(he said modestly)
One of these days I'll get around to a couple of "Dirty Larry" stories
From Quartz:
Wall Street analysts say Larry Summers is scaring the bond market
A slew of well-sourced Washington reporters (here, here and here) now write that former Treasury secretary Larry Summers is sitting in the catbird seat and likely to become president Barack Obama’s pick to run the US Federal Reserve after Ben Bernanke steps down, as he’s expected to do, early in 2014. Meanwhile, in the bond markets, the yields on US Treasurys are touching their highest level since 2011.
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From yesterday's "The Hard Math of Discounted Income Streams or What Will Normal Interest Rates Do To Stocks?":Coincidence? Wall Street bond watchers think not. At BNP Paribas, Julia Coronado, chief economist for North America, noted that US bond markets seem to be assuming that Summers will get the job and may be a bit more aggressive about dialing back quantitative easing, the Fed’s $85-billion-a-month bond-buying program:+Over at Morgan Stanley, bond watchers saw the same thing...MOREA nervous market began to zero in on the Fed chair succession issue at the end of the week as rumours again wafted out of Washington DC that Larry Summers is the front runner for the position. We heard from investors that the possibility is starting to get actively priced into markets and we saw online betting sites putting greater odds of Summers getting the job than [current Fed] Vice Chair [Janet] Yellen. Knowing that Summers harbours skeptical views about QE [quantitative easing], bond yields rose and stock markets fell.+
This is just a reminder.
I know our readers know this in their fingertips but sometimes one gets caught up in the details and forgets the Junior High School stuff.
Friday, the U.S. 10-year yield closed at 2.8290 up 0.0740 after touching 2.8640 a print last seen on July 29, 2011.
On July 24, 2012 the 10-year set its intraday and closing all-time record lows, 1.394 and 1.40 percent, respectively. We've doubled off the bottom.
And as recently as June 6th the bond traded at 2.00%.
I blame Larry Summers.
From MarketWatch...
