Insiderman

Rising Treasury Yields Could Mean It's Time to Short Them

Although Treasuries represent the "risk-free" asset, they still reflect inflation fears in an increasing yield. With $4 trillion sitting in money market, the Fed will need to provide a lot of liquidity to unwind this. That, and a $1.8 trillion budget deficit will definitely cause a policy bind if they want to hold down interest rates.

The other real trick will be to prevent widening spreads when no one wants to be a debt holder after the government crams down GM and Chrysler senior obligations.

It's been bad enough to be an equity holder; now this.