Re: NAT: Weak Bond Sale Jitters

In article
<4bc42ac9-18cd-4c6b-a38f-a7a10ff8ee4b@xxxxxxxxxxxxxxxxxxxxxxxxxxx>,
ScottW2 <ScottW48@xxxxxxxxxxx> wrote:

On Mar 25, 4:55 pm, MiNe 109 <smcelr...@xxxxxxxxxxxxxxxx> wrote:
In article
<0ed3232e-10b7-43d0-a9f5-47b572eba...@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,





 ScottW2 <Scott...@xxxxxxxxxxx> wrote:
On Mar 25, 4:07 pm, MiNe 109   <smcelr...@xxxxxxxxxxxxxxxx> wrote:
In article
<0cbc945f-ce0a-44c7-a30d-c51a8d920...@xxxxxxxxxxxxxxxxxxxxxxxxxxx>,

 ScottW2 <Scott...@xxxxxxxxxxx> wrote:
On Mar 25, 3:26 pm, MiNe 109   <smcelr...@xxxxxxxxxxxxxxxx> wrote:
In article
<ea3b5f3c-05ff-4546-a111-b03ddf215...@xxxxxxxxxxxxxxxxxxxxxxxxxxx>,

 ScottW2 <Scott...@xxxxxxxxxxx> wrote:
On Mar 25, 2:39 pm, MiNe 109   <smcelr...@xxxxxxxxxxxxxxxx>
wrote:
In article
<98859b90-1acc-4062-a6f0-b29877472...@xxxxxxxxxxxxxxxxxxxxxxxxxx
m>,

 ScottW <Scott...@xxxxxxxxxxx> wrote:
http://finance.yahoo.com/news/Stocks-manage-moderate-gain-apf-1
4746
65..
.

This even after the Fed disclosed plans to monetize 800B$ in
debt.

In normal economic times the US could not be selling notes at
these
prices.
Yet just a hint of spiraling interest rates due to low demand
causes
market swings.

This is the cliff you won't know you're over until you're in
freefall.

Since normal monetary policy isn't possible and banks aren't
lending,
buying debt to increase the money supply will have to do.

  You just insist on taking another step toward the edge of a
cliff
you can't see.

That hole is a four trillion dollar demand deficit. This will help
fill
it.

 Or dry up demand make the void unfillable.

More money doesn't dry up demand.

 Unsubstantiated claim.

Let's start by substantiating your claim that it does. Hint: don't
forget the word 'aggregate'.

The data is in forthcoming auctions. We're already showing signs of
declining demand and rising interest rates offset the Feds purchase.

http://online.wsj.com/article/BT-CO-20090325-715140.html

"A weak Treasury auction on Wednesday cast a pallor and raised worries
about the effectiveness of the Federal Reserve's actions to tame
rising bond yields.

It also offset the New York Federal Reserve's $7.5 billion purchase in
its first round of Treasury buyback. "

Britain already had a failed auction.

http://www.telegraph.co.uk/finance/financetopics/recession/5048575/Failed-gilt
-auction-stokes-fears-over-UK-economy.html

and with Geithner failing to realize the responsibility of his role
continues to disrupt markets with flippant comments

http://www.washingtontimes.com/news/2009/mar/26/geithner-gaffe-on-dollar-roils
-stock-bond-markets/

Short term thinking.

Explain how a bond buyer
can win with a low interest (high price) bond created by the Fed
buying short term notes?

Safety.

   ?  Do you even understand the inverse ratio on interest rate and
value?
 There is no safety in a bond bought at face value. Nothing good can
happen and much bad can.

You get your money back.

LoL, You might be forced to hold the bond to maturity for years
with no gain as the market for your security declines with rising
interest rates. Meanwhile inflation eats away and you have no good
out.

Beats stuffing it in a mattress, especially since they don't make
mattresses in billion-dollar sizes.

His market value is at higher risk and his return at maturity
diminished.
Both factors are going to discourage bond investors from
participating.

Unless they're so risk adverse they're unwilling to invest in stocks,
etc.

 They'd be better off stuffing the mattress.   China is moving to
commodity investments as an alternative.  Pop goes the price of oil.

That sounds really risky.

Not if you're really putting oil into a reserve for use later.
Oil has a far better chance of appreciating than US dollars.

Sounds like a good argument for leaving it in the ground.

Stephen
.

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