Tags: Ross | bearish | Treasurys | bubble

Wilbur Ross: I’m Bearish on Treasurys, Bullish on Natural Gas

By    |   Friday, 06 April 2012 08:01 AM

Billionaire buyout artist Wilbur Ross believes Treasurys’ 30-year bull market is ending and that the future bodes well for natural gas.

"Over a 24- to 36-month period, we'll see the really big bubble was in 10-year Treasurys," the chairman of WL Ross & Co. tells Yahoo.

And why is the bubble bursting?

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“The Federal Reserve has announced it’ll be the end of quantitative easing,” Ross says. “That’s the only reason, plus fear of risk, that Treasurys are as high as they are.”

But now that investors are returning to the stock market and Europe’s financial crisis is abating, the fear seems to be dissipating, Ross says. “So it’s mainly the quantitative easing.”

As for natural gas, despite the recent drop of prices to a 10-year low, the long-term outlook is strong, Ross says.

“Natural gas doesn't give cancer. It's a very useful product, very cheap per BTU [British thermal unit] — much less than oil, and is less pollutive than oil or coal.”

Natural gas prices may slip a bit further. “But I think the worst part has got to be over," Ross says.

Not everyone is convinced that Europe’s bullish effect on the Treasury market is over.

“Europe is back on the front burner,” Thomas Rath, senior Treasury trader at Mitsubishi UFJ Securities USA, tells Bloomberg. “It’s one of the fears that the Fed has, that Europe could crumble and drag us down.”

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