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

To: GST who wrote (96672)	8/26/2008 4:46:23 PM
From: NOW	Read Replies (2) \| Respond to of 110194

please provide a smidgen of evidence for this idea:Over the last decade an investment in US treasuries would have been far inferior to many other less risky investments. A short in them would have been a disaster. you seemed to be suggesting as far back as 2006 that that was the logical thing to do.

To: GST who wrote (96672)	8/27/2008 12:14:37 AM
From: gregor_us	Read Replies (3) \| Respond to of 110194

Here' some more "dollar positive" news. I think it will be amusing when the FED cuts again, which I think will happen before the end of Q1 2009. Still, it will probably take some time before any repudiation by investors victimizes Treasuries. Long Treasuries is a trap of course, because it's sucking up all the safety trades and creating a positive feedback loop--while at the same time the foundation rots away. But I think it can go on for a bit, though, as the FED gets close to cutting again, some problems will develop for the foreign investor in Treasuries. Even some of these may perversely decide to take the forex loss on the USD, just to be parked in "safety." Looks to me however that it doesn't all reverse until things get stretched even further. As in, lots more issuance from Treasury, lots more buying of Treasuries, and a lower USD. In the short-term, let's see how Dollar bulls and treasuries bulls react to the story below. _______________________________________________ FDIC Weighs Tapping Treasury as Funds Run Low Short-Term Loans Might Be Needed After a Bank Failure By DAMIAN PALETTA and JESSICA HOLZER August 27, 2008 WASHINGTON -- Federal Deposit Insurance Corp. Chairman Sheila Bair said Tuesday her agency might have to borrow money from the Treasury Department to see it through an expected wave of bank failures. Ms. Bair said the borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank. The borrowed money would be repaid once the assets of that failed bank are sold. The last time the FDIC borrowed funds from Treasury came at the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered. That the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis.