"The bubble in Treasuries looks ready to pop, sending prices on government debt sharply lower. But just about every other corner of the bond market beckons -- and could provide competitive returns with stocks, even if the equity markets have a strong 2009."
http://online.barrons.com/article/SB123094029415750267.html?mod=ba_mp_view
My Comments: I agree with the basic thrust of this article. Risk-reward favors shorts in U.S. treasuries. But to reduce the downside risk, I am keen to play it through break-evens. 10-year break-evens imply virtually no inflation. The market’s price escalation outlook seems at variance with the current level of 10-year real yields. If rates decline further, inflation protected securities should keep pace with nominals. More likely, there will be a vicious sell-off in nominal bonds at some stage.
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