Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Real Man who wrote (100916)	2/1/2009 10:35:27 AM
From: gregor_us	13 Recommendations Read Replies (3) \| Respond to of 110194

I conclude the FED is well aware of the crowding out effect you've been posting on this weekend--from paying interest on reserves to the huge Treasury issuance. I gather this is why they have moved to monetization of MBS. Next up of course are monetizing USTs. Since we have all lived in a Govt Bonds vs Stocks paradigm here in the West for many decades, it is inconceivable--especially to fixed income managers--that USTs are just another piece of paper that must compete for inward flows. It's government "stock". We will look back on this period two years from now, and people will realize the depth to which their head was firmly planted in the post-war paradigm, never imagining that there would come a series of events that would de-throne government bonds and put them on the same level as any other asset. This 6 month surge in USTs, regarded by many as a new paradigm and a new era and as a confirmation of how things would play out is, of course, just a 6 month event. Which ended in December. G