[Jotapay]

$this->bbcode_second_pass_quote('TheAntiDoomer', 'T')reasury Yield Surge Has Silver Lining: Pimco's McCulley

http://www.cnbc.com/id/30967890

as OF2 say's you can't have your doom and eat it too.

[Voice_du_More]

$this->bbcode_second_pass_quote('TheAntiDoomer', 'T')reasury Yield Surge Has Silver Lining: Pimco's McCulley

http://www.cnbc.com/id/30967890

as OF2 say's you can't have your doom and eat it too.

Another one, in addition to Anti-Doomer's:
http://www.cnbc.com/id/30983469
$this->bbcode_second_pass_quote('', '[')b]Pros Say: Treasury Rate Spike Signals Economic Strength
Published: Thursday, 28 May 2009
By: JeeYeon Park

Treasury Rate Jump = Economic Strength?

The jump in Treasury interest rates can be looked at as a strength in economy, said Linda Duessel of Federated Investors. She said the rates will continue to rise. “We don’t think there’s super-inflation to come at all. We’ll see more deflationary concerns coming,” she said.

[Jotapay]

Party on, Wayne.

[JJ]

$this->bbcode_second_pass_quote('Jotapay', 'P')arty on, Wayne.

[Minvaren]

Mish isn't seeing a silver lining in the recent treasury actions...

$this->bbcode_second_pass_quote('', '(')Mark Hanson @ The Field Check Group)
With respect to yesterday’s episode in the mortgage market -- yes, it is as bad as you can imagine. Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day.

[shortonoil]

Oily quoted:

$this->bbcode_second_pass_quote('', 'P')rices had been much higher earlier, reversing some of the prior session's dramatic slump that saw benchmark 10-year yields reach six-month highs, as investors again found government debt an attractive value.

[patience]

The US Treasurys yield going up is the worst news I've heard in a while. If that gets legs and runs, and I think it will, we have problems like never before.

Pay no attention to that oily man behind the curtain......

[copious.abundance]

If interest rates on Treasuries go up . . .

1A) Yes, mortgage rates will go up. But that will . . .
1B) mean fewer people will buy houses. Which means fewer people taking out mortgages. Which means fewer consumers taking on additional debt. It will also mean . . .

2A) Interest rates in general will go up. But that will mean . . .
2B) the dollar will go up. Sorry, no dollar crash/hyperinflation there! Also, if the dollar goes up . . .

3A) Oil will go down (see 2006 for example). If oil goes down = more money in people's pockets to spend on other things. Or maybe even . . .
3B) People will save more money. If more people are renting instead of owning homes (see #1) they'll probably be spending less money on housing anyway, and will probably have more discretionary income. Which will help the economy.

"You can't have your doom and eat it, too."

[patience]

OF2 said:
"2A) Interest rates in general will go up. But that will mean . . .
2B) the dollar will go up. Sorry, no dollar crash/hyperinflation there!"

Well, that would be true, IF, it were not for some other things, like what will the US Govt do when they have a problem servicing their debt, and borrowing enough to do all the cool stuff they plan on spending for this year? My bet is that they "print" (aka, "create") money in some manner, and dilute the hell out of the currency. Somebody thinks so. Silver broke out at $15.79 today. Gold is doing well, and a few other things. China seems to have taken a fancy to copper and sugar, and is raising bloody hell with Wash. DC about their monetary policy.

Everything can look dandy with tunnel vision, I suppose, but the wider view is much different.

Hey! Pssst! Oily! Wanna buy some 30 year T's at a great price? Talk to Bendover Bernanke and his pals. I'm sure they can find you such a deal on some just back from a trip to China......

[copious.abundance]

^
Silver and gold also shot up in value in the late 70's and early 80's - I'm old enough to remember that, I used to go to a coin store to cash in my coin collection for the value of the silver and buy candy with it afterwards. The yield on Treasuries also went through the roof, and Ronald Reagan began running huge deficits soon afterwards.

30 years later, the US still hasn't defaulted. Obama is running larger deficits as a percentage of GDP than Reagan did, but he's also getting a much lower yield on this debt than Reagan had to pay.

