Our Creditors Aren't Missing a Trick
Apparently, Urban Digs now has worldwide readership. While my recent piece, The Buck Has Been Passed, didn't spark very much discussion here at home. It seems our creditors overseas did notice it. According to CBS Marketwatch:
In a monetary report dated Wednesday and posted on the People's Bank of China's Web site, the central bank said the quantitative easing policy pursued by the Fed may help keep bond yields at low levels in the short term. But over a longer period, higher inflation expectations, interest rates and central bank measures to take extra liquidity out of the system could cause a sharp adjustment to bond prices, the report said. The central bank also said plans by the Fed and other central banks to drive lending rates lower by buying their own government debts risks depreciating major currencies.
Nothing gets by these guys. Me thinks Uncle Sam may have to start including a Hershey Bar or some other enticement with each T-Bill he tries to sell going forward....you know "A spoonful of sugar"..... and everything. The sell off in treasuries today was in part attributed by the media to the aforementioned report. Makes sense to me.
Posted by MeekSheep
Thu May 7th, 2009 06:22 PM
The problem is how long can you hold a treasury short position knowing that if the market falters even one iota you're going to be paying more than just the piper.
Posted by Anonymous Buyer
Thu May 7th, 2009 07:10 PM
Manhattan Condo Price Cuts
http://www.bloomberg.com/apps/news?pid=20603037&sid=aZ2FN2jxOwHQ&refer=home
Posted by Jeff
Thu May 7th, 2009 07:31 PM
Meek,
From a trading perspective it is quite an interesting conundrum. If the bond falls hard enough, higher rates will derail the housing recovery and cause a flight to safety....into bonds. Long-term though there has got to be some propensity to seek alternatives to our bonds.
Posted by lars
Thu May 7th, 2009 08:23 PM
The future on this issue is crystal clear: either rates go up or the dollar goes down. No other way out of this box.
Right now my money is on the dollar going down (and inflation going up) as I do not believe the FED/Treasury will have the balls to do the right thing.
The only open question is when...
Posted by jeff
Thu May 7th, 2009 09:09 PM
That's why i'm holding onto some gold. Interestingly, Gold has held in despite the major reversal of the "fear trade" and the bull? market in stocks. In contrast to equities Gold remains in a true bull market, trading above it's 200 day ma and consolidating nicely there.
Posted by anonymous
Fri May 8th, 2009 11:29 AM
For recent history, there has been a 4:1 ratio of New Listings to Signed Contracts. That has now been reduced to about 2:1. Given that this is the 'Busy" Spring season, shall we expect this to remain for the next 2 months, then revert back to a 3:1 or 4:1 ratio until the Fall? If so, we should expect 13,000 listings by September?
Posted by In Debt We Trust
Fri May 8th, 2009 02:49 PM
Jeff,
I like gold too but I like soybeans, corn, and wheat even more. The grain pits are easier to understand than the soap opera of US financials. Just kicking myself for cashing out yesterday instead of today.