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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (50952)	1/23/2006 2:11:51 PM
From: shades	Respond to of 110194

DJ Treasurys Flat As Market Mulls Fed And Debt Supply . By Michael S. Derby Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--U.S. Treasury prices were essentially unchanged on the day Monday afternoon, as the market inched back from losses earlier in the session. The market had initially been under some modest pressure from buoyant stocks and softening oil prices, in a day where the one economic report on the calendar, the December leading economic indicators report from the Conference Board, had little influence on trade. Market participants tied the lethargic and ultimately stable price action to an environment where central bank monetary policy concerns and upcoming supply are limiting the room to maneuver. Adding to that, there aren't many major economic data due this week outside of the existing home sales on Wednesday, durable goods on Thursday, and the first look at the fourth-quarter gross domestic product on Friday. "It's been a little on the slow side" as the market mulls the Fed outlook and gets ready to absorb the debt issuance that's due over the next several weeks, said David Coard, head of fixed-income sales and trading with the Williams Capital Group in New York. More broadly, the slope of the government bond yield curve was on Monday afternoon reminiscent of the choppy line on the front of the cartoon character Charlie Brown's shirt: the bond yield equivalent for the three-month yield traded around a basis point over that of the 10-year note. Meanwhile, yields on two-year and 10-year notes were right on top of each other, while the three- and five-years were well under the twos and 10s. The flat curve is being driven by traders' and investors' expectation of a nearing end in the Federal Reserve's tightening cycle. At 1:45 p.m. EST (1845 GMT), the 10-year Treasury note stood at 101 4/32, up 1/32 to yield 4.36%. The 30-year Treasury was unchanged at 112 18/32, yielding 4.53%. The five-year price gained 2/32 to a 4.29% yield, while the three-year rose 1/32, yielding 4.30%, and the two-year held steady at 4.36% The session's only economic data came courtesy of the Conference Board's LEI release, a report that's aimed at predicting the economy's future direction. The December index rose by 0.1% on improved consumer sentiment, versus the revised 0.9% increase in November. Forecasters had expected to see a gain of 0.2% for December. "This month's modest gain indicates that the sharp rebound from the post-Hurricane Katrina meltdown has been completed," said Steven Wood, of forecasting firm Insight Economics. "The gentle slowing trend that had been in place for much of 2005 may have been halted, but it is too soon to tell with any confidence," he added. While the market had largely righted itself by the afternoon, market participants said upcoming supply is a negative for prices. The government will sell $10 billion in 20-year inflation protected securities Tuesday and will auction a new batch of two-year notes Wednesday. The Treasury Department will announce the size of the two-year sale at 11 a.m. EST (1600 GMT). Charles Lee, TIPS and agencies strategist at UBS in Stamford, Conn., expects the two-year sale to total $21 billion, up from $20 billion in December. "There is room to increase it more, but we anticipate only a $1 billion increment for now - especially since they opted not to increase the size of the January five-year note," he said. COUPON ISSUE PRICE CHANGE YIELD CHANGE 4 3/8% 2-year 100 1/32 unch 4.36% -0.4 BP 4 3/8% 3-year 100 6/32 up 1/32 4.30% -1.2 BP 4 1/4% 5-year 99 27/32 up 2/32 4.29% -1.2 BP 4 1/2% 10-year 101 4/32 up 1/32 4.36% -0.4 BP 5 3/8% 30-year 112 18/32 unch 4.53% +0.0 BP 2-10-Yr Yield Spread: 0 BPS Vs 0 BPS Source:TradeWeb -By Michael S. Derby; Dow Jones Newswires, 201-938-4192 michael.derby@dowjones.com (Shayna Stoyko contributed to this story) (END) Dow Jones Newswires January 23, 2006 14:03 ET (19:03 GMT)

To: Mike Johnston who wrote (50952)	1/23/2006 2:32:30 PM
From: GraceZ	Read Replies (2) \| Respond to of 110194

Your penchant for hyperbole has never ceased to amaze me. Maybe without the wealth effect of rising housing prices 10s of millions would be forced to choose between premium cable stations and standard cable!

To: Mike Johnston who wrote (50952)	1/23/2006 3:49:28 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

"After all, without housing bubble equity , tens of millions of households would be bankrupt and would have to go on food stamps" Why does Grace take such offense to that statement? It is true maybe not for many of us here. The number of folks that would face foreclosure or bankruptcy due to loss of job, marital split or even a slight decline in home prices has never been higher. Zero savings, high cost of living, negative ARM's with growing mortgage balances, adjusting monthly payments upward on ARM's, record multiple of income to housing prices, too many investment/vacation properties that are cash drains and more jobs than ever tied to housing makes it a reality.. This ain't 1966 or even 1996 today in the coastal bubble markets.. That so many can't make payments on $120k homes in places like Dallas/Ft Worth with record foreclosures already in a good job market and economy tells a lot.