Marc Faber - Coming Next: Global Crash and U.S. Treasury Bubble Popping

Marc Faber is interviewed on Capital Account (Russia Today) by Lauren Lyster, where the talks about his views on US treasuries and capital markets, the Chinese economy and the consequences of a Chinese slowdown.


First, he explains that since 1981 were the yield was above 15%, US treasury have been in a bull market and is in bubble territory. But as with the Nasdaq in 1999, a bubble can continue inflation, and some friends of Marc Faber think 10 years trasuries will eventually yield less than 1%, and 30 years less than 2%. But his own view is that if yields increase again in markets such as the US and Japan, money will flow into equities, so he's not really worried if stock markets go down, even though he does not rule out a crash.

When asked about China, he basically says that Chinese government numbers are bogus, and when you look at Taiwan and South Korea, you'll find their exports to China are flat, and electricity consumption in China also show a weak picture of the Chinese economy.

Finally, he gives his outlook on what is happening now, and explains there is clearly a recession in Europe, the US is slowing down, but a China slowdown would be more important to the global economy, because it would have a strong impact on emerging economies. Currently Asia is certainly not in recession, but there is basically no growth.

Marc Faber appears in the first 10 minutes below, and the second part is about Libor with a zero hedge contributor.

Peter Schiff: Buying Treasuries is Like Buying Facebook

Peter Schiff is interviewed on Fox Business News on the 4th of June 2012.

He explains that the next recession (which is coming soon) will be worse than 2008. and the Federal Reserve will have to come up with QE 3 and eventually QE 4.
Interest rates are now too low, and they should be decide by the market instead of the FOMC.
He also compares current US Treasuries massive buys to the frenzy during Facebook IPO, and eventually bond investors will suffer, just as Facebook IPO investors have.

Peter Schiff: Ben Bernanke is Public Enemy No. 1

Peter Schiff is interviewed on CNBC Fast Money on the 26th of March 2012 and explains the Federal Reserve is now blowing a massive bubble in US treasury and government debt and once this pops (as interest rate must be increased due to inflation), banks will fail and the crisis will be worse than 2008/2009.

Jim Rogers: Buy Chinese Shares & Gold on Pullbacks

Jim Rogers interview on CNBC Fast Money on the 23rd of March 2012.

He said he hoped that the Chinese market collapses so he can buy (more) Chinese shares and sees a global slowdown within 1 or 2 years. He also said the would buy more and more Gold as the price falls. He would buy Gold very aggressively would it fall to the 1200-1300 USD range. He's also short US treasuries even if he admits it has not worked so well to date.

Marc Faber February 2012 Market Commentary

Marc Faber has just released his February 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "In all Investments it is a healthy Thing Now and Then to Hang a Question Mark on the Ideas we Have long Taken for Granted", implying that we should always reconsider the things we think of as obvious truth.

There is 1 attachment with this monthly market commentary (MMC) :

• "2012: A Year of Reflation and Bursting of the "Bond Bubble"" by Michael A. Gayed,Chief Investment Strategist at Pension Partners, LLC

Michael A. Gayed regularly posts articles on Seeking Alpha, I would not find recent articles related to the Bond Bubble, but he has some articles about the Reflation and the relation between treasuries and the US dollar in his "Winter Resolution of 2012" articles.

If I can find a summary, I'll post highlights of the Gloom Boom Doom market commentary a bit later.

Marc Faber on US and Europe Credit Ratings

Marc Faber interview on CNBC on Friday 13th 2012.

As France lost its AAA ratings, they discuss what could happen in the Europe, which countries could leave, which ones could stay and how it may affect the Euro. Marc Faber also said that he was not interested in buying any kind of government debt, be it French or American.

He expects the rest of the world (including Europe) to start outperforming the US markets sometimes in 2012, as the US market has better performed than most countries in 2011.

Finally, in case a further deterioration of the economy he expect massive money printing over the world and favor dividend paying high-quality companies such as Total and Novartis.

Jim Rogers and Jeremy Gratham: Bonds are a Terrible Investment

Jim Rogers recently told Fox Business Network that he plans to short US bonds in the future and to buy them now would be a “terrible mistake”.

"I am not short bonds yet but I plan to be short bonds," he said. "If the world economy gets better, you are going to make money in commodities because that is where the shortages are. If the economy does not get better, they are going to print money and when it does get better, you better own commodities, such as silver and rice."

