We keep hearing that long term Treasury Bonds are going to tank and that we need to get short before they fall off a cliff.  While this may very well happen, we doubt that it occurs anytime soon.  We are not alone in this view as Bill Gross and the gang at PIMCO seem to agree.  While some argue with his view of a new slow growth period the market does not seem to have an issue with it.  Not only has Helicopter Ben said that the Fed is not raising rates anytime soon, but market indicators are saying the same thing.

One Treasury indicator that we use is the MOVE index which is a  “yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of volatilities on the CT2, CT5, CT10, and CT30.”  As you can see in the chart below it

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Commonly seen as a move countering rival Hewlett Packard's (HPQ) acquisition of EDS back in May, this morning Dell, Inc. (DELL) announced it will buy Perot Systems (PER) for $3.9 billion -- $30 per share of Class A common stock. Perot Systems was founded by former presidential candidate Ross Perot in 1988; Perot founded EDS a quarter-century earlier. The price tag amounts to a 68% premium in PER shares from Friday's close, and today the stock is trading accordingly -- up nearly $12 per share so far this morning. As for DELL shares, the tech giant is down over 5% at this point today, perhaps on concerns about the price and/or the nuts and bolts of implementing Perot Systems into Dell's technology services group. It had been increasingly clear that Dell would need to make some sort of move to stay competitive with global ...

If over the past six months or so it has seemed as if you were partying like it was 1999 it might be time to reevaluate your stance.  One thing that we have been taking a closer look at lately is the pricing of risk.  Obviously when investors think that risks are low they will demonstrate risk seeking behavior.  We have seen this as the SP500 has climbed 56.6% from the March lows to the highs on 8/28/09.  With a rise like that you would think that 2008 never happened, of course if you believe that then you also believe  in a land of make believe with money trees, the fountain of youth, and SI models for all of us.

Of course some investors counter saying that while things could be better we are seeing the beginning of a recovery.  They then say that while the market will likely climb slower,

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The real estate market continues to be difficult and credit markets did not improve much in 2009. The adverse environment continues to affect Move (MOVE), which provides a wide range of real estate services through a family of websites.

The ongoing global financial crisis affecting the banking system and financial markets has resulted in a severe tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in credit and equity markets. This in turn has affected other industries in the economy. The U.S. residential real estate market is currently going through a significant downturn due to downward pressure on housing prices, credit constraints inhibiting home buyers and an exceptionally large inventory of unsold homes. This is the worst crisis that the industry has faced in decades and there seems to be no turnaround in the near future.

Amidst

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Cypress Bioscience: Poised for Major Move on Pending Phase 3 Results and FDA Decision Since I last wrote about Cypress Bioscience (CYPB) two months ago, the stock has moved lower with the Company now trading even closer to its net cash position of $4 per share with a closing price on Friday of $6.43 per share. The level of short interest has remained steady this year and is still high at 6.6 million shares compared to a float of about 32 million shares and average volume that is just over 300,000 shares per day. Most of the options action in Cypress Bio is focused on December (12/20/08 expiration) with an open interest in the 10.00 calls exceeding 16,500 contracts versus ...

Cypress Bioscience: Poised for Major Move on Pending Phase 3 Results and FDA Decision Since I last wrote about Cypress Bioscience (CYPB) two months ago, the stock has moved lower with the Company now trading even closer to its net cash position of $4 per share with a closing price on Friday of $6.43 per share. The level of short interest has remained steady this year and is still high at 6.6 million shares compared to a float of about 32 million shares and average volume that is just over 300,000 shares per day. Most of the options action in Cypress Bio is focused on December (12/20/08 expiration) with an open interest in the 10.00 calls exceeding 16,500 contracts versus ...