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BILL GROSS: June 30, 2011 Will Be Viewed As America's New "D-Day" Joe Weisenthal Mar. 2, 2011, 9:58 AM In his latest note, Bill Gross wonders who will buy Treasuries when the Fed stops. We posted his chart here on that. He ends with a big conclusion: Investors should view June 30th, 2011 not as political historians view November 11th, 1918 (Armistice Day – a day of reconciliation and healing) but more like June 6th, 1944 (D-Day – a day fraught with hope for victory, but fueled with immediate uncertainty and fear as to what would happen in the short...

Confidential diplomatic cables from the U.S. embassies in Beijing and Hong Kong lay bare China's growing influence as America's largest creditor. As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms -- from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck. The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy...

Fed Holdings Of U.S. Treasuries Surpass China's by: Doug Carey February 06, 2011 A bit of recent news that hasn't gotten enough press is the fact that the Federal Reserve has surpassed China in total U.S. Treasury holdings and is now the largest holder of Treasuries in the world. As of last week, China held $896 billion of Treasuries while Japan held $877 billion. The Fed now holds $1.108 trillion and it has not even passed the halfway mark of its second round of money printing, which they call Quantitative Easing. By June the Fed could own $1.6 trillion of...

Fiscal train-wreck racing round the bend... Congressional Republicans gain the most seats in 40 years, and what we get is a trillion-dollar Porkulus II -The Sequel? At a total cost that again exceeds the entire cost of the Iraq war? Discouragingly, Curt at Flopping Aces sees the package already a done-deal... with a weaker-than-circus-lemonade GOP throwing away recently hard-won political capital to bring us more spending, pork, and class warfare. You're excused if you naively thought all this is precisely what America just massively rejected... so did I. As the GOP inexplicably caves to a weakened Obama/Reid, congressional Republicans are quick to stress that...

<p>US Treasuries suffered their biggest two-day sell-off since the collapse of Lehman Brothers, following a torrid month that has seen borrowing costs for western governments soar.</p> <p>Germany, Japan and the US have all seen their benchmark market interest rates rise by more than a quarter in the past month while the UK’s has risen by nearly a fifth.</p>

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Don't Look At What Just Happened To 30-Year Treasuries Joe Weisenthal Nov. 3, 2010, 2:28 PM Oof. Check out 30-year futures on the QE news. Turns out that buying at the long-end will be very minimal. Most is at the 2-10 year range.[snip]

Bill Gross of PIMCO has attacked quantitative easing as a "Ponzi Scheme," and charged the American public and our politicians, not Ben Bernanke, with fault. Gross writes: "The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullibles, they will just write the check themselves. I ask you: Has there ever been a Ponzi scheme so brazen? There has not. This one is so unique that it...

Any psychoanalyst looking at the behavior of investors today would see clear strains of schizophrenia in a comparison between the markets for gold and US Treasuries. Currently, the 10-year Treasury yield is setting new lows on a daily basis. In the financial models all economists were taught at school, this would be an indication of an economy with low inflation expectations and a strong currency. But the dollar has fallen over 12% since June, and the price of gold continues to hit all-time highs. These results are completely antithetical. Bonds are flashing a warning sign of deflation, while gold and...

Why The Lowest 30-Yr Fixed Mortgage Rate In History Is A Bullish Sign Scott Grannis, Calafia Beach Pundit Sep. 22, 2010, 3:51 PM Thanks to 2.5% yields on 10-yr Treasuries and the ongoing improvement in the efficiency and liquidity of the mortgage-backed securities market (which has resulted in a tightening of the spread between conforming and jumbo rates), homebuyers today can take advantage of the lowest 30-yr fixed-rate mortgages in history, whether for a conforming or a jumbo loan. One reason rates are so low is that demand for mortgage loans is also relatively low, as reflected in the above...

The World's Safe Haven Investments Are Getting Hammered Now* Vincent Fernando, CFA Sep. 3, 2010, 5:38 AM The Wall Street Journal points out that it hasn't just been U.S. treasuries that have taken it on the chin this week. Other perceived safe havens, such as U.K. or German government bonds, have also seen their prices fall (Which makes their yields rise): WSJ: And if you go back to Tuesday evening, the drop in Treasurys prices is even more pronounced: On Tuesday, prices were a lot higher, with the 10-year yield at only 2.47%. It’s not just the U.S. Investors have...