Rogers warned it would be dangerous to own US T-bills now but admitted he had been burned a few times recently when he attempted to short the asset class.

Yesterday, GMO (Jeremy Grantham) released their 7-year forecast, and all bonds (except Emerging Debt) are expected to provide negative returns every year (on aggregate) over the next 7 year.

Here are GMO forecasts:

• US Bonds: -1% per year
• International Bonds: -2.1% per year
• Emerging Debt: 1.5% per year
  
• Index Linked Bonds: -1% per year
  
• Cash: -0.7% per year

The best 2 investments over this 7 years would be international large caps (6.4%) and emerging markets (6.5%).

Marc Faber: Equities better than Bonds

Great 30 minutes interview of Marc Faber on Bloomberg Radio on the 26th of November 2011.

They discuss about government debts, equities, gold, the global economy and politics.

Some random quotes:

• "I would rather buy Italian government debt at 7% than US treasuries at 2%".
• "The best would be to break up the Eurozone ..with local currencies and the Euro co-exisiting..."
• "You're better off investing in equities rather than in bonds or cash over the next 10 years"
• "It's beautiful, wherever you look there are problems..."
• "I'm very concerned about the slowdown in China"
• "I own some companies like Hang Seng Bank and Sun Hung Kai Properties" and he doesn't invest directly in Chinese companies.
• "I'm fully prepared to have less money over the next years" (due to higher taxes).
  
• "It's my biggest worry, that eventually we'll have war".
• "People that have deposit in the bank may lose money, who knows" in reference to MF Global and other companies that play with clients' money.
• "Nothing will be done, the entitlement will continue, the government finance will continue to deteriorate and one day the government will go bust. Before that they'll print money..."

8 Investment Ideas for 2012

2012 is coming soon, and we can start to consider some investments ides for next year.
2012 is likely to be cursed with the same problem as 2011 with western debt crisis in Europe, the US, Great Britain and possibly Japan. As now, there will be a "fight" between market forces which want to liquidate the debt and the central banks & governments who want to print money to avoid deflation at all cost. There are also talks about a debt bubble in China, but their citizen and government have savings and reserve, so although they will suffer as well, they should be OK.

We know that the US, UK and Japanese central banks have done quantitative easing, and will probably do it again, although there is political pressure not to do so. The ECB has not (officially) done quantitative easing yet. The US and UK are in the worst possible position since both their government and citizens are heavily indebted and have trade deficits. The Japanese government has a lot of debt, but has a current account surplus and not much private debt. Europeans are in the middle.

In the next few years, peak oil (and peak everything) will also have a serious impact on your investment, so I'll also give some longer term investments ideas to try to preserve capital.

Here are eight investment ideas I have for 2012 in no particular order:

1. Rice and agricultural commodities:

   I like rice for 2012 as last year, it has not performed very well and there is currently a global glut due to Indian rice production that largely offsets the issues due to the floods in south east Asia. For individuals investors, it relatively tricky to invest in Rice. For people who have access to the French stock market, you can buy RICEF PI OPENN (FR0010606509 - 1377N). Read Investing in Rice for other options and more details.

   Longer term, agricultural commodities should perform well due to rising global population, aging of farmers worldwide, reduction of arable land and possibly massive money printing by central banks.

   The good news is that there are plenty of options to invest in agricultural commodities via ETF such as DBA, RJA and ELEMENTS Rogers Intl Commodity Agri ETN (RJA), PowerShares DB Agriculture (DBA) and iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA). If you prefer agricultural stocks, you could invest in Market Vectors Agribusiness ETF (MOO)

2. Crude Oil

   This is both a short term and long term investment. Many pundits explain that today, oil costs around 70 USD per barrel to produce. For 2012, if you see crude oil (WTI) go below 70 USD, you can consider investing massively in the commodity, even though it may go much lower. In that case, production will slow considerably until prices go above 70 USD (and more) again.

   Since peak oil is inevitable and the IEA says reserves are declining by above 6% per year, so we'll have a supply problem even if the economy is in recession and demand collapses. A US military report also says that surplus may disappear in 2012, which serious shortage occurring in 2015.

   First, I'll explain how not to invest in crude oil namely United States Oil (USO), iPath S&P GSCI Crude Oil TR Index ETN (OIL) and the likes as they have an horrific decay and their target is zero after numerous reverse splits. I'm not kidding. If you invest in a commodity linked ETF always try to compare it with the tracked commodity for a period of at least 2 or 3 years. Actually, it does not hurt to do it for any ETF you plan to buy.
   

