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Category Archives: Bond Market

Weekly Short Economic Stories

It finally happened. The US lost its AAA credit rating (from S&P at least) on Friday evening. It should have long since happened, but here we finally are.  What happened in the US Treasury bond market on Monday ?  Treasury prices rose.   Then on Monday, S&P extended the favor and lowered Fanny & Freddy’s rating. Rightfully so. Last week was a brutal week for […] Read the rest of this entry »

Monday August 8 2011 (morning after S&P downgrade of US debt)

Having been glued to the websites of Reuters and several others this weekend, several tactical plans were developed and disseminated to clients before Asian markets opened last night. Again, these were tactical tweaking, not strategic in nature.  As of late morning, our portfolios were solidly in the green (up nearly 1%) while the Dow flirted with a 400 point drop. No tactical tweaking needed […] Read the rest of this entry »

Weekly Short Economic Stories

• The yield on the 5-year T-note fell to 1.38% on Friday!! You’re probably thinking “so what”. Core inflation is running at 1.5% (and that’s up from where it was!). Having the 5-yr Tnote yield higher than core inflation is rare and means the bond market sees deflation over the next 5 years (or at least no inflation). The only other time this happened […] Read the rest of this entry »

(Greece) Europe’s problem child causes acrimony

What do the bailouts in Europe – and the US — have in common ?   In each case, the bailer had a great deal to lose. So in acting in its self interest, it bailed out the bailees and wanted to avoid or delay a reckoning. In Europe, those doing the bailing (bailers?) have varying degrees of financial health. Thus, as the sovereign debt issue spreads (it has and will), there are different […] Read the rest of this entry »

US debt warning from S&P

The week started with a bang.  S&P ratings agency issued a statement reaffirming US Treasury bond AAA credit rating, but they issued a negative outlook which means there’s a 1 in 3 chance of lowering the debt rating in the next 2 years. In the 70-year history of S&P, they’ve never put US sovereign debt on a negative rating watch. This is the least threatening […] Read the rest of this entry »