[fjon]

Originally Posted by TropicCat

A while back I presented my case why interest rates would go up this year. I predicted it would happen in March.

Two things have occurred this morning which are notable:

1.) Bernanke is announcing an end to zero discount rates
U.S. Stocks Retreat as Bernanke Prepares to Raise Discount Rate - Bloomberg.com

2.) The Chinese said that's enough for them. Inner Workings » Blog Archive » China Dumps US Asset Backeds and Corporates



It is now official Chinese Policy to dump any American bond not guaranteed by the US Government.

So... how do you recover from a recession by raising interest rates?

Our "Recovery" is officially over.

Thanks for that AsiaTimes blogpost. I was wondering what was causing big cap bonds to take such a pounding.



The 10 yr Treasury auction of $25B was sour today as well, but I figure that is a bit of contagion spilling over from the Greece fire in Europe as everyone is looking now for more compensation for default risk. Let's see if spreads begin to blow out again ala '08.

I think schlock markets are in the next wave down now, and if that is correct, the dollar should continue strengthening as debt get extinguished, and I had thought treasuries would gain in price in a flight to safety. But wtfk as this point. Markets are about as stable as a teenage bi-polar on acid.