US Treasury Bubble Thematic 12th January 2009

The bursting of the housing bubble helped to spark the current credit crisis; recognising that decoupling was a myth and that the global slow-down would prick the commodity bubble helped fuel one of Oil’s greatest sell-offs.

Now we face our third bubble, one within the US Treasuries market. This bubble has been formed by intense investor flight to quality and general risk aversion. We believe that this bubble is at risk, and in our view presents an excellent investment opportunity.