Comments on: Morgan Stanley expects 10-year yields to rise 220 bps in 2010 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html a finance news and opinion site Tue, 09 Feb 2010 23:29:54 +0000 hourly 1 By: nittany222http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7705 nittany222 Mon, 23 Nov 2009 05:15:57 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7705 Recall that this 220 bps rate increase could be good news for pension sponsors, as liabilities would decrease 25-35% under such a scenario. Depending on the nature of the plan investments, this could result in net gains for plan sponsors, and lower funding and P&L pain. Recall that this 220 bps rate increase could be good news for pension sponsors, as liabilities would decrease 25-35% under such a scenario. Depending on the nature of the plan investments, this could result in net gains for plan sponsors, and lower funding and P&L pain.

]]> By: Bill Coppedgehttp://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7704 Bill Coppedge Mon, 23 Nov 2009 00:26:11 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7704 Things to do: 1. Buy TBT; 2. When UST 10 is 5.5 sell TBT and buy TLT; 3. Rinse and repeat. Things to do: 1. Buy TBT; 2. When UST 10 is 5.5 sell TBT and buy TLT; 3. Rinse and repeat.

]]> By: nittany222http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7226 nittany222 Sun, 22 Nov 2009 22:15:57 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7226 Recall that this 220 bps rate increase could be good news for pension sponsors, as liabilities would decrease 25-35% under such a scenario. Depending on the nature of the plan investments, this could result in net gains for plan sponsors, and lower funding and P&L pain. Recall that this 220 bps rate increase could be good news for pension sponsors, as liabilities would decrease 25-35% under such a scenario. Depending on the nature of the plan investments, this could result in net gains for plan sponsors, and lower funding and P&L pain.

]]> By: Bill Coppedgehttp://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7224 Bill Coppedge Sun, 22 Nov 2009 17:26:11 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7224 Things to do: 1. Buy TBT; 2. When UST 10 is 5.5 sell TBT and buy TLT; 3. Rinse and repeat. Things to do: 1. Buy TBT; 2. When UST 10 is 5.5 sell TBT and buy TLT; 3. Rinse and repeat.

]]> By: Christopher Pavesehttp://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7215 Christopher Pavese Fri, 20 Nov 2009 15:09:02 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7215 I don't mind shops "talking their book" . . . but find humor in those that always seem to talk out of both sides of their mouth!!<br><br>Just read a very well written piece from Morgan Stanley's Henry McVey, Head of Global Macro & Asset Allocation, which clearly expresses the firm's conviction in low-inflation, deflationary risks to global markets.<br><br>"If so, we believe it might be in some investors’ interest to reconsider their tactical asset allocation strategies. Specifically, we would envision a reduction of overweight positions in risk assets—equities in particular—and a shift of fixed-income exposures away from credit and towards global sovereign bonds."<br><br>Which one is it guys?? I don't mind shops “talking their book” . . . but find humor in those that always seem to talk out of both sides of their mouth!!

Just read a very well written piece from Morgan Stanley's Henry McVey, Head of Global Macro & Asset Allocation, which clearly expresses the firm's conviction in low-inflation, deflationary risks to global markets.

“If so, we believe it might be in some investors’ interest to reconsider their tactical asset allocation strategies. Specifically, we would envision a reduction of overweight positions in risk assets—equities in particular—and a shift of fixed-income exposures away from credit and towards global sovereign bonds.”

Which one is it guys??

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7214 Edward Harrison Fri, 20 Nov 2009 14:30:03 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7214 exactly! I haven't seen their macro forecast, but 5.5% is death to both life insurers and the mortgage market. exactly! I haven't seen their macro forecast, but 5.5% is death to both life insurers and the mortgage market.

]]> By: haris07http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7213 haris07 Fri, 20 Nov 2009 14:27:19 +0000 http://www.creditwritedowns.com/2009/11/morgan-stanley-expects-10-year-yields-to-rise-220-bps-in-2010.html#comment-7213 Stupid investment banks don't realize that if the 10 year does rise to 5.5% or anywhere near that, the recession will be destined to become worse (double dip, near depression...whatever). The ONLY way to have a muddle through economy is to hope and pray that the deflation argument trumps or is enough to counter any inflation and that keeps yields in line. A 10 year at 5.5% will kill whatever little growth that the economy has by raising credit costs beyond anything that the economy can support. So, MS arguing that the ratesd will rise to 5.5% because economic growth will be high is sufficient in and of itself to kill that very growth. Stupid investment banks don't realize that if the 10 year does rise to 5.5% or anywhere near that, the recession will be destined to become worse (double dip, near depression…whatever). The ONLY way to have a muddle through economy is to hope and pray that the deflation argument trumps or is enough to counter any inflation and that keeps yields in line. A 10 year at 5.5% will kill whatever little growth that the economy has by raising credit costs beyond anything that the economy can support. So, MS arguing that the ratesd will rise to 5.5% because economic growth will be high is sufficient in and of itself to kill that very growth.

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