The bear market in US Treasury 30 year bonds began on December 18, 2008 with the constant three month forward futures at ~141 1/4. June futures closed today at 114 3/8. For the past 16 months the US Federal Reserve and US FNMA and FHLMC have been frantically buying up 80-90% of all market-available and new mortgages to keep mortgage rates down and thereby provide a market of some kind for new and "seasoned" housing.
This strategy is now drawing to a close as mortgage securities are paying investors little more than Treasurys of similar duration. The Fed's program is ending even as Treasury yields are rising since the bond market is factoring in the reality of US government fiscal irresponsibility and global yield pressures. In my view much of this is due to economic long wave considerations which are greater (and longer) in their effects than any local national considerations. The Treasury bond bull market lasted from 1981 to 2008 which is a normal bond bull market length of time.
Barry Habib's short discussion here is as good an explanation of what is and will be happening as any I've seen. This fits into the PIIGS R US post below.
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