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Dennis Gartman: Short Bonds at Your Own Peril

Wednesday, 11 Jan 2012 | 6:57 PM ET

If you’re shorting bonds, noted investor Dennis Gartman thinks you’re wrong.

“It reminds me every smart guy, every smart woman I know is short, or trying to get short on the U.S. bond market,” he said Wednesday on “Fast Money.”

That, he said, was a bad call.

Gartman's Low-Yield Treasury Play
Dennis Gartman,The Gartman Letter, discusses the direction of Treasuries, and how to play the record low yields, with the Fast Money traders.

“The trend is down in rates. The Fed is continuing to ease. They’ve told us what they’re going to do,” he said. “Everybody you know is short, and it’s just blowing up in their face.”

Rumors of France being downgraded likely helped the bond market, Gartman added.

“Stocks are going up, and bonds are going up at the same time,” he said. “This is confounding to a lot people, but just take a look at the trends. That’s indeed what’s happening here, and I think that this is going to continue for a long period of time.”

Gartman, publisher of The Gartman Letter, predicted that the market was signaling QE3, and that Europe would experience its own Lehman moment as banks lose confidence in each other.

U.S. 10-year T-notes were at 1.9 percent.

“Fast Money” pro Joe Terranova didn’t think both treasuries and equities would continue to rise.

“I think one or the other has to eventually give, and I would suspect it’ll be a rise in Treasury yields,” he said. “I don’t think you’re going to see QE3, and I do think if things are getting better it’s time for the 10-year to jump above 2 percent.”

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Trader disclosure: On Jan. 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long LQD; Terranova is long CSCO; Terranova is long AXP; Terranova is long NFLX; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long MUB; Terranova is long SU; Terranova is long EMC; Terranova is long SBUX; Terranova is long DECK; Terranova is long CSX; Terranova is long SJM; Terranova is long XOM; Terranova is long JNPR; Terranova is long PNC Feb. $60 calls; Terranova is long WFC Feb. $29 calls; Finerman owns AAPL; Finerman owns BAC; Finerman owns JPM; Finerman owns IBM; Finerman owns MSFT; Finerman owns LIZ; P. Najarian is long AAPL; P. Najarian is long BAC; P. Najarian is long C; P. Najarian is long JPM; P. Najarian is long NFLX calls; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long MSFT; J. Najarian is long WLT call spreads

Win Thin
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Dennis Gartman
Gartman long Treasuries

Gartman is long SPY

Gartman is long copper

Gartman is short Euro

Tim Armstrong
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Brian McGough
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Bonawyn Eison
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