Another great concern for the long term Treasury

I talked about the possibility that we are seeing the final top of long term Treasury bonds (or bottom of the long term interest rates). To monetize this idea, I have initiated the trades via TBT and have already got some short term good profits. The most recent one was last week that I took the profit by closingTBT in anticipating a rebound of TLT. Looks like this is indeed what is happening now. While I think this is the beginning of a very long term downtrend for long term bonds, certainly it will be naïve to think this will be a straight line down. I think there are many opportunities to do swing trades with TBT/TLT. Now we have another time bomb that may trigger a landslide for Treasury.

 
Not sure if anyone has noticed that the US Congress has just done something historical with a slap on the face of Obama before his leaving: they overrode a veto by Obama and passed a law allowing families of nearly 3,000 people killed in the attacks of 9/11 to sue Saudi Arabia for damages. You may ask what’s the big deal. Well, the SA kingdom is not a small dog for the US. On the contrary, it is one of the biggest holders of the US Treasury and other assets, estimated at $700 Billion. SA has already threatened that if this law is indeed implemented, they will dump the US Treasury in retaliation. If that happens, just wait to see the avalanche crash of the long term bonds and skyrocketing interest rates. Of course no one knows for sure if this is just a rhetoric threat or something they are really seriously about. But considering the initial trend already started, I’m not sure you want to fight against it. Buying some TBT at dip is not a bad idea for a potential bombshell in the bond market. After all, there is very little chance, if any, that you can make any serious money from the long-term government bonds. The risk is simply too high!