It's Not Just Elections With Consequences

[Annie]

FT.com / Capital Markets - Supply fears start to hit Treasuries

Supply fears start to hit Treasuries
By Michael Mackenzie in New York and David Oakley in London
Published: March 26 2010 19:18 | Last updated: March 26 2010 19:18
The bond vigilantes are finally flexing their muscles. A long period of stability for the US government bond market showed signs of cracking this week as a lack of investor appetite for new debt sent the benchmark 10-year yield to its highest level since last June.

For more than a year, analysts have been warning that record sized debt sales by the US Treasury were at odds with a 10-year yield sitting comfortably below 4 per cent. This week, the yield on 10-year notes jumped from 3.65 per cent to a peak of 3.92 per cent on Thursday. On Friday it was 3.87 per cent.

Falling inflation, rising unemployment, the housing market slump, the Federal Reserve’s policies of a near zero overnight borrowing rate and its purchase of up to $1,700bn in bonds have all helped keep Treasury yields near historic lows.

But this week the mood shifted as yields for $118bn of new US debt were much higher than forecast, sparking overall selling of Treasuries. Sentiment also deteriorated in the UK bond market after the government’s budget ahead of a general election expected in May failed to resolve doubts over future spending and debt reduction...

 

[xsited1]

FT.com / Capital Markets - Supply fears start to hit Treasuries
...

Well crap. I recommend we spend lots of money we don't have and institute big government programs that will put even more strain on business.

 

[Care4all]

i sure hope banks start paying us more than 2% for our savings that they in turn use to loan credit to others at 30% interest....

Oh, and on the op....we are in a world of poopee, our entire budget will end up being our entire yearly credit payment!!!

 

[Neubarth]

FT.com / Capital Markets - Supply fears start to hit Treasuries
...

Well crap. I recommend we spend lots of money we don't have and institute big government programs that will put even more strain on business.

I have long favored doing away with public schools. Now, seeing how totally inefficient the post office is, I favor doing away totally with it. IF I thought it would be possible to outsource national defense, I'd vote for that, too. Government has proven itself to be totally inefficient every time it tries to manage anything. At times, it is EVEN MORE CORRUPT THAN THE CROOKS.

 

[xsited1]

i sure hope banks start paying us more than 2% for our savings that they in turn use to loan credit to others at 30% interest....

Oh, and on the op....we are in a world of poopee, our entire budget will end up being our entire yearly credit payment!!!

Thank goodness we have Timothy Geithner running the show.