Take look at the two bonds sold today.

By Daniel at 8 October, 2009, 10:00 pm

One is ultra long called the 30 year bond where the auction went absolutely terrible, abysmal, 2.37 bid/cover. They were lucky to keep it above the minimum 2.0 bid/cover ratio.

http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/R_20091008_2.pdf

The other was an ultra short 16 day CMB where bid to cover was 6.29. Is Bernanke going to start raising interest rates with a spread in bid/cover of nearly 4.0 between ultra short and ultra long, I don’t think so unless he wants to send the US into collapse.

http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/R_20091008_1.pdf

Bernanke can’t raise rates until unemployment starts heading down significantly. Unemployment can’t start going down so long as those in the White house and congress are killing jobs.

koot