bernanke and treasury yields

Discussion in 'Trading' started by cmdtytrdr, Mar 19, 2008.

  1. if you believe that bernanke is an out of control manaic that will pull all the stops possible to avoid a short term market correction and keeps pumping liquidity into the system and lowers rates, what will be the effect on US treasuries?

    right now they're soaring as the flight to safety trade is strong, and investors expect rates to go lower. historically, treasuries have been seen as a safe haven.

    are we getting to the point where US treasuries will be seen as a risky investment. the yields seem insanely low, and im not convinced that the US, the largest debtor nation in the world by a mile, is such a great credit risk.

    does anybody else believe that US treasuries should be downgraded to BBB or junk with this maniac at the helm?

    i think if china starts selling these things could get DESTROYED. we may not be far off from that...
  2. Bernanke is trying to avoid a short-term stock market correction???

    Are you serious?

    You obviously have no clue what is going on within the commercial banking system ( the magnitude of deflation and de-leveraging), let alone how that effects the Economy.

    For the "pin-heads" on ET that believe that its ALL about the stock market and the "conspiracy" to keep it afloat, I guess the economy never enters their little pea brains.

    Funny how none of these "pin-heads" can tell me why it is that the Fed Funds rate continues to trade far above the yield on the 2-year treasury note. If Bernanke really wanted to aggressively ease, you'd see Fed Funds drop another 3/4's of a point, let alone some open-market operations that would include a "coupon-pass".

    Back in January, Fed Funds were trading 2 points ABOVE the Fed Funds rate. That's not aggressively "pumping" by any means. But only people like "Pabst" and a handful of others on ET are able to understand this.

    Has anyone on ET ever taken a basic Econ 101 class?
  3. The situation is dire. Wait until a major money center bank fails. It could be here or in europe.
  4. landis, i agree the overall economic situation is dire, and bernanke is respoding to that; but, his timing in relation to market drops is eerie.

    its not the feds job to bailout rich i bankers or aggressive mortgage bankers who took outsized risks. all bernanke is doing is prolongoing the inevitable, and probably making it worse.

    i hope he goes ahead and buys all the bad mortgages from the banks and hedge funds. then you'll see a real correction...and everyone in the world will run from the US dollar and our bonds.

    and u could use a good economics tutorial, boy. youve been long since august...thank god youre only trading a hypothetical portfolio from your dorm room
  5. Excuse me, but I am a former member of the COMEX and the NYBOT that spent 10 years in NYC as a floor trader; 7 of which was with my own capital. The other 3 years were split between working for Victor Sperandeo and Paul Tudor Jones. Long time ET poster "Pabst" can vouch for me.

    And like so many of the "kiddies" here on ET, you obviously have little understanding of the mortgage market where positions are routinely leveraged 33:1, let alone how counterparty risk works, or how important the banking system is to the growth of the U.S. Economy. You throw your temper tantrums about how Bernanke is allowing the dollar to collapse and inflate all of the commodities, but you can't even begin to answer the fact as to why Fed Funds continues to trade a full point above the yield on the 2 year treasury, or why it is most commodities are back to levels in late January when Bernanke finally started to inject liquidity into the banking system.

    You guys talk about how he has been "pumping, and pumping, and pumping" yet you have no explanation as to why Fed Funds was nearly 2 full points above the 2-year treasury back in January. If he was aggressively "easing" I can assure you that Fed Funds would be trading at/or below the yield on the 2-year.

    In my opinion, Bernanke was pretty late to the "party" and I was most critical of him for being so. But he finally "gets-it" now as opposed to all of the college "kiddies" here on ET that don't even trade for a living and have absolutely zero understanding of how money and capital markets work. Perhaps you should spend more time taking classes in Economics to understand how an economy sinks when banks have no more "good" collateral to make loans with instead of posting on ET as if you actually KNOW what you are talking about.

    Oh, and by the way . . .
    When you were about 1 year old and your Mommy was changing your diaper every night back in 1986, I was filling 300 lot orders for PTJ on the COMEX in the gold pit in #4 WTC.

    You need to grow up young man.