TREASURIES ARE TO ROBERT KESSLER what democracy was to Winston Churchill -- the worst possible choice, except all others.
What possible attraction could U.S. Treasury securities have to investors? In the upside-down, bad-news-is-good-news world of Treasuries, traders have bid up prices into the stratosphere, which has pushed their yields into the basement. Indeed, the two-year note's yielding a paltry 1.90% clearly shows that Treasuries are the new bubble.
Kessler has heard this many times as the peripatetic head of his eponymously named Denver-based firm that specializes in managing Treasury portfolios for the very rich and intently anonymous. That frequently takes him to the Middle East and Asia, with New York typically a stop-over coming or going to those places.
So, is a 1.90% two-year note expensive (meaning yielding too little, in bond-market parlance)? Surveying the latest wreckage in the credit market, Kessler counters, compared to what?>>>MORE