Get ready for a sharp curve steepening - The US Treasury has been issuing enormous amounts of bills to finance the administration's efforts, keeping the average maturity of debt low. But it's all about to change ... more - Sober Look Blog

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$80 Oil... - David Kotok - The $80 oil price is starting to worry me a little.  ... History-derived economic models show that the US consumer starts to change behavior as the price of gas approaches $3, and then goes into a more pronounced state of shock when it ranges higher, in the $3 to $4 corridor.  The reaction is to cut spending and retrench if the consumer thinks the price is going to stay at the new higher level for a while.  When the consumer thinks the price will not stay higher, he keeps on spending and buying on credit. - has interesting points - Cumberland Advisors 
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Must read - China’s Dragons: Oil, Gold, and the US Dollar - By Ron Hera - long but worth it - great charts and thoughts - Hera Research

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Jeremy Grantham: “Fair value on the S&P is 860 - Posted by Prieur du Plessis - excerpts from the Grantham’s October newsletter - Investment Postcards from Cape Town

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Alt A MBS Seen as Best PPIP Investment - Of all collateral eligible for purchase via the Public-Private Investment Program, only select Alt A mortgage-backed securities offer the yields required by funds participating in the program, according to analysts at Barclays Capital. - Inside B&C Lending

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Why sovereign bond yields will explode - By David Roche - For nearly two decades, every credit crisis has been palliated with a further wave of leverage, kicking off a new economic cycle. Can this work again? I think not. In this post-credit crisis world, some things will be permanently different.  It will not be business as usual for government bond prices. That is because current bond yields and the increasing insolvency of our rulers are the biggest disconnect in financial markets today. This comes from two factors: quantitative easing by central banks and the collapse of credit demand by the private sector. Neither are permanent features of the economic landscape. - FT.com

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Fund Manager Pellegrini Says Shorting U.S Debt ‘Attractive Bet’ - By Tomoko Yamazaki and Bernard Lo -  Paolo Pellegrini, the former Paulson & Co. hedge-fund manager who helped make more than $3 billion with bets on a U.S. housing crash, said shorting long-term U.S. debt is the “only attractive bet” for investment.  “I always like to think about assets that are likely to experience a breakdown; the only thing I’m pretty comfortable with right now is U.S. Treasury securities and U.S. agency mortgage-backed securities,” he said in a telephone interview from Beijing today. “I think that those are overpriced so they are attractive shorts.” - Bloomberg

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PIMCO's Gross: Fed programs end may pressure debt - ... "It's obvious that the programs in the United States, the Federal Reserve buyback programs ... those purchases and that purchasing power will cease within the next three to four months," Gross told CBC News Network.  "So, to the extent that that's gone, then perhaps the upward influence in terms of those longer-term Treasuries will be felt more strongly in the next several quarters." ... - Reuters