The bond market has been in a bear market for sixty-three months. Sixty. Three. Months. We can’t get lower prices for sixty-three days (or six days, for that matter) in equities, but it is what it is.
With today’s dismal jobs report, bonds are slipping yet again, keeping alive the prospect that the latest pink pattern breaks down, sending interest rates ripping higher.
Looking at the multi-decade /ZB futures, you can see how, chunk by chunk, we’ve been breaking down. With $37 trillion in debt (and trillions more coming, thanks to a continued wealth transfer to the likes of Peter Thiel), the last thing the U.S. needs is higher rates, but that’s precisely what’s coming.
One way to play this is by way of TBT, the ultra-short-on-bonds ETF. As with any leveraged instrument, it’s a choppy beast, but it’s just about tripled over the past five years. Find me any other leveraged instrument which has done anything close to that (you won’t, since most of them just get ground into hamburger, since that’s the nature of the beast).
By their very nature, leveraged funds tend to get turned into hamburger (example: QID has gone from $127,000 to $27 since the financial crisis). The bond bear market has been relatively persistent, however, so TBT has actually tripled over the past five years, which is extraordinary.
