Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them. If one, or a whole bunch, has to first “borrow” a security the one doesn’t own in order to sell something at a high price betting the price to go down, you can likewise bet there’s someone out there in the financial landscape more than willing to let you borrow that security – for a fee.
Leverage all around.
When it comes to the intersection of bonds and securities lending, money dealers may not have quite the inventory themselves but they certainly have access to any kind of instrument you could want to borrow from those who do (insurance companies and pension funds, to start with). If, as a speculator, you think inflation’s going up (or, at least, a touch less deflation) and growth prospects system-wide are improving, then your shorting sense is surely to zero in on safe and liquid assets especially if they are yielding somewhere down close to zero. Read more…..
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In this interview from 2010, the world’s most famous investor chats with Jay Z and Steve Forbes about talent, success and building moats.