“We cannot spin a positive story from the fact that a third-of-a-trillion dollars a week is trying to lock down Treasury bill yields of less that 0.05 percent,” Bianco said. “There is still tremendous demand for the front end of the curve despite the fact that people are saying things like there is no yield there and that cash is trash.”
$300 billion worth of "someones" - per week.
Let's cut the crap. The IMF has (correctly) surmised that there will be no ability - politically or fiscally - to fund another bailout.
The IMF has also (correctly) surmised that only half of the losses necessary to take have been realized, with the rest being papered over by government malfeasance, accounting chicanery and outright fraud.
Now you might try to make a case that "the worst is over" and "it will all be good, we're recovering in the economy", but to do so you have to explain where the money is going to come from to absorb the other $1.5 trillion in residential real estate loan losses along with how we're going to prevent the MBS on The Fed's balance sheet from detonating - and we haven't talked about the commercial real estate lending market yet.
Have another glass of KoolAid folks - it's grape-flavored, mixed by someone named "Jones" and tastes great!
T-bills ZERO as stocks still appreciate. This cauldron mix is toxic. Does 1938 come to anybody's mind?
“At some point reality is going to bite us in the backside,” said Michael Cheah, who manages $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. “We are living in the best of times and the worst of times. Unfortunately the best of times cannot continue celebrating like this when the economic fundamentals are worsening rapidly.”
Hang on folks, the ride gets bumpy from here.