   Unless you have access to oil futures, it also difficult to invest in crude oil for individual investors and you cannot easily store the thing like you do with Gold and Silver. You invest in Crude oil (WTI and Brent) via ETF such as ELEMENTS Rogers Intl Commodity ETN (RJI) or a fund like Barclays Capital Funds - Global Commodities Deltafor Singapore/ Hong Kong investors. Those follow Jim Rogers commodity index, so they are composed of a basket of commodities and only 40% is actually invested in crude oil. If you have better alternative that do not involve buying an oil tanker, I'd appreciate.

   An alternative way to invest in commodities is to buy stocks in the middle east, for example via Market Vectors Gulf States Index ETF (MES).

3. Gold and Silver Bullion and/or Coins

   Gold and Silver have had a tremendous run for the last 10 years, but as long as we have negative real interest over the world they should perform relatively well. Having said that, an 11 year bull market, with no negative year (for Gold) is not very common, so I would not be surprised if we have 1, 2 or 3 years where Gold does nothing. I would also not be surprised, if Gold and Silver become bubbles as the central banks print money to try to save the system. You can invest in gold via GLD or PHYS ETF and silver via SLV or PSLV. PHYS and PSLV are managed by Eric Sprott, so I'd trust those more than GLD and SLV. If you are afraid of default risk by third party, then simply buy physical Gold and Silver and store them at home. If you are a US citizen and are not afraid of default by your bank, google "celente mf global".

   Finally, gold stocks are cheap relative to gold bullion on an historical basis. You can read The case for Gold Miners vs Gold and Eric Sprott: Time to Buy Gold Stocks for details. Hong Kong investors may have to make their own Gold stock portfolio, see Hong Kong Gold Mining Stocks and Gold ETFs for a list of Gold stocks in the Hang Seng.
   

4. US Natural Gas

   Over the last 5 years, US natural gas is down 39% (Source: Indexmundi) at 128.30 USD per 1000 m3 and at the same time, Russian natural gas is up 20% at 435 USD per 1000 m3 and Indonesian natural gas is up a whopping 160% at 377.22 USD per 1000 m3.
   

   Usually, commodities trade similarly over the world, but natural gas is different since it is difficult to transport. The reason for the decrease in the US is fracking, a technology breakthrough, which dramatically increased recoverable natural gas reserve in North America.
   

   This may not be an investment that rewards investors by 2012, but with such a large price difference between the US and the rest of the world, there will certainly be people who will work on liquified natural gas (LNG) and terminals are planned in the US.

   Once again commodity investing is difficult, and products such as UNG should be avoided like the plague. Actually, I could not find a proper way to invest in natural gas, except by buying natural gas stocks, please read Investing in Natural Gas for details. If you have ideas, let me know.
   

5. Short long dated US Treasury Bonds

   If has been tried unsuccessfully over the years, so the timing is uncertain, but the fact that long dated US treasuries bonds will be much higher at some point in the future is a certainty.

   The US is the worst offender in term of debt: high government debt, high private debt, low saving rate and massive trade deficits. It can't get worse than that.
   

   The federal reserve is also committed to print money to avoid deflation at all cost, this means the US dollar will lose value and investors will sell their low yielding treasury bonds (10-year to 30-year) and find assets with better value.

   If you can't short treasury bonds directly, you can invest in TBF ETF, although it decays a bit you may be able to keep it a few years, contrary to TBT or TMV. Read How to short US treasuries for more information.

6. Alternative Energies

   With peak oil and pressure against coal use due to climate change, alternative energy will have to be developed if we may to keep living a good life. Investments in solar, wind, (alternative) nuclear, cold fusion and more will be made and there will be a lot of failures, but it's likely some companies will have an amazing success. Alternative energy stocks are very depressed at those levels after the 2008 bubble.
   

   This is a long term investment (5 to 10 years) and 2012 may not be the right time, but who knows. Avoid investing directly in alternative energy stocks, as you are more likely to lose a lot of money and invest with ETF or mutual funds instead. Since we don't know which technology will prevail, I'd also avoid investing in Solar fund or Wind ETF independently, but rather find a funds that covers a broad range of alternative source. If I had a gun on my head, I'd rather invest in wind energy rather than solar energy, as the former has a better EROEI.

