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To: Trumptown who wrote (386615)	5/18/2009 7:36:15 PM
From: Real Man	Read Replies (1) \| Respond to of 436258

Mish -g-

To: Trumptown who wrote (386615)	5/19/2009 4:46:24 AM
From: Real Man	Read Replies (1) \| Respond to of 436258

Let's say the treasuries and the "risk free" rates that are directly tied to the Fed are the last standing bastion of the derivative mega bubble. The Fed buys along the whole curve now, of course, and the derivative mega-banks that got cash from the Fed follow their orders. Rates were "fixed" by enormous liquidity injections for the time being, along with the performance of the stock market. The duct tape can't hold this thing forever, but it may last for some time, up to a couple of years, as we have learned from previous duct tape experiences, and yes, this does depend on the Chinese and others willing to hold these securities. For now, not only hold, but also expand holdings. Note, however, that the net international investment position for USA is around negative 2.5 Trillion dollars, which is not a lot, considering the record current account deficit that we ran for some time. I personally think the T-bubble will break some time later this year, and maybe soon. A crash is the requirement. Have you seen this guy around lately? -g- The truth about T-bonds, sans derivatives? The World can't possibly buy what the Treasury is selling. They don't have enough trade surplus for that.