RobertB
February 5th, 2008, 08:06 PM
Bubble Trouble: Are Treasurys Overbid?
Tue Feb 5, 2008 3:03 PM EST
Leslie Wines
NEW