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  • TLT Is A Fist-Pounding Buy. The Debt Binge is Sustainable [Edit or Delete]0 comments
    Feb 9, 2012 3:10 PM | about stocks: TLT
    iShares Barclays 20 Year Treasuries (TLT)

    TLT is a huge buy at these levels and is entering oversold territory for no good reason. Bernanke hasn't given even the slightest hint of ending raising rates and this global economic boom is providing excess liquidity that will keep flowing into near-zero yielding US paper, even as risk-on asset classes like stocks and oil keep rallying. I recommend buying the 115 March TLT 2011 calls in addition to DIA March 2011 129 calls. There is no way this trade can possibly fail, unless Bernanke abruptly puts the brakes on quantitative easing and or the options expire OTM. The faintest whiff of economic trouble will send TLT soaring $2 in a single day while DIA may only be down $1.

    The liberals and fiscal conservatives are running their scare campaign, trying to get foreign bond holders to liquidate by spreading lies about the debt and questioning Bernanke's competence. I'll reiterate: spending poses a nonexistent risk to the economy and the ballooning government deficit incurred since 2002 hasn't been shown to be inflationary. We're still in a Goldilocks economy of strong economic growth, tame inflation, and no deflation. The fed needs its independence, just as Consumers need to keep maxing out the credit cards. Sometimes it's OK to spend money you don't have when you control the printing presses. The debt binge is sustainable.

    Themes: TLT Stocks: TLT
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