa ... we are getting into bubble territory. This should have bond investors concerned with their antenna up.

TYX - 30 Year Yeilds - Monthly Chart

 


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