Treasurys up; 10-year yields hit record low (1.94%)

[Roland99]

Source: MarketWatch

NEW YORK (MarketWatch) -- Treasury prices rose, pushing 10-year yields to a record low, as U.S. stock futures pointed to a much lower opening and investors seeking safety got flushed out of the Swiss franc after officials there set a floor for the currency against the euro. The main economic report of the day is the ISM's index on the services sector, due at 10 a.m. Eastern time. Yields on 10-year notes, which move inversely to prices, fell 4 basis points to 1.94%, after touching an all-time low of 1.90%. Thirty-year yields also fell for a third day. With the economy already in stall mode, "we have the hallmarks for a market that's going to, at worst, trade a low yield range for weeks or months to come," said David Ader and Ian Lyngen, bond strategists at CRT Capital Group

Read more: http://www.marketwatch.com/story/treasury-up-10-year-yields-hit-record-low-2011-09-06?dist=beforebell

[madrchsod]

1. my bank called and wants us to refinance away from an adjustable loan

right now we are paying 2.5% on 50,000 with 40,000 in equity. we are going to see what they offer for a fixed loan.

i guess they realized that are not making a penny off our loan

[On the Road]

2. S&P Looks Like Such Idiots for the Downgrade

Bond investors, who are notoriously rich and sophisticated, obviously do not agree.

[Fool Count]

3. Rich they may be, but their "sophistication" is questionable.

Piling up into US Treasuries every time there is some news of US economy doing even worse is economically absurd, to say the least.
There is no sound rationale behind this move, beside the vague perception that USG bonds are supposed to be the "safe heaven".
They are not. On the contrary, US is now the weakest link in the world economy with its government barely able to pay its debts.
It can only do so because of those 2% roll over rates, and even that just barely, having to print massive amounts of new money.
US Treasuries is the last bubble that keeps the US economy going, and when it pops, as it sure will sooner or later, those inflated
US dollars will be worth very little to ruined investors. Many of those "sophisticated" investors think that since the USG bonds are
the most liquid instrument currently, they will be able to unload them quickly at the slightest sign of trouble. But that too is wrong -
the secondary market is likely to freeze completely when the bubble bursts. Another often heard rationale for "capital preservation"
in US Treasuries is that there is no alternative to them anywhere in the world. That's ridiculous on the face of it - there is always
gold and other commodities. As well as other countries which are more fiscally responsible than the US, whose economies may
survive the next global financial crisis better, and whose currencies will continue to appreciate in terms of USD - China, Japan,
Australia, India, Brazil, Canada, the whole Asia-Pacific region. Eventually, USD is bound to lose its status of world reserve currency,
which now underwrites most of its value in terms of other currencies. US and its economy will continue to decline, eventually turning
from the world's indispensable country into just an important one - one of many. No strongest military in the world, and no most
ambitious job creation program will prevent that from happening. That's already written into the book of destiny. You can take
that to the bank.

[On the Road]

4. So You Would Consider Other Countries' Bonds a Safe Haven

or perhaps municipal or corporate bonds? Sophisticated investors disagree with you. And apparently with your predictions.

Gold is about as good an investment as it was in 1980.

[Fool Count]

6. "Sophisticated investors" can kiss my ass.

They have proven their "sophistication" so many times, it's not even funny. I am up over 50% over the last two years in Australian bonds.
Even more than that in gold. I am not selling either. USD is going down big time, everyone holding USD-denominated assets and thinking
it is a safe heaven is a damn fool who can say good-bye to his money.

[On the Road]

9. Well Australia *Is* in Somewhat Better Shape Than the US

in that they have $1.8T in GDP and only $1.2T in debt. You do realize, however, that being up over 50% in bonds means that the risk of default is considered to be *higher* than when you bought it.

[Fool Count]

10. You are wrong on both counts.

Australia's public debt to GDP ratio is 22% according to IMF. And, of course, Australian bonds are 50% higher only when priced in USD due to its
massive devaluation vs AUD over the last 2 years. There is zero probability of Australia ever defaulting. The projected budget deficit for 2011 is
whopping $7 billion and the federal budget will be in surplus in 2013. Savings bank accounts return 5% in Australia, and that is not counting
the currency exchange rate gain. 2% on a ten-year bonds? What suckers.

[plumbob]

7. Gold bugs are always humorous. They're killing India's economy right now.

It's sterile, does nothing, takes wealth out of the system.

Yes, this makes S&P look as stupid and as crooked as they actually are.

[Fool Count]

11. Too funny. India's economy grew by 8.5% in 2010-2011.

If that's "dying", there is no proper word for US' performance in English language.

[plumbob]

12. Down from 12.1% last year. Lose 4 points a year and in two years, you

have nothing.

http://m.economictimes.com/PDAET/articleshow/9864856.cms

Fascination with gold hampering India's growth story
5 Sep, 2011, 0847 hrs IST, ET Bureau

NEW DELHI: The glitter of gold is taking the shine off India’s growth story. According to World Gold Council, India’s gold imports rose 60% in April-June 2011 from a year ago, as people snapped up the timetested hedge against inflation. India has always been a huge gold consumer, but the yellow metal is now our second-biggest import, behind crude, up from fifth place in 2007-08.

But, this fascination with gold could be a reason why growth seems to be flagging. Money locked up in the yellow metal effectively disappears from the economy to become jewellery or sits idle in bank lockers. “Money spent on gold is mostly wasted because it’s only hoarded and simultaneously excluded from the financial inter-mediation system,” said Abheek Barua, chief economist, HDFC Bank.

As money has flowed into gold, India’s household savings have moved away from productive financial assets, falling to 9.7% of GDP during 2010-11 compared with 12.1% in the previous year. This shift away from financial savings can dent growth, but it’s hard to say by exactly how much.

[Fool Count]

13. That is bull. In 2009-2010 financial year India's economy grew 7.45%.

So the growth rate was over 1% higher in 2010-2011 than in 2009-2010. The data is readily available.
Obviously, you have no idea of what you are talking about.

[plumbob]

14. I supplied a link. You didn't. Who's bulling whom?

I have a degree in economics and have taught the subject over the last three decades. You?

[Fool Count]

15. Did you even read yourself what is in your link?

Where does it say that India's growth rate was ever 12%? It doesn't, because it never was. Anyone can find GDP statistics
for India. For instance here: http://www.tradingeconomics.com/india/gdp-growth
Google is your friend, Mr. Economic-Degree-Holder. Learn to read first, and then argue. I am sorry for the students you taught.
What a joke.

[high density]

5. So we are at a record low cost of borrowing but we need to be worried about spending?

What a bunch of nonsense.

[plumbob]

8. You said it.

Moronic nonsense.