Wednesday, March 25, 2009

Latest Treasury Auction Not Well Received

The latest auction of US Treasury securities did not go very well today. This should come as no shock to anyone, but incredibly it does come as a shock to most people on Wall Street.

This gets back to one of my main points about Wall Street - the arrogance of the people who work there. Wall Street is arrogantly assuming that no matter how massive the upcoming auctions for US Treasury securities is, there will always be ready buyers.

Wall Street assumes this because, after all, they "know" that the US is the "safest" place to invest and other such nonsense. Wall Street assumes that the "suckers", aka the foreigners, will always show up to purchase our Treasury securities.

What muddled thinking! Is it any wonder these guys have lost so much money? These Wall Street geniuses are ignoring one important fact - that because of the problems that originated on Wall Street, many countries around the globe also have major problems.

Most of major investors in these countries will simply keep their money at home and purchase their own sovereign debt in order to help their own people. It is simply common sense.

I always like to use the following analogy - Let's say that both your house and your neighbor's house is on fire with both families trapped inside. What would any logical person do?

The common sense answer is that a person would first get his own family out of their burning home and only then would help their neighbor, if possible.

However, according to Wall Street, a person would let his own family possibly burn to death in their flaming home and first race over to help his neighbors get out of their burning home before returning to his own home.

The attitude on Wall Street seems to be - "They wouldn't dare not buy our Treasuries! They'll just let their own people eat dirt. After all, we're Americans!" What sheer arrogance........

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