Replies to post #110907 on Biotech Values

[zipjet]

T-rates dropped sharply before the QE2 purchases ever started and they have rebounded since. Such front-running is common in the treasury market.

Your claim was that QE2 was monetizing the debt - that is not true.

It is also misleading to think of QE2 as principally directed at interest rates of the treasury series. The purpose is broader.

Sorry about saying $600M when it was $600B. Mia culpa. I do the same thing with gigabytes and terabytes. Things have gotten BIG.

ij

[10nisman]

OT

The Fed's number goal was to hold rates down, so yes that is not working considering rates are up over the last month.

Where were yields before Bernanke gave the green light to QE2 back in July/August compared to today? Market's anticipated QE2 well before it was implemented. In addition, the economy appears to have improved since August, there has been an asset allocation shift from treasuries to riskier assets (equities) and thus yields have risen. Not surprising. If things continue to improve, rates will go moderately higher and the Fed can move QE2 to the sidelines. If the economy slows or shows signs of continued sluggishness, the Fed will continue QE2 helping keep yields at or below current levels. I think the move up in yields over the past month is being completely blown out of proportion.

10nis