Posted on 05/27/2009 11:56:31 AM PDT by mojito
The selling in Treasurys picked up speed Wednesday afternoon, despite a well-bid five-year note sale and another round of Treasury buying from the Fed, on mortgage related selling and as investors girded themselves for more supply.
Selling kicked the 10-year note yield to a fresh high of 3.62% and forced the Treasurys benchmark yield curve, the gap between the two- and 10-year yields, to steepen out to 268 basis points from 263 basis points Tuesday as longer-term Treasurys continued to come under heavy pressure.
The afternoon's five-year note sale was a success, but nervous investors were eyeing the government's final note sale of the week with some trepidation, a $26 billion seven-year note sale on Thursday, and drove government bond prices lower ahead of that offering. Stocks were also holding on, adding further pressure to the bond market....
Investors had been worried about the five-year sale given the large auction size and the note's track record in auctions - before Wednesday, eight of the last 10 auctions saw a tail, meaning the yield on the notes came in higher than the when-issued just before the auction.
....[M]arket participants were cognizant of the week's last note auction, the seven-year sale, which could be tricky. That auction will complete the Treasurys offering this week of a total of $101 billion in new notes and bonds. On Tuesday, Treasury's sale of $40 billion in two-year notes generated strong demand.
(Excerpt) Read more at online.wsj.com ...
The Fed is printing money.
The 30 year is up over 60% from it’s low in 2009. The Obama budget’s expectations are a friggen sad joke.
how high will the interest have to get for them to be able to sell the bonds if nobody thinks they’ll be paid back?
The bond market moves in the last two days are absolutely stunning. Jaw dropping. Perhaps the biggest percentage moves ever. I thought yesterday was serious, but it continued today with extreme prejudice.
I’m waiting for that one poster to to arrive and say we can borrow and spend forever.
OKAY...on Thurs we meet with our Financial Mgr.....I’m inclined to tell him to get us ALL OUT of anything in American dollars.....all stocks, etc. We are well diversified in DFA funds.....I have a feeling my husband wil NOT agree with me.....suggestions, anyone???
When do those folks who bought treasuries in the autumn as a “flight to quality” decide to get rid of those declining treasuries? I fear this could be the beginning of a stampede.
And reassure it’s capitalism.
And reassure US (us as in us Freepers) it’s capitalism.
get as far out of the dollar as you can.
TLT has dropped 10% this month..most of it in the last week.
The dogs aren’t eating the dog food. They are looking for some red meat.
Remember, Obama “inherited” these deficits!
Nobody doubts they'll be paid back. The fear is being paid back in worthless dollars. The absurdity of the Fed buying treasuries to fund the explosive expansion of Government spending is becoming apparent to all. The emperor has no clothes.
Okay.....point me to some factual article, facts, whatever, that I can have my husband read before Thursday....he doesn’t seem to believe any more major problems are ahead....thinks this is all cyclical.....thinks I’m the “radical” worrywort.....
Not an expert. Can someone explain whether they are going to try to finance the deficit more with short-term notes now? Or are they restricted by statute to the makeup of the blend? Please use short words.
I’d tell you to buy him a copy of Crashproof by Peter Schiff and read it to him but I don’t know that we have that kind of time.
Quick facts:
Current year budget deficit: 2 trillion or over 50% of entire budget, also known as 15% of GDP. If we were a smaller country the IMF would have intervened and put us on an austerity program by now.
Ask him who is going to loan us 2 trillion a year. As him who has 2 trilllion to loan us. I think the answer is “nobody”.
if we monetize the debt and send worthless dollars by the tanker load.... if there is a next time, our bonds won’t be denomoinated in US currency because nobody on Earth would buy them. Probably gold or something after the crash.
probably have to cuz in the long term we’re all dead...
.. sorry that was Atlas Shrugged quote
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