{"id":482422,"date":"2010-03-28T15:19:00","date_gmt":"2010-03-28T19:19:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/three-must-read-items-on-last-weeks-treasury-market-mauling-2010-3"},"modified":"2010-03-28T15:19:00","modified_gmt":"2010-03-28T19:19:00","slug":"three-must-read-items-on-last-weeks-treasury-market-mauling","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/482422","title":{"rendered":"Three Must-Read Items On Last Week&#8217;s Treasury Market Mauling"},"content":{"rendered":"<p>While the stock market is off doing its own thing (rising, mostly) the real story is playing out in the bond market, which saw its work week in a year last week.<\/p>\n<p>What does it all mean? Obviously there&#8217;s no agreement.<\/p>\n<p>Here are three excellent reads on the subject:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.fivethirtyeight.com\/2010\/03\/what-is-bond-market-telling-us.html\">Over at FiveThirtyEight.com<\/a> an argument that the bond selloff is basically a positive sign &#8212; investors are increasing their risk appetite, mostly.<\/li>\n<li><a href=\"http:\/\/www.interfluidity.com\/v2\/603.html\">Steve Randy Waldman<\/a> at Interfluidity also has a thorough analysis, and notes the following chart, which shows that two different yield spreads 2Y\/10Y and 3M\/30Y are both right near historical all-time highs, but, haven&#8217;t yet quite broken beyond historical ranges.<\/li>\n<\/ul>\n<p style=\"padding-left: 30px;\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4bafaae47f8b9aa704f50700-550-330\/chart.png\" border=\"0\" alt=\"chart\" width=\"550\" height=\"330\" \/><\/p>\n<ul>\n<li><a href=\"http:\/\/blog.atimes.net\/?p=1415\">And over at Asia Timese<\/a>, David P. Goldman ponders the connection between the bond selloff the bizarrely low savings rate, and the deficit.<\/li>\n<\/ul>\n<p style=\"padding-left: 90px;\"><em> If the 10-year Treasury yield pops up by 100 to 200 basis points or so, households will shift out of consumption into savings.<\/em><\/p>\n<p style=\"padding-left: 90px;\"><em>If half of the deficit were to be financed by a rise in savings, the savings rate would jump to 10%, that is, by six percentage points, and consumption would fall by 6 percentage points of GDP. So much for the recovery.<\/em><\/p>\n<p style=\"padding-left: 90px;\"><em>The Fed will keep the game going as long as it can, but it seems unlikely that investors will play along indefinitely. Last one out of the Treasury market is a rotten egg.<\/em><\/p>\n<ul>\n<li><strong>Added:<\/strong> <a href=\"http:\/\/www.econbrowser.com\/archives\/2010\/03\/interest_rates.html\">James Hamilton of EconBrowser<\/a> also weighs in and is worth your read. His point, basically is that rising bond yields combined with rising equities is usually a sign of optimism.<em><br \/><\/em><\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.businessinsider.com\/three-must-read-items-on-last-weeks-treasury-market-mauling-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/7mzIz-GOYCc\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While the stock market is off doing its own thing (rising, mostly) the real story is playing out in the bond market, which saw its work week in a year last week. What does it all mean? Obviously there&#8217;s no agreement. Here are three excellent reads on the subject: Over at FiveThirtyEight.com an argument that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-482422","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/482422","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=482422"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/482422\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=482422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=482422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=482422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}