What will create a bubble in Treasuries? A hint is in an article from Market Watch about how hedge funds have been and are increasingly piling into the Treasury market. Those supposedly most adapt at determining opportunity in higher risk markets are settling for some degree of certainty do mainly to the horrible job they have done over the last three years and their clients insistence on no lock ups and some kind of a return.
New York Times has a piece regarding the continued difficulty in the mortgage market especially delinquencies in home equity loans. Apparently 11.1 billion in home equity loans has been written off and an additional 19.9 bill in home equity lines of credit has been swallowed by the banks. Wall Street continually pushes the notion the worst is over and share prices have already considered the bad news. But the need to have a reason to construct a bull scenario however is tough if general public obligations restrict sustained consumption in virtually all areas.
