Treasury Quotations | Page 3

The Treasury market is already nervous and we have data coming out that can make the market even more stressed. Some of the stress in the U.S. has been passing through the market here.

The Treasury market has come to grips with the notion that stocks have recovered,

Assume that a time machine is beaming you back to Monday morning. You start the week with the impression of an unexpectedly strong 274k US payroll report in mind. In addition, a clairvoyant tells you that: 1) US retail sales surged by 1.4% m-o-m in April, 2) German growth advanced by 4% q-o-q annualized in Q1 2005, 3) speculation about a revaluation of the Renminbi will intensify, 4) the oil price will fall by about USD 3.50 per barrel this week, 5) and the US Treasury will sell USD 51 bn in Treasury Notes. You make up your mind and conclude that in this environment yields need to go up. At least 99 out of 100 market participants with the same information would have shared your view. But reality is different. Yields are down and down and down again. These are Schwarzenegger markets, no one can beat them.

As the news this morning of increased joblessness and earlier reports of exploding deficit and debt reveal, the president's economic policy is a disaster. Obviously, the secretary of the treasury and Mr. Lindsey are being sacrificed to protect the president. Sadly, the removal of these economic officials will do nothing if they are simply replaced with yes-men committed to the president's relentlessly partisan agenda of pushing tax cuts at the expense of all else.

The world's central banks have certainly decided U.S. Treasury notes are a better long term investment than gold.

We're flying solo in the Treasury market, we're responding to the fundamentals.

Measured could go away, ... Greenspan wants the yield on the 10-year Treasury to go up because usually, long rates are not this low until late in a tightening cycle. The bond market may be underestimating how much more tightening needs to be done.

One popular explanation is that there is a glut of capital in the world in search of a home, and a lot of it finds its way into relatively risk-free assets, such as Treasury bonds.

One of the appropriation bills, the Transportation Treasury HUD Appropriation Bill, had money put into the bill at the committee level, ... When it comes out of committee once we return to session after Labor Day, we'll be passing it off the floor of the Senate. I'm confident that money will be there, plus maybe a little more if possible in the final conference committee version.

It's hard to imagine that there will be a move towards yanking that guarantee, or weakening the implied guarantee, because it just makes too much sense for the average U.S. citizen. Their benefit is they save money on the mortgage rate because of Fannie and Freddie's status, but bear the risk of either or both of these businesses going bankrupt. The odds of that are so small that the benefit, in my view, greatly outweighs the cost, and it's hard to see Congress changing that story. And Fannie and Freddie's debt is the really the cheapest form of debt outside of Treasury debt.