US Treasuries Fall as Foreign Demand Wanes

Yield on US Treasuries advanced this week as demand for the $118B  of 2, 5 and 7 year notes was weak.  Demand from indirect bidders, the group that contains foreign central banks, and direct bidders, which includes domestic money managers both slipped.  The yield on the bench mark 10 year bond increased to 3.90% before retreating to 3.86%.  This yield is far less than the 6.3% the Greek's had to pay for their 10 year notes, but a continuation of this trend in the US may hinder recovery in the US housing market.  Many home loans are priced in relation to the 10 year paper and the recovery  is endangered by the biggest rate jump since December.

Some attribute the Greek sovereign debt crises as a catalyst for the higher rates.  In a Market Watch bond review this morning they said:


"What's changed is that investor outlooks on the fiscal side have turned decidedly more downbeat since Greece's debt woes were first splashed onto the front pages of the main papers," RBS Securities' Bill O'Donnell and Aaron Kohli said.

"The spotlight on Greece only helped to reveal that that the U.S.'s kitchen (federal and state budget balances) was itself full of cockroaches," the bond strategists wrote in a note."


Fed Chairman Bernanke, during the past year, expanded the balance sheet of the Central Bank by the purchase of agency paper from Fannie and Freddie.  If these lns were priced, mark to market, as the IRS demands, what would the new Fed balance sheet look like?

With current massive US budget deficit heading for a record of $1.6T, big bi weekly Treasury auctions will be the norm.  We wonder if the current auction is a fluke or the beginning an upward spiral in rates, as global governments compete for money to fund their deficits.  Bill Gross, the world's largest bond fund manager has expressed his views, when he told CNBC he prefers stocks over bonds.  According to
MONEYNEWS.COM he said:

"Let's suggest the economy looks good, that risk assets — whether it's high-yield bonds or whether it's stocks — have a decent return relative to the potential of declining bond prices," he said. "I'll go with the stock market."

Gross also cited "the healthcare situation and the $40 trillion worth of present value in terms of entitlements we have in the United States," he said.

"We just added in my opinion another $500 billion in terms of healthcare and the markets are beginning to look at that suspiciously."
The dollar got a boost this past week, benefiting from the chaos caused by the Euro bankers response to the Greek crises.  If the current agreement, which assigns two thirds of the bail out to the Europeans, and one third to the Washington based IMF holds, what will be the next problem that concerns currency traders.  Higher yields in the US may attract some investor interest from yield seekers, but we all know which direction bonds go if the rates work higher.  We are very cautious about the short side of the euro versus the dollar.  Not all of the debt problems are in Greece.

British Times papers to charge for Web content

It appears the day when we we'll be paying to read general interest news stories on the Web is coming sooner, rather than later--perhaps as early as June for readers of the U.K.-based Times publications.
News International, the British division of Rupert Murdoch's News Corp., announced on Friday that two of its newspapers, The Times and The Sunday Times of London, are set to begin charging readers using its sites in June.

The two papers have been offering their content in a combined news Web site called Times Online. Under the new plan, however, News International would introduce new, separate sites for each publication in May, according to several news accounts citing a company statement.

The sites will reportedly be offered for 1 pound ($1.48) for a day's access, or 2 pounds ($2.96) for a week's subscription. Those fees will cover access to both sites, which will be available for free during a trial period.
As newspapers struggle to stay alive amid declining print circulations and weak advertising revenues--only made worse by recessionary times--there's been much talk about charging users for online stories.


"At a defining moment for journalism, this is a crucial step towards making the business of news an economically exciting proposition," News International CEO Rebekah Brooks said in a broadly reported statement. She added that "This is just the start," but did not offer up details on plans for the company's two other U.K. publications.  http://newscri.be/link/1055863

The Wall Street Journal, which News Corp. acquired in 2007, is already behind a pay wall and has fared much better than some of its print-media brethren in the aftermath of the recession. The Financial Times and Newsday also charge for access and The New York Times has plans in the works to do so as well.

But the move by the British Times publications, would mark the one of the first mass-market, consumer newspapers to start charging for content. (Newsday and Le Monde in France are two that we know of.)
Meanwhile, in another move to save his business, Murdoch continues to point fingers at Google for depriving the industry of revenue by making news articles searchable for free. He plans to press legal action against the search giant if talks fail over its indexing of news content.

by Michelle Meyers  http://newscri.be/link/1055863

Steve Jobs spotted not hating Eric Schmidt

Meets ex for coffee

By Rik Myslewski in San Francisco 

The on-again, off-again relationship of Steve Jobs and Eric Schmidt may be back on again.
According to a Friday afternoon post posted from Gizmodo, the Apple and Google CEOs were spotted at a Palo Alto, California coffee shop - out front on the sidewalk, mind you - chatting over coffee. The site's tipster even snapped photos, it would appear:

Gizmodo's tipster caught this convivial scene of talkative Steve and attentive Eric

According to the tipster, Jobs did most of the talking - with one snippet of overhead conversation being the Cupertinian saying: "They're going to see it all eventually, so who cares how they get it."

We'll leave it to your imagination what the unknown antecedent to "they" might be. Users? The Federal Communications Commission? Steve and Eric's wives?

And what is "it"? Some secret Apple/Google pact? Innappropriate content banned from the iTunes App Store? Sub-rosa political communications with Sarah Palin and/or the US Tea Party movement?

Whatever that cryptic comment might mean, the entire tête-à-tête seems bizarre in the extreme. Two love-'em-or-hate-'em billionaire tech gods, in broad daylight, sipping what one can only presume to be caffè lattes at a sidewalk table outside a coffee shop - which, by the way, Gizmodo identified as being owned by former Google chef Charlie Ayers."

Why was the notoriously private Jobs baring his all-too-familiar face for the world to see at all, let alone in the company of a man with whom he allegedly can't stand? The oh-so-recognizable Jobs would attract attention if he were wrapped in a burnoose in a nargileh parlor in northern Yemen. And according to CNBC's Silicon Valley bureau chief Jim Goldman, multiple sources have told him that "Steve Jobs simply hates Eric Schmidt."
We can only assume this sighting was no accident. Jobs and Schmidt wanted to be seen together and to have reports of their parley leak out to the public at large.

And now it has. The real question isn't who are "they" and what is "it", but instead: Why do Steve and Eric want us to know they're in conversation? ®

Source: http://newscri.be/link/1055717