   Based on the comments above, you could invest in ETFs such as Market Vectors Glb Alternatve Energy ETF (GEX) or First Trust NASDAQ Cln Edge Smrt Grd Inf (GRID) as well as mutual funds such as BGF NEW ENERGY.

7. Water

   Companies related to water such as water treatment, pipes and valves manufacturers... will benefit of the water issues around the world. For example, I can feel some investments are needed in the water infrastructure in Thailand and with climate change and rising population, better water management is needed for agriculture.

   This is also a long term investment and unlikely to pay off immediatly in 2012 but you can invest with PowerShares Water Resources (PHO) and PowerShares Global Water (PIO) , read Invest in Water with ETF for details.

8. Buy the Euro
   

   This may seem counter-intuitive with all the bad press and talks about the end of the Euro, but the truth is Europe is trying to take care of its debt problem now and the ECB is reluctant to print more money to further help the indebted countries thanks to pressure from Germany.

   The US and UK central banks seem to be happy to print as needed, and the Japanese Yen seems overvalued as investors take refuge in this currency.
   So if you are a holder of US dollar, British pound or Japanese Yen you may consider buying Euros, especially if it seems the debt crisis is resolved, European government keep implementing austerity measures, private investors take their losses on bad investments and the European central bank is not involved in printing currency.

   The best way to safely (without leverage) invest in the Euro would be to open a fixed deposit in Euro if your bank/country allows it. If it is not possible, you could also invest in a currency ETF/ETN such as CurrencyShares Euro Trust (FXE) or iPath EUR/USD Exchange Rate ETN (ERO).
   

That's it for 2012 investment ideas. Do you agree with my choices? Do you have a different opinion? Please let me know in the comment section.

GMO 7 Year Asset Forecast Says Stay Away From Bonds

GMO has just released its monthly 7-year Asset Class Forecasts (November 2011).
Here are the expected annualized return (based on valuation and historical earning growth):

US Large caps: 1.8% per year
US Small caps: -0.4% per year
US High Quality: 5.4% per year
International Large caps: 5.8% per year
International Small caps: 4.6% per year
Emerging Markets: 5.6% per year

Different kinds of bonds are expected to return between -2.3% and 1.3% per year so that is all bonds are expected to return negative interests except emerging market bonds. Managed Timber is expected to return 6% per year.
Those are real returns adjusted for inflation of 2.5% per year.

You can receive GMO's forecasts (monthly) and the quarterly newsletter for free by registering at http://www.gmo.com

Market Predictions for 2012 based on Trends

Last week, I reported Bloomberg Consensus of Predictions for Year-End 2012 in Where are Markets Headed for 2012 ?

That was their average forecast:

1. S&P 500: 1,428 vs Current: 1,229
2. 10-year Treasury yield: 2.86% vs Current: 2.14%
3. Inflation rate: 2.05% vs Current: 3.9%
4. Unemployment rate: 8.7% vs Current: 9.1%
5. GDP growth in fourth quarter: 2.5% vs Second quarter, 2011: 1.3%
6. Gold price per ounce on Sept. 30, 2012: $1,835 vs Current: $1,704
7. Value of euro: $1.40 vs Current: $1.39
8. S&P/Case-Shiller 20-City Composite Home Price Index: 136.6 vs Current: 142.8
9. Barrel of oil: $95 vs Current: $92.58

Today, I'm going to do forecast for the same metrics in a "dumb" way by simply checking the trends on charts and give an estimate for each items and we'll see how it fares end of December 2012:

1. S&P 500: 1000
2. 10-Year Treasury yields: 2.5%
3. Inflation Rate: 2.5%
4. Unemployment Rate: 8.8%
5. GDP Growth Rate: 1%
6. Gold Price: 1850 USD
   
7. Euro: 1.37 US dollar
8. S&P Case-Shiller 20-City Composite Home Price Index: 135
9. Barrel of Oil (WTI): 125 US dollar

Sometimes I took the long term trend (e.g. 10 year on gold) and other times shorter trends (e.g end of 2008 to now for oil).

Where are Markets Headed for 2012 ?

Bloomberg Consensus of Predictions for Year-End 2012 (unless otherwise noted):

1. UP Standard & Poor’s 500-stock index: 1,428 Current: 1,229

2. UP 10-year Treasury yield: 2.86% Current: 2.14%

3. DOWN Inflation rate: 2.05% Current: 3.9%

4. DOWN Unemployment rate: 8.7% Current: 9.1%

5. UP GDP growth in fourth quarter: 2.5% Second quarter, 2011: 1.3%

6. UP Gold price per ounce on Sept. 30, 2012: $1,835 Current: $1,704

7. UP Value of euro: $1.40 Current: $1.39

8. DOWN S&P/Case-Shiller 20-City Composite Home Price Index: 136.6 Current: 142.8

9. UP Barrel of oil: $95 Current: $92.58

Analysts are rather optimistic, except for the Case-Shiller index.

