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What do you call a 1.99% 10 yr T-bond yield?

Some people would call it an activist Federal Reserve.

 

I'd call it a depression although EW count gets 1.64% for the next stop on the downside.

 

Free money, problem is there is nothing to buy with that free money that doesn't scare folks more than the idea of entrusting it to the US (or any existing) government.

 

Looks like a nice weekend, think I'll ponder that one for a while.

 

On the other hand, they're charging fees to have deposits in Swiss Francs.

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10 Replies
BA Deere
Honored Advisor

Re: What do you call a 1.99% 10 yr T-bond yield?

QE3, so when are they going to announce QE4?  See, this is why farmland is $10,000, rent it out for $300 or $400 and you beat the 10 yr. 

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Re: What do you call a 1.99% 10 yr T-bond yield?

Well, since they are sold on the open market and "the markets always right".  It's a very strong indicator that the "market" doesnt believe we have too much debt.  Hard to belive with the crazy supply (of debt).

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Artifice
Senior Contributor

Re: What do you call a 1.99% 10 yr T-bond yield?

Knockshard- People have to be responsible for themselves and stop blaming others ands the big guys and the FED. The Fed doesn’t set the 10 yr T note rate, the mkt does. Lots if INS cos and other fiduciaries have incoming $$ daily and have to put a % in Treasuries.

The Chinese run a capital account deficit and buy em like crazy.

 

In 1981, when do you call a bond? A certificate of confiscation! Because they when down down and down. 28k in 1981 at 14.4 30 yrs = 1 million today.

 

Chinese are fools, buying 10 yr at 1.99.

 

Because a mkt is at X doesn’t mean it has any idea of what it is doing. People, INS co, the Chinese make it 1.99, not Bernake.

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Re: What do you call a 1.99% 10 yr T-bond yield?

Actually that was what I was saying.

 

The market is setting the price and it says there is big trouble.

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Re: What do you call a 1.99% 10 yr T-bond yield?

PS, don't know how "smart" equity and commodity markets are but I do know that credit markets are much smarter.

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Palouser
Senior Advisor

Re: What do you call a 1.99% 10 yr T-bond yield?

Credit markets are smarter? You must mean since the Fall of 2008. As in 'Credit Default Swaps'.And how smart is that?

 

Simply put, the consensus is that the economy isn't doing very well after the collapse of the financial house of cards on Wall St and there really can't be a large amount of inflation w/o demand for money to invest in businesses or consumer prioducts for which the consumer, blindsided once, isn't going to get in that position again, or maybe doesn't have a job due to the resulting circumstances to even have the choice. If it wasn't for the growing economies in China, India, Brazil, or until recently - Germany - we'd be in a global world of hurt.

 

Unless you want to take your chances with gold then treasuries are the safest insurance policies. Keeping it safe, by those who have bags of money, is top priority. And there are the tax breaks too, which effectively increase yields.

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Palouser
Senior Advisor

Re: What do you call a 1.99% 10 yr T-bond yield?

The Swiss are scared stiff because a strong frank that could cripple their export oriented economy.

 

Two sides of a sword. Either extreme is trouble. The US is neither, currently.

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timetippingpt
Honored Advisor

Re: What do you call a 1.99% 10 yr T-bond yield?

 Seems like the "Greatest Ponzi Scheme of All Time" to me.

 

T debt is no longer safe, nor is it a store of value.

 

The market is just responding to the MARKET MAKER'S rules. ie the MAKER (fed) has agreed to buy all the paper necessary to force rates down for the next 18 months. Not sure why anyone would want to sell into that market and thus the market drives it up.

 

Unfortunately, some day when the real world realizes the MARKET MAKER cannot honor their obligations, the Ponzi will be over, in a INSTANT.

 

The swiss are in an interesting place. Do the right thing forever and have your economy destroyed from the outside. Anyone who develops an export enterprise is always in the same place, just seldom is it obvious.

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BA Deere
Honored Advisor

Re: What do you call a 1.99% 10 yr T-bond yield?

It`d be interesting to know if the Fed is secretly buying T bills. here`s a link on how the Fed moves interest rates. http://www.martincwiner.com/how-the-fed-changes-the-interest-rate/

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