Comment on the Treasury Bust
Treasuries have been getting crushed this week. They can't afford to have rates keep rising this much.
The fed could stampede investors out of stocks and back into treasuries.
That's probably what I would do in their hopeless situation.
Getting people out of stocks would be as simple as being honest about the economy, or no longer using the credit of the US to prop up insolvent companies.
That would be doubly effective because the bailouts are one of the things that make treasuries so unattractive.
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2 comments:
Agreed, something has got to give...Brad Setser has some info on this.
The Treasury market, in a world no longer dominated by central bank reserve managers.
Governments are going to be issuing allot of paper, let's hope there are enough buyers out there.
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