Daniel Gross, he of “bubbles are good for the economy!” fame, says not to worry about a possible bubble in U.S. Treasury bonds. Worry. Treasury bonds, Gross’s argument goes, are one classy class of asset — not like the snake-oil securities that often indicate the presence of bubbles in other markets. It’s not a bubble, he says, just “frothy.” First, one of the features about bubbles is that, toward the end of them, the people selling assets—shares in telegraph companies in the 1840s, railroad bonds in the 1880s, dotcom stocks in the 1990s, Miami condos in 2006 — are hawking...

China's Hayman declaration 30 Aug 2010 In most years something very memorable occurs at the Australian Leadership Retreat on Hayman Island. Last year the Chinese were stopped from attending because China discovered that the then Prime Minister Kevin Rudd would be in attendance. Rudd had fallen out with the Chinese leadership (Building bridges with China, September 1 2009). In 2010 Rudd was not there and the Chinese came in force and some of their messages are still ringing in my ears. By far the most dramatic was the declaration that China did not plan to buy any more US treasury...

Treasury Market Now Entering The 5th And Final Stage Of Bond Investor Grief Joe Weisenthal Aug. 22, 2010, 10:03 PM Talk of a bond market bubble may be a lot of hot air, but the incredible bull run in treasuries is undeniable. So where are we in the cycle? Nomura strategist George Concalves likens the run to the 5 stages of grief: Basically, the market has gone through five stages in this rally to lower yields: 1. UST ―Denial Rationale: At the start of the year, shorting the US Bond market was viewed as the killer trade, with investors looking...

The old saying goes that just because you're paranoid doesn't mean everyone else isn't in on it. It's starting to feel that may be true in the bond market. For years (even decades) there have been theories about collusion between America and Asia in the government bond arena. Through the 1980s and 1990s, Japan supported America by buying Treasuries. And since 2000, China has stepped into that fray. Using its trade-earned dollar holdings to invest heavily in American paper. The conspiracy camp says Asia has been brow-beaten by America into doing so. There is no sound business case for them...

Acknowledging that the recovery has slowed, the Federal Reserve announced Tuesday that it would use the proceeds from its huge mortgage-bond portfolio to buy long-term Treasury securities, The New York Times’s Sewell Chan reports from Washington. By buying government debt, the Fed is taking an unmistakable step to maintain the large amount of money that it pumped into the economy, starting in 2007, to prop up the financial and housing markets.

<p>Right now, one of the core questions perplexing markets is how U.S. treasury rates on long term debt can remain so low, even though the U.S. government continues to add more and more debt to the supply.</p> <p>The simple answer is that right now, the demand for that debt continues to outpace supply, reducing interest rates.</p>

NEW YORK, May 18 (Reuters) - U.S. Treasuries prices rose on Tuesday, with the 30-year bond rising a full point, as Germany announced it would ban some short-selling activities and Wall Street stocks turned lower. Treasury yields hit session lows after Germany's Finance Ministry announced a ban on naked short-selling at major banks. The ban would include a prohibition against naked shorting of euro government bonds. For more, click on [ID:nBAT005467] Germany did not ban all short-selling of bonds, but by banning naked short-selling -- in which a position is taken on a bond without buying or borrowing the asset...

The similarities between the subprime mortgage crisis and that of the coming collapse of the U.S. bond market are uncanny. In fact, Mark Twain may have had the U.S. debt market and the previous debt-fueled real estate crisis in mind when he said that "History does not repeat itself--but it does rhyme." The housing and credit crisis first became evident to most in 2007 with the distress in the subprime mortgage market. The foundation for the housing bubble was low interest rates, which were provided by the Fed, and passed along to consumers via commercial banks and the shadow banking...

The Market Has Exposed Its Bluff Against The Dollar And U.S. Sovereign Debt Vincent Fernando, CFA and Gregory White May. 4, 2010, 12:51 PM Despite all the beating America takes in the media for its currency and sovereign debt, investors are still fleeing out of most assets and into U.S. government bonds when markets get shaky. The 30 year treasury is rallying, sending its yield to a 2010 low at 4.46%. Moreover, U.S. inflation expectations appear relatively tame. The spread between the regular 30-year bond and the inflation protected 30-year bond is 2.64%. On a five year view, looking at...