Thursday, January 18, 2007

Treasury yields and stocks...

I'm betting on a reversal of Treasury yields. The 10-yr. bill is at a 3 month high of 4.78%. This bet is easy with my practice Yahoo finance account. However, I don't have a futures account with real money. I am limited to stocks, so I will make my bet on yields going down with Novastar Financial (NFI), a sub-prime mortgage lender. John confirmed that mortgage lenders are inversely correlated to Treasury yields.

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