SDR, I know this sounds like conspiracy theory but I would not be at all surprised if the fed itself is buying 10 year treasuries. I think it is called monetizing the long end of the curve.
They could either literally print money and buy the 10 year or use short-term treasury funds which apparantly have an insatiable demand. They obviously intend to print money to buy mortage securities.
The biggest riddle to me is the 3-month at 10 basis points. I mean you can still get 2-3 percent in a ultra short term federally insured bank CD.
Another point of astonishment is the explosion of the Fed’s balance sheet. Remember when 700 billion was a lot of money? The fed is now throwing money like that around on a weekly or even a daily basis.
Obviously, the fed desparately wants to reignite the housing market. They have made it clear that they believe that is the only way out of this mess and are betting the future of this country on their ability to do so.
Desirable places like San Diego or going to benefit first and I think we are already starting to see that.