They also don't see huge swings in the markets (they never do).

Marc Faber October 2011 Market Commentary Highlights

As I blogged on the 1st of October, Marc Faber is out with the latest issue of his famous Gloom, Boom, and Doom market commentary entitled "They are Ill Investors that think there is no Treasure Island, When They can See Nothing but a Sea of Problems".

A summary has been released by Nathaniel Crawford on Seeking Alpha:

• Stocks: Yes, stocks are very oversold, but that does not mean they cannot go lower. The dreadful price action in both Copper and the Shanghai Composite points to new lows for the equity markets. After US stocks make a new low below 1100 on the S&P 500, there could be a year-end rally followed by a more meaningful decline into 2012. Investors should use any bounce in stocks as an opportunity to reduce their equity exposure. At this point, Faber advises no more than 25% of your portfolio be in stocks.

• Gold: At $1900 gold was extremely overbought, and a correction was necessary. However, Faber now believes that gold could undergo a significant correction similar to what happened between 1974-1976, when gold fell 40%. Faber notes that a large decline in gold is now a distinct possibility. The first support level for gold is at the 200 day moving average around $1500. Despite the potential for a pullback, Faber still likes gold and believes it will trade significantly higher.

• Dollar: It's true that the dollar has no intrinsic value and is being printed into infinity, but the US dollar will be your best friend for the next few months. As global liquidity contracts on EU debt concerns and a possible hard landing in China, Faber advises investors to be long the dollar. Note this is a short-term call; longer term the dollar is going to zero.

• Treasuries: Despite being bullish on the US dollar, Faber does not recommend treasuries, noting that they are overbought and susceptible to a large correction.

• China and Copper: If you think the market is falling because of incompetent EU bureaucrats you are behind the curve. According to Faber, the price of copper is signaling a very serious slowdown (if not complete collapse) in China. This is what is really behind the move down in all commodities. A hard landing in China would be devastating for the global economy. The Shanghai composite is making new lows along with copper, which is very bearish. Also stay away from the Australian and Canadian currencies. If China crashes, these markets will get massacred.

• Emerging Markets: Stay away from these at all costs. All emerging markets are falling and making new lows. Even though Faber likes these longer term, they could still fall another 20%-30% before they would be good buys. These markets could even fall to their 2009 lows. However, this will represent a good buying opportunity because these markets will be the first to bottom.

• Short Opportunities: There is no doubt about it; shorting in this kind of manipulated market is dangerous, but if you must, here are a few ideas: Apple (APPL), Amazon (AMZN), and Salesforce.com (CRM). Only short these with very tight stops.

Marc Faber: This Looks Like a Repeat of 2008

Marc Faber is interviewed on CNBC-TV18 on the 26th of September 2011.

The environment is very similar to 2008 with financing drying up, global liquidity shrinking, assets price collapsing, but the US dollar and US government bonds are strong.

He thinks industrial commodities remain vulnerable. he sees Gold and Silver increasingly perceiving as cash. He would not hold long dated US treasuries for more than 3 weeks (except as a trader).

He would try to accumulate shares on the downside in Asia.



Although not in the video above, Marc Faber also mentioned that "We overshot on the upside when we went over $1,900," and "We're now close to bottoming at USD 1,500, and if that doesn't hold it could bottom to between USD 1,100-1,200."

Please refer to my previous blog post Is it Time to Get Back into Gold and Silver? for details about the 1200 and1500 USD levels.

Marc Faber September 2011 Market Commentary Highlights

As I blogged yesterday, Marc Faber is out with the latest issue of his famous Gloom, Boom, and Doom market commentary entitled "The Trust of the Ignorant is the Liar's most Powerful Tool".

Black Swan Insights has released a summary of Marc Faber's September 2011 report as shown below:

1. Stocks - Faber says stocks face two potential outcomes: a brief rally to between 1250-1300 on the SP 500 before another leg down (and breaching the 1101 low) or a prolonged trading range with 1100 being the low and 1300 as resistance. Faber thinks the first outcome is more likely, but this could change depending on Fed policy (aka: money printing). Another reason for Faber's bearish posture is the unfavorable seasonality of September (worst month for stocks historically). Investors who have exposure to stocks should use any bounce to sell. If you feel compelled to own stocks, Faber recommends blue-chip stocks like Pepsi and Johnson and Johnson.


