The whole article as always from John Galt is superb, but just a portion to post here, read the rest at the link below

“Foreigners Send a Message: Your Debt Instruments Suck ”
~~SNIP~~
We’ve now witnessed an almost 0.30% move in less that two weeks. What do the foreigners know that the Bubbleconomists will not admit? Perhaps it is a complete and total distrust of the United States Congress and Executive branches to reign in spending? Maybe it is the realization that the Federal Reserve will print and damned to all those who save or invest in the U.S. as long as there is no sign of economic or political unrest to threaten their throne? Or maybe it is the truth seeping out into the markets that the United States is going to have to pay a substantially higher price as we pile on program after program, stimulus after stimulus and bailout after bailout like oh, you know the UNLIMITED guarantee for Fannie Mae and Freddie Mac wheeled out after the market close on Christmas Eve while most of us were enjoying egg nog, Christmas cheer and that horribly spiked punch that I swear my cat drank and drove home like a bad kitty afterward.

The real message comes from the charts:
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The 5 year and 7 year are to follow over the next two days and if anyone thinks the governors of the Federal Reserve will not be on the phones to the Primary Dealers, they are insane. There is the utmost sense of urgency to prevent a big fat FAIL like the 10 and 30 year auctions before Christmas and we are now flirting with the critical region between an outright panic move in yields to trigger a massive sell off in Treasuries as apparently Morgan Stanley is predicting. The minute we see 7.5% mortgage rates on 30 year loans we see the NRA, Obamconomists and everyone else freaking out as the proverbial “faux” housing recovery comes to a screeching halt and the next wave of defaults pile up at light speed causing further problems for the financial sector.
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http://johngaltfla.com/blog3/2009/12/29/foreigners-send-a-message-your-debt-instruments-suck/

- mcnamys

Related Posts:

• Our economy has been running on debt, not capital. Capitalism uses capital. We must now be deptitalists.
• Politics, shaky economy create no rush to restructure Fannie and Freddie
• Let’s try to take an objective view on the situation. (1929 vs 2010)
• The new economic storm could start as early as February.
• Dear bank CEOs: If your bank fails, you should go broke.

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