Watching Paint Dry

Think of Treasury bills, notes and bonds this way - it is an American Express Card.  You know, the stodgy old style AMEX card that had no monthly spending limit?  The card that was issued only to doctors, lawyers, astronauts and Indian Chiefs - serious people.  The one that could be used "to infinity and beyond" because the powers that be saw no problem with it's cardholders' ability to repay any amount and would charge their clients a nominal fee for keeping the ledger straight.

Now, imagine that you as the cardholder and signatory have given your highly prized "AMEX card" to your no account sister-in-law and her equally no account son from her previous marriage and, to sweeten the deal, the son's drug addicted girlfriend because...well, just because.  You were either foolish, overly empathetic, suicidal...who knows why you gave your prized and precious "AMEX card" to those people?  "Those people" are Congress.  Congress is the party that holds the purse strings in our Republic's power structure.  I'm beginning to believe that poor old Ron Paul was out last truly serious Congressman.

Those that provide the funding on that "AMEX card" are becoming concerned.  Considering the risk that they are shouldering, they are no longer satisfied with charging only a nominal fee, particularly at the long end of the yield curve (7 years or longer).  They now want some "juice" to compensate for that growing risk.  Interest rates (represented as yield in the bond market) were far too low for far too long (thanks Bernanke and Yellen and Powell Feds!!) and far too much credit was extended to non-serious people and that will reverse course eventually.  We may be on the cusp of that correction.

In my head, John Lennon's song "Imagine" leaped to mind only in this case the lyric went:

"Imagine there's no buyer...it's easy if you try"