Wednesday, May 9, 2012

It's The Economy Stupid: Interest Rates

Okay, thanks to the politicians in Europe, Treasury securities are on a roll.  Just when you thought interest rates couldn’t get lower, they do a limbo.

How low can they go?  Well, this morning the 10-year Treasury is trading about 9 basis points from it’s all time low.  You’d have to go back to the Eisenhower presidency to duplicate current yields.

 

And remember what I told you after the first Greek ‘structured default’.  The history of defaults in South America leads one to believe that a second default was a very high probability.  Well, that probability is probably rising.

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

 

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