follow up on the Treasury sales. The debt and bond markets are VASTLY bigger than the stock markets. What habbens there is very important and is not reflected in the shiny 'happy' numbers produced by the equity markets, i.e, the index's such as DOW, NAS and SP500.
When it speaks it is telling you something
Here is an article on how much influence that market has over everything. It is from 1992
Bond prices are likely to stagnate or dip if Bill Clinton wins the presidential election Tuesday, but they could rally sharply if President Bush pulls from behind, bond traders and analysts say.
Bond prices have fallen three points and yields have risen about 30 basis points this month, partly in anticipation of a Clinton victory. The bellwether 30-year bond was yielding 7.62 percent late Friday.Bond analysts and traders assumed that Clinton was more likely than Bush to institute an inflationary stimulus package.
Inflation, the nemesis of bond investors, erodes the value of long-term investments.
Bond traders said a Clinton victory is for the most part already built into bond prices, so that prices would not dip that much if he wins. Indeed, some said prices may rise slightly if Clinton wins, as the election will end the uncertainty.
They added that recent statements by Clinton and his aides have caused them to conclude that a Clinton stimulus package need not be inflationary.
"From my point of view, Clinton has had a bad rap," said Philip Braverman, economist at DKB Securities Corp. "The feeling was he was going to be more a spender and less fiscally responsible than a close scrutiny of his policies . . . would suggest."
Further, a rumor that Clinton may appoint Paul Volcker as his Treasury secretary may have helped stabilize the market last week, some analysts said.
"The market is in awe of" Volcker, a former Federal Reserve chairman under Jimmy Carter, said Chuck Lieberman, director of financial-markets research at Chemical Securities Inc. Volcker is widely perceived as a vigilant inflation fighter well-respected internationally, Lieberman said.
Volcker's assistant at the New York investment firm of James D. Wolfensohn Inc. said he was traveling and unavailable.
But some bond-market participants are still hoping that President Bush will pull off a victory. Bond prices picked up a little last week after a CNN poll showed Clinton's lead had narrowed to 2 points.
The reason is that the bond market remains largely controlled by Republican supporters who would rather see one of their party - and especially an incumbent - return to the White House.
While investors are not enamored of Bush's economic record, "the devils we know are always easier to deal with than the devils we don't know," said Braverman.
Ross Perot should not be dismissed, market sources said. The independent candidate could push the election into the electoral college or even the Congress for a vote. That would create havoc in the financial markets, sources said, because it would prolong the uncertainty over who will govern.
In addition, the market will have to contend with a Treasury announcement on Tuesday concerning the size of the regular fall refunding, which market sources expect will be about $37 billion of three-year, 10-year and 30-year securities. A much larger number would send bond prices lower, while a smaller number would boost prices, they said.
https://www.deseretnews.com/article/257181/CLINTON-MAKES-BOND-TRADERS-WARY.html