I actually like going long on bonds...though I would go for U.S. Treasuries with around 10 year maturities. I like the shorting of equities, especially in tech companies running in 2nd place or worse in their market.

The market has priced in a nice recovery but I think a double dip recession is likely. I don't like the risk of the corporate bonds...the market has priced in a lot of "Enron" risk but not enough true, economical risk. I don't think it's worth chasing the % points with all the risk considering long term you're better off in stocks(not now though). I think when the time comes to buy heavy into stocks again you won't want those corporates because they will have dropped in value considerably because of the negative sentiment. I would stick with the safety of Treasuries which are more liquid and may actually increase in value due to a flight to quality.


Basically, I think the economy is worse than people think. GDP is going up partly because we are importing less which actually causes GDP to rise. Also, 0% financing of autos and cost slashing can only prop up demand for so long. I think all the bullets are spent. The manufacturing sector is temporarily heating up again but they may be in for a rough surprise when inventories start piling up again.


Inflation is a problem on the horizon so I would stay away from something like any bond in the 30 year vicinity.