LBND & SBND: Turning Treasury Bonds Into Unsecured Debt

Invesco PowerShares was all set to launch a pair of new ETNs back on June 15.  When I looked into them, I found they were going to be 3x leveraged Treasury ETNs.  My initial thought was these are ridiculous products.  Who, in their right mind, would want to buy “guaranteed by the U.S. government” Treasury securities packaged as “unsecured debt obligations” of a foreign company?  The launched was pulled at the last minute.  Ah, “cooler heads have prevailed” I thought. Turns out the launch wasn’t scrapped entirely as it should have been, it was just delayed a little.  Yesterday (6/29/10), they became a reality.  Two new ETNs were listed on the NYSE:PowerShares DB 3x Long 25+ Year Treasury Bond ETN (LBND) PowerShares DB 3x Short 25+ Year Treasury …