Posted on 02/23/2006 11:18:59 AM PST by tmp02
This is not a good sign for stocks, is it?
..."It was a terrible auction," summed up one trader at a U.S. primary dealer. "The bid-to-cover stank, the indirect bid was bad -- I would be surprised if the market manages to rally from here."
... Worse yet, indirect bidders bought a meager $2.96 billion or 21.1 percent of the deal, compared with last year's average 38.13 percent. That left dealers holding the bag with $10.72 billion or 76.6 percent.
Signs of a tightening labor market had taken an early toll on Treasuries, with jobless claims receding to levels consistent with solid employment growth.
Claims fell by 20,000 to 278,000, when analysts had looked for a slight increase.
Given the Fed's worry that the economy is running near full capacity and could therefore generate more troublesome inflation, the data suggested the central bank will continue to tighten monetary policy.
(Excerpt) Read more at yahoo.reuters.com ...
Hello inflation, hello higher interest rate and hello housing bubble deflating...
So we're doomed?
The bid to cover on the recent 30 year auction was 2+:1, way higher than average and higher than expected.
Plenty of people wanted that debt. They always want our debt, because we service it, and we do that because we are the most productive nation on earth.
We're not doomed.. but pissing on wealthy nations like the UAE isn't encouraging. Foreign investors are big investors in US treasuries.
Isn't the yield curve inverted, making these short term notes more attractive than the long bonds?
Yes, for thw SHORT TERM!
What does this mean?
Thus if anything happens, it is bad.
"we do that because we are the most productive nation on earth.
"
With only about 10% of our economy producing anything and China producing more and more every year, that is a sort sighted view of our economic future. China has 300 million people of middle class status whose status is imprving every year.
LOL! You sound like those talking heads on TV telling us why the stock market dropped.
We have a president who has not vetored a single spending bill since he took office six years ago and a Congress that spends money wildly on idiot projects while private funds must be raised for a Veteran's hospital for our Iraq wounded. We have skyhigh oil prices and a congress that bans offshore drilling in some of the best areas for oil. We have untold trillions in future debts for entitlement programs that are almost completely unfunded and you are surprised that few foreigners want our debt?
The interesting thing is that when that 30 year debt comes due...at the current rate of inflation...it will only cost the govmint 60 cents on the dollar to pay it back on face...
Looks like the Ten Year is going retest the low again pretty soon...
So we're to grovel before despots? Please. We used to be the innovators. We use to be the inventors and science leaders. Do we think we can still lead the world being a nation of "managers" when all the technological and manufacturing base is located elsewhere?
We've mortgaged the country to foreigners. Those who hold our debt, hold our future. An economy dominated by foreign investment is a third-world economy.
Unless there is a Democrat (reads ... enemy of the U.S.A.) Party in the Whitehouse, which won't be for the forseeable future, which means you are right. ;)
Hello to the reality that you cannot borrow your way to success.
There was a guest speaker on Coast last night who said something like a seismic shift in world economic dominance is scheduled (by whom???) for about a month from now. For now we have signs, portents, and omens, maybe some entrails.
Most of the foreign debt buyers have been countries who recycle their trade surpluss...
I would rather have them hold debt than our assets...and I would rather have no debt...
All that money has to go somewhere...
That's a good time to buy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.