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Treasury yields soar
cnn ^ | 6/10/09 | Catherine Clifford

Posted on 06/10/2009 11:22:41 AM PDT by mathprof

Government debt prices tumble as new debt is prepped for auction and Russia says it will sell some of its holdings.

Treasury yields soared to seven-month highs Wednesday as the government prepared to sell $19 billion in 10-year notes and Russia said it would reduce its share of U.S. debt.

The benchmark 10-year note fell 17/32 to 93-16/32, and its yield surged to 3.93% from 3.86% late Tuesday. The yield was at its highest levels since settling Nov. 3 at 3.96%.

Bond prices and yields move in opposite directions.

The 2-year note dipped 1/32 to 99-4/32, and its yield rose to 1.33%. The yield on the 3-month note held steady at 0.18%.

The 30-year bond sank 1-5/32 to 92-11/32, and its yield jumped to 4.73% from 4.65%.

Earlier in the session, the yield on the longbond reached as high as 4.73%. The last time the 30-year bond settled this high was nearly a year ago on June 19, 2008, when the yield ended the session at 4.76%.

Debt sale: The government continued to sell large amounts of debt to fund the stimulus aimed at boosting the economy.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Culture/Society; Extended News; News/Current Events; Russia
KEYWORDS: debt; inflation; obama
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To: GOPJ

If I had a nickel for every time I’ve heard that, I’d have $135.67


51 posted on 06/10/2009 2:51:10 PM PDT by Vermont Lt (Ein Volk, Ein Riech, Ein Ein.)
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To: Principled
What, specifically, will happen when our debt isn't purchased by anyone? Lots of people say "it'll be bad" or whatever... but what exactly will happen?

It is happening. It's not like one day the bond sale goes fine and they sell everything they want to, and the next time, nobody buys anything at all. But we are on that trend. Maybe next time they have to offer 1/10% more than last time to sell them all, maybe after that they have to add another 1/10%, and so on.

Look at that graph of the interest rate, once it broke 3% it's gone nowhere but up. And nobody is even guessing as to where the first "pause" might be. Is it here at 4%? Would it be at 5%? 10%?

And mortgage rates will move pretty much the same amount. Maybe not the same day, maybe more in one day than they should, maybe less one day than they should, but if this 10-year note goes nowhere but up, then 30-year mortgage rates will go nowhere but up too.

And then there's inflation, because it's another SYMPTOM of too much money being printed (not an EFFECT caused by high interest rates), and job losses because it's harder to borrow money for the things that businesses normally borrow for.

52 posted on 06/10/2009 3:22:57 PM PDT by jiggyboy (Ten per cent of poll respondents are either lying or insane)
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To: Vermont Lt

LOL


53 posted on 06/10/2009 5:29:42 PM PDT by GOPJ (Nobel Prizes & Pulitzers, now only monuments to left wing bias - shame recipients.)
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To: Vermont Lt

Thank you for answering my question. CD rates are appalling right now. I was lucky enough to get 5% last September through Wash Mutual (now Chase) but that will be up in Sept. We have been using the interest to help pay for our health insurance which is $1200 a month!


54 posted on 06/10/2009 5:57:48 PM PDT by BlueAngel
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To: Mr. Lucky

You mean the “winners in life’s lottery”?


55 posted on 06/12/2009 9:28:14 PM PDT by Kozak (USA 7/4/1776 to 1/20/2009 Reqiescat in Pace)
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To: mathprof
Also, read about the Weimar Republic to see what out-of-control spending can buy you

No need to go back 80 years when Zimbabwe is there right now for everyone to see!

56 posted on 06/12/2009 9:44:15 PM PDT by Lucius Cornelius Sulla ("men of intemperate minds cannot be free. Their passions forge their fetters." -- Edmund Burke)
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To: kpp_kpp
where should i dump my liquid savings to keep up once inflation hits?

It depends on how much savings you have. I don't have a lot left because we just bought a house. I plan to spend the majority of what's left to stock up on necessities. I'm buying a couple of extra freezers to stock up on food while it's still cheep (plus plenty of canned and dry goods, of course). I don't know if gasoline is something that's allowed to be stocked up on, but if it's allowed, I intend to do so. Medicine, internet, whatever you can't live without. Buy as much up front as possible, including good bartering stuff, cigarettes, booze, ammo and whatnot. That's my plan, at least. Then I can pay down my house with my future worthless dollars as much as possible. I figure it like this --- imagine inflation is so bad that the price of a loaf of bread is 175K. I could either pay off my mortgage or buy a loaf of bread for the same amount of money. I'm exaggerating to make my point of course, but you get my drift.

57 posted on 06/13/2009 7:32:51 AM PDT by Sandy
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