Bearish Bond thoughts....

Randall Forsyth weighs in on Wien's and Yamada's Bearish Bond Forecasts

"Consider an alternate scenario: an inflation scare as gasoline tops $4 at the pump while other commodities push up food prices. A game of chicken between Congress and the White House over a debt ceiling increase roils the Treasury market and the dollar, which is exacerbated by growing concerns about state and local finances. And with the end of QE2 in June approaching, bond yields spike higher.

But, as BCA observed, the economy isn't strong enough to sustain higher borrowing costs and sputters as a result. Recall that soaring gasoline prices hammered the economy in 2008 months before the Lehman collapse that September.

So, the real surprise would be for a first-half rise -- and peak -- in bond yields. That is what happened in 2002, 2003, 2004, 2006, 2007, 2008, 2009 and 2010, so maybe it shouldn't be a surprise if the same pattern emerges this year.

Unless, of course, if yields do manage to break out above 5.50%, Yamada's signal for the beginning of a long-term, structural bond bear market."

http://online.barrons.com/article/SB50001424052970203793504576060093853662186.html