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Team Treasury Scores Again

The opinions expressed by columnists are their own and do not necessarily represent the views of

Have you ever been to a football game in which the winner had already been decided in the early quarters? 

One team was so dominant that you simply filled your time with tasty hot dogs, cold beer, roasted peanuts, and warm popcorn, all while you watched an occasional good play or two. 

You whiled away the hours enjoying both the good atmosphere and camaraderie just waiting for the game to end.  Yet, no matter the score, it’s always difficult to leave early just on the chance there might be a few fireworks (great plays) before time expires in the 4th quarter. 

However, as you looked around, you noticed other fans heading for the exits, as they too anticipated the inevitable. 

As a matter of fact, getting out of the stadium before the majority of the crowd leaves is sometimes a good idea, but not always.  The same concept can be applied to the bond market. 

Over a year ago, I called for the 10-year Treasury to break 2%.  My prognostication was challenged, ridiculed, and downright laughed at. 

The giants like Gross, Schiff, and Buffett said “absurd,” “a must-short,” “not even close.” 

History, however, is always the final judge.  Now that we’ve not only broken 2% on the 10-year but have also dipped below 1.5% for a short time, a very important question arises, just like the great Peggy Lee once sang: “Is that all there is?” 

Reaching its lowest yield in over 220 years should definitely alert everyone to the fact that it’s “game over” and time to leave the stadium. 

And yet, even though I have recently updated my prediction for the 10-year yield to sink below 1% in the not-too-distant future, I also think it might be time to rise from our seats, leave the empty containers behind, and head for the parking lot. 

After all, for several decades Treasuries have clearly been the dominant team.  For that reason, it would make sense to stay ahead of the crowd. 

What bothers me, however, is the number of times I’ve, in fact, left the game early.  Not to have missed a change in the outcome but to have missed some of the greatest plays of the game made in the final quarter. 

Thus, given the rapid ever-changing events of the world, it would seem there may be a few more great plays remaining for Team Treasury. 

As a Western New York boy, the late 4th quarter antics of Jim Kelly, Frank Reich, and Doug Flutie surely make me believe there may be more to come.  When concern becomes worry, then turns into fear, and finally develops into panic, Team Treasury can definitely provide a safe haven. 

As a result, the move from 1.5% to 1.0% is not that inconceivable.  In percentage terms, that’s a whopping 33% difference which may be worth sitting in the stadium just a little while longer. 

Pass the popcorn, please.

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