Click to enlarge
Graphic
Source: FT.com

 

Excellent explanatory chart from the FT.

 

Source:
Bond Traders Take Cue to Exit Treasuries
By Michael Mackenzie and Stephen Foley
FT, June 20, 2013 4:52 pm
http://www.ft.com/intl/cms/s/0/6d98edbc-d8dd-11e2-84fa-00144feab7de.html

Category: Federal Reserve, Inflation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Following the Fed Out of Bonds?”

  1. Mike in Nola says:

    I think I’ve said something like this a few times. QE seems to drive up rates because the gullible think it’s actually going to improve the economy. I’m personally hoping BB stops QE. After the panic from those listening to all the “bond bubble” types is over, it will be another good time to buy Treasuries. It may be that the panic is happening now, the threat being greater than the execution.

    I’m talking Treasuries, not the crap that’s been peddled to the yield-seekers. Those are in a bubble that will likely pop as the worthless issuers run into trouble.

  2. Pantmaker says:

    Ha! This made me laugh out loud. This is related to the money on the sidelines meme. Someone has to hold bonds at all times. There is no humane shelter for homeless bonds. There might come a day (possibly soon) when people realize the interest they are earning on their treasuries isn’t worth the significant risk to principal and the prices will fall as they seek buyers at lower prices/higher returns. Loads of retirees are stuffed into (safe) bond funds and as the quarterly reports are mailed and they notice the erosion of their account balances the process will accelerate.