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Bonds and Obama-The Show That Never Ends

July 4, 2009

The Treasury recently posted a bond offering $3 billion more than expected. The difference in the size of these auctions is a lot more significant than merely $3 billion Treasury notes.

Guess what? It looks like tax revenues are less than expected, while spending is much more  than expected.

What does the market think?

Interest rates have backed up by about 15 basis points. The 10yr note is close to near a 4% level. 

 Wait, mortgage rates will move soon above 6% and stay above that level as well.

Barack’s bond  bubble is bursting under the heavy weight of all this supply and the economy faces a tougher uphill fight to stablize.

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