Bahh Humbugg, but I’m taken down.

friggn zero and below

They are doing this for all markets and Germany looks to be winning the race to the bottom, thus far …

I still love this bear history: It’s all relative
Zero coupon bonds have generated a return of 24% in the past year. “There is no security that we can think of that has come remotely close to matching that, risk-adjusted or not,” notes a Merrill Lynch report. 

Many U.S. institutions were the creditors of the Latin American countries, so in 1989, U.S. Treasury Secretary Nicholas Brady devised a plan to convert the Latin American bank debt into a new structure called a “Brady Bond.” Brady Bonds were U.S. Dollar denominated bonds which were collateralized by zero coupon U.S .Treasury bonds. The debtor nations would exchange their defaulted bank debt for Brady Bonds and then purchase the zero coupon bonds. The zero coupons were held in escrow by the U.S. Federal Reserve.



See yet again: In estimating net present values, the discount rate shall be the average interest rate on marketable Treasury securities of similar maturity to the cash flows of the direct loan or loan guarantee for which the estimate is being made.

Then think in terms of Treasury-backed TARP garbage that is not marketable, then continue to recall: FSP 157-3 comes on the heels of the joint guidance regarding Statement 157 that was issued by the SEC and FASB on September 30. The joint guidance was apparently intended to give companies more flexibility in valuing financial assets in inactive markets. While FSP 157-3 purports to be “consistent with and amplif[y]” that guidance, some observers believe that it does not go far enough in permitting illiquid assets to be valued by means other than the “mark-to-market” principles embodied by Statement 157.

For this reason, on October 13, the American Bankers Association sent a letter to the Securities and Exchange Commission requesting that the SEC override FSP 157-3 and “address in a more meaningful way the problems of using fair value in dysfunctional markets.”

Just saying…. and while I’m here:

As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don’t know
We don’t know.

Department of Defense news briefing
Feb. 12, 2002

Everyone say, huh?

China

D

I entered a short long interest trade about a week ago. After seeing your post and reading the analysis you linked to on the bond bubble, I had to ask myself why. It has been a good trade for a week, but that could be dumb luck.

What triggered this deflationista to bet on long interest rates even in the short run?

I was convinced by the argument that in the short/medium term that high bond prices were inconsistent with a strong dollar, and that the forces for a strong dollar remained compelling, absent continued volatility. With so many forces in play, this was a more complicated play than I am usually comfortable with. But with recent strong pressure in both treasuries and the dollar, potential mean regression was also a bonus.

I am taking seriously NDKs arguments about long interest rising in the medium term. I think it is possible to simultaneously believe in a high probability in deflation and believe in a the probability in long rates rising in the meantime.

http://changealley.blogspot.com/

…

Or maybe the ads the Googleplex serves are customized to each browser, so in that scenario only those whose overall surfing pattern suggests NSFW tastes will get NSFW ads!

google news :Satyam

-v1

$3000 billion dollars according to FT. US government rollover debt whopping $6000 BILLION dollars for this year!

This is one long train wreck and bond markets are the gasoline wagons.

US and China Must Tame Imbalances Together