inflation or liquidity trap or bank fears

[patb]

http://www.beaufortobserver.net/Articles-c-2010-10-25-248262.112112-Mondays-Treasury-bond-sale-of-TIPSs-should-scare-the-daylights-out-of-us.html

do the investors fear inflation?

Are investors wanting guaranteed instruments?

Are the banks afraid of a liquidity trap and
want nothing but treasuries?

what’s going on?

[ucodegen]

The article is half right in its comments. The following is wrong:

But the “glass is half empty” crowd see something much more ominous in this sale. There were not sufficient buyers to push up the demand so that yield is virtually nothing.

What really happens is that if not that many buyers to push up the demand, the yield goes up not down. That is because the issue ends up being discounted until it is sold. Higher yields would attract more buyers.

[ucodegen]

The article is half right in its comments. The following is wrong:

But the “glass is half empty” crowd see something much more ominous in this sale. There were not sufficient buyers to push up the demand so that yield is virtually nothing.

What really happens is that if not that many buyers to push up the demand, the yield goes up not down. That is because the issue ends up being discounted until it is sold. Higher yields would attract more buyers.

[ucodegen]

The article is half right in its comments. The following is wrong:

But the “glass is half empty” crowd see something much more ominous in this sale. There were not sufficient buyers to push up the demand so that yield is virtually nothing.

What really happens is that if not that many buyers to push up the demand, the yield goes up not down. That is because the issue ends up being discounted until it is sold. Higher yields would attract more buyers.

[ucodegen]

The article is half right in its comments. The following is wrong:

But the “glass is half empty” crowd see something much more ominous in this sale. There were not sufficient buyers to push up the demand so that yield is virtually nothing.

What really happens is that if not that many buyers to push up the demand, the yield goes up not down. That is because the issue ends up being discounted until it is sold. Higher yields would attract more buyers.

[ucodegen]

The article is half right in its comments. The following is wrong:

But the “glass is half empty” crowd see something much more ominous in this sale. There were not sufficient buyers to push up the demand so that yield is virtually nothing.

What really happens is that if not that many buyers to push up the demand, the yield goes up not down. That is because the issue ends up being discounted until it is sold. Higher yields would attract more buyers.

[Author]

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