I Just Sold my TBT

... in time for it to skyrocket today as Premiere Wen wondered aloud about the safety of Treasuries. I did OK on it and made a little money, but I lost out big today. That's OK with me. Here's why.

TBT is a fund that shorts the long-term Treasury bond. Essentially, if you buy TBT, you are betting that the US Government will not be able to fund it's debt without raising interest rates. That seems like a pretty good bet, given the monstrous amount of debt we will have to sell under Obama.

That's not the full story, though. TBT is dramatically affected by government policies. Unlike an industrial company like Caterpillar where you can look at financials and sales forecasts, TBT bounces around at the statements of various premieres, presidents and bankers. It's more like gambling than investing.

There is no question that at some point this year, the Federal Reserve will have to start printing money to buy Treasuries. Just the rumor of that sends TBT into the dumps. When that will happen has more to do with conversations in the meeting rooms and hallways in Peking, New York and Washington than it does with anything else. Who knows which way they're going to go? The UK recently announced that their central bank was going to start printing Pounds to buy British debt. That sent TBT into the tank. I saw that coming, but couldn't anticipate the timing.

That last event spooked me. I don't want any part of something so utterly dependent on the whims of Premiere Wen, Barack Obama, Tim Geithner and Ben Bernanke. Their motivations are hidden to us. I'm not into gambling on whether or not they woke up in a bad mood and decided to pull the trigger today, so I bailed out.