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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (42288)	4/15/2011 12:52:32 PM
From: Dr. Ipsofacto	Read Replies (1) \| Respond to of 78725

Spek, I would argue the FED would never allow a failed treasury auction to happen. Perhaps, more likely, a moderate increase in LT interest rates would occur after a sovereign default scare as the FED steps in to purchase the treasuries? Essentially... QE(n+1)? Sovereign default scare---> failed treasury auction--> sharply higher LT interest rates---> FED shows huge market to market losses on balance sheet---> Sovereign default scare FWIW, A failed treasury auction is on my watch list of things that might cause worldwide socioeconomic collapse. I might be topping off the gas tank instead of shorting financials... I'm just sayin. Dr.I

To: Spekulatius who wrote (42288)	4/18/2011 9:59:10 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78725

Hmm - a fat tail that isn't. This sort of thing happens if you are 1 Trillion $ short of your budget every year ( ~30% of the budget) Sovereign default scare---> failed treasury auction--> sharply higher LT interest rates---> FED shows huge market to market losses on balance sheet---> Sovereign default scare.... S&P revises U.S. outlook to negative reuters On Monday April 18, 2011, 9:29 am NEW YORK (Reuters) - Ratings agency Standard & Poor's revised the U.S. rating outlook to negative from stable after affirming its sovereign rating at 'AAA/A-1+' sovereign credit ratings.