Posts Tagged ‘10-year Notes’

Notes From Underground: Awaiting the FOMC

September 20, 2011

The media has made the idea of a TWIST by the FED a sure thing. Okay, can’t argue with consensus, but of course that is why this blog exists: To question the thought process of the purveyors of conventional wisdom and to try to profit in a real-time world from challenging the status quo. If the FED TWISTS will the markets turn? BUT TURN TO WHAT? What will a lowering of the rate on the 10-year note do to a stalling economy with zero interest rates? Bernanke himself alluded to the BALANCE SHEET REPAIR taking place in the private sector, which was holding back consumer demand. Even though corporate balance sheets are healthy, capital investment lags as the corporations fear lackluster demand so there is no rush to create new supply.

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Notes From Underground: When Spanish Bonds are smiling, Bernanke visits Frankfurt in search of clues

November 18, 2010

The Spanish government sold $2.5 billion (€3.65) 10-YEAR NOTES at auction and Dr.Pangloss said it went well, as the average yield was 4.615 percent. Finance Minister Elena Salgado said she saw “absolutely no reason” to compare Spain’s situation with that of Ireland or Portugal. Well Madam Finance Minister, all is not well as you have 20 percent unemployment and an exploding deficit as tax revenues implode and expenditures increase. Spanish DEBT is yielding 210 basis points more than Germany. The Spanish economy is struggling and German growth is buoyant, and yet, Spain is paying more for long-term financing, there is definitely a problem. The Irish situation remained in limbo as EUROPEAN demands are being met with resistance by the politicians of the Emerald Isle. Deputy  Prime Minister Mary Coughlan said the Irish corporate tax rate was “non-negotiable.”

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