2. Gold - Extremely overbought at this level. Could fall to $1500-1600 range during the correction. Faber noted the bizarre relationship between US treasuries and gold. Concludes that the people buying gold were not worried about inflation but a collapse of the entire financial system. Gold should be viewed as more of an insurance policy rather than an inflation hedge. Long-term gold is going significantly higher. Gold stocks may be the better bet than the physical metal in the short-term as they play catch up.


3. US Treasuries - After a huge, fear-inspired rally, US treasuries are extremely vulnerable to a correction. Faber notes that the Daily Sentiment Index is around 98%, indicating a possible top. Furthermore, the "dumb money," a.k.a. the retail crowd, is very bullish judging by their positioning in the Rydex inverse government bond fund. If you own Treasuries, now is time to take profits.


4. Indian Equities (Sensex) - While generally bearish on equities, Faber would advise the gradual accumulation of Indian shares, noting that they are relatively cheap and represent good value. Over a longer time frame (10 years), Faber thinks Indian stocks could appreciate 7%, which is pretty good compared to other investment options.


5. Macro - "This system has become completely corrupted and is being run for the benefit of the billionaires and banking CEO's who have control of the politicians." Faber has harsh words for Warren Buffett, noting that the investment guru profits not because of his genius, but at the expense of the American taxpayer. Buffett represents the very worst when it comes to crony capitalism. His BAC investment will likely prove very profitable, courtesy of the taxpaying middle-class and Buffett's straw man President whom he controls.

Marc Faber: Buy Stocks over Treasuries

Interview of Marc Faber on Bloomberg on the 19th of August 2011.

Dr Faber discusses whether the treasuries are in a bubble and when it could pop.

Marc Faber also explains that he believe the bear market has just started due to technicals, but if he was given no choice he would still buy stocks instead of long dated treasuries for the long term. He thinks it will be incredibly difficult to reach new highs above 1370 on the S&P.

Finally, he still expect gold to perform well in the long term (although it is above the trend line in the long term) and does not see a huge drop potential as with any drop of 150 dollars, there would be many dollars.

5 Investment Ideas by Marc Faber

Marc Faber has been interviewed by MarketWatch where he recommended 5 money moves:

1. Avoid Treasuries (10-year and 30-year)
   
2. Cash is trash
3. Stocks provide some safety
4. Emerging markets will expand over the long term
5. Hold gold to preserve wealth.
   

Read the full interview on MarketWatch.

How to short US treasuries

Many investors such as Marc Faber and Jim Rogers think the long dated treasuries (e.g. 30 Year Treasuries) are in a massive bubble and have started to short them, although some "deflationists" such as Mish Shedlock do not think the treasuries bull market are ended.

For most people, it is not possible to short treasuries directly (I can't), however it is possible to make use of the following short ETFs to do so:

• ProShares UltraShort 20+ Year Treasury (TBT)
• Direxion Daily 20+ Yr Trsy Bear 3X Shrs (TMV)

As with all short ETFs, and especially leveraged ETF such as TMV (3X) and TBT (2X), we'd better check the chart history and compare those ETFs with the 30 Year Treasuries Yields to check how bad is the decay.

First let's have a look at TBT vs 30 Year Treasury Yields (^TYX) for the 3 year period between August 2008 to August 2011 (Source Yahoo Finance):

We can see that the 30 year treasury yield fell by 20% during that period but TBT managed to fall 60% during the same time frame. Also note that 30 years treasury yields reached a low on December 2008 and have not tested this low yet, whereas TBT has.

Now let's do the same with TMV over 2 years. TBT chart is also included for reference (Green).

TMV is leveraged (3X), and as 30 years treasury yields fell 20% over two years, TMV fell by 60% which seem to match its mandate with TBT falling by 50%. However, when we check the chart more closely, we can see that when the treasury yields go up, TMV does not go up 3X over the long term, it just basically follows TBT.

To conclude both TBT and TMV can be used a trading instruments, but they would be terrible investments over the long term and should not be used to short treasuries during long time period. I would only consider investing in those products in case of treasuries buying panic, where yields go down precipitously over a short period of time.