Lonnie's Market Line

Treasury prices fell Thursday afternoon after the U.S. government announced another record amount of debt to be auctioned next week. The U.S. Treasury will offer $44 billion of 2 year notes, $42 billion of 5 year notes, and $32 billion of 7 year notes on consecutive days beginning Tuesday. Investors around the globe are deeply concerned the value of the existing U.S. debt they hold will deteriorate if investors begin to demand higher interest rates. Under the current administration the U.S. budget deficit has swelled to $7.41 trillion, with another $1.6 trillion to be added this year. Where does all this money get spent?

The saga of a bailout of Greece continues, and today it seems a rescue is in doubt. If the EU cannot resolve this issue we may see another flight to quality into the U.S. Treasury market. Although the quality piece of this is suspect among many investors.

Have a great weekend! If you happen to be in southern California, come on down to San Juan Capistrano (where I live) for the annual Swallows Day parade---quite a history.

http://www.thinkandask.com/news/sjc.html