On his debt, Reagan was paying more than 10% yields for his 10-year T-bill. As I write this, Obama is paying only 3.46% for the same thing.

[shortonoil]

Oily quoted:

$this->bbcode_second_pass_quote('', '3')0 years later, the US still hasn't defaulted. Obama is running larger deficits as a percentage of GDP than Reagan did, but he's also getting a much lower yield on this debt than Reagan had to pay.

On his debt, Reagan was paying more than 10% yields for his 10-year T-bill. As I write this, Obama is paying only 3.46% for the same thing.

[AirlinePilot]

$this->bbcode_second_pass_quote('shortonoil', '
')Reagan didn’t have to monetize the debt and drive the dollar to its weakest position in a century. Foreign central banks weren’t dumping 10 and 30 year T’s like hot potatoes. He wasn’t looking at a $3 trillion deficit, and the housing and commercial real estate markets weren’t collapsing along with retail sales. Unemployment wasn’t taking out 600,000 jobs a month and we weren’t in a depression. [b]The FED wasn't buying $70 billion a month in bonds with funny money.

[kiwichick]

short on USA and EU

$US going to the basement

oil , gold , silver , water , food staples long

[kiwichick]

chinese yaun new global currency along with gold silver diamonds

[copious.abundance]

>>> Bloomberg <<<
$this->bbcode_second_pass_quote('', '[')b]Treasuries, Dollar ‘Only Game in Town’ as China Buys
By Daniel Kruger and Susanne Walker

June 1 (Bloomberg) -- For all the hand-wringing over the dollar’s slide, the expanding U.S. deficit and the nation’s AAA credit rating, the bond market shows international demand for American financial assets is as high as ever.

The Federal Reserve’s holdings of Treasuries on behalf of central banks and institutions from China to Norway rose by $68.8 billion, or 3.3 percent, in May, the third most on record, data compiled by Bloomberg show. The Treasury said bidding from foreigners was above average at its $101 billion of note auctions last week.

U.S. government securities have tumbled 4.3 percent so far this year, the worst performance since Merrill Lynch & Co. began tracking returns in 1978, as so-called bond vigilantes drove up yields to punish President Barack Obama for quadrupling the budget shortfall to $1.85 trillion. The purchases by foreigners show that, at least for now, there’s little chance of buyers abandoning the U.S. or threatening the dollar’s status as the world’s reserve currency.

“The U.S. Treasury market is the widest, deepest, most actively traded market in the world,” said Jeffrey Caughron, an associate partner in Oklahoma City at The Baker Group Ltd., which advises community banks investing $20 billion of assets. “There’s really no other game in town.”

[...]

[TheAntiDoomer]

Tony Fratto: Knocking Down the China Myth

http://www.cnbc.com/id/30997317/

$this->bbcode_second_pass_quote('', 'C')urtain-raising news reports in advance of Secretary Geithner's trip to Beijing persist in repeating this myth. Reporters can be forgiven for their error, since it was Secretary of State Clinton who gave new life to the myth during her own ill-fated trip to Beijing earlier this year when she begged the Chinese to keep buying U.S. paper.

We need to be clear about this: the Chinese do not purchase U.S Treasury securities out of altruism. And they don't buy them to blackmail American policymakers - unless American policymakers willingly and foolishly choose to be blackmailed.

China buys U.S. Treasury paper because it's in their own best, rational investment interests to do so. In short, they must.

[copious.abundance]

Another interesting week in the bond market coming up.

$35 billion 3-year auction on Tuesday
$19 billion 10-year auction on Wednesday
$11 billion 30-year auction on Thursday

[sparky]

.

It will be interesting to see if the interest spread keep on bunching up at the short end
it seems that there as been some resistance to bid for the long timed paper ,

.

[rangerone314]

When I saw the title "Treasurys are 'still the place to be'", I couldn't help but thinking of a person going into a warehouse filled with gunpowder to get out of thunderstorm and avoid getting wet.

Just not sure I want to be there when lightning strikes.