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To: batman10023 who wrote (2886)	6/6/2012 2:26:56 PM
From: thatsnotluck	1 Recommendation Respond to of 3249

Re: Treasuries (was Two Buck Chuck...) <<who is getting hurt in your mind (on the financials) with the sharp drop in treasury yields?>> treasury yield drops not a big deal, but if spreads tighten such that other things see sharply lower rates, i think many life insurers are going to have some issues. actually given the accounting differences i think many european insurers are already feeling some stress, at least those with major U.S. operations. companies with lots of fixed pay out annuities (not sure we really have many of those on this side of the pond, more common on the other side) are an issue. ditto noncan DI (i have not looked at UNM for a very long time, but it might be of interest to someone who believes rates will remain low for an extended period). maybe some of the Canadians who have a bunch of mature term to 100 stuff? i think the real question is whether we have low rates for a few years, in which case margins get squeezed, or for long periods like Japan, in which case there are serious long term issues. a few years of low rates i do not think of as a big problem, but if rates on typical insurance company mix stay low for an extended period, watch out.

To: batman10023 who wrote (2886)	6/6/2012 2:31:08 PM
From: XoFruitCake	Read Replies (1) \| Respond to of 3249

Re: Treasuries (was Two Buck Chuck...) i guess they don't realize banks have actual or implied libor floors in a lot of their deals. I don't think bank is the concern anymore. Right now it is more transfer wealth form the saver to the debtor through low interest rate. The more money debtor get, the more they will spend and get the economy moving. The move money saver get, they will just put it in their bank account and economy will do nothing. The question is whether Fed has the tool to move long rate any more than they do? The best thing they can do now is leave everything alone and Europe will drive our rate as low as they can without Fed intervening.. When they do QE2, I think CR estimated that they lowered the long rate by 30-40 bps. Not sure they have enough fire power to do that again and Europe crisis can move long rate that much in a day.. I will bet my popcorn that there will be no QE3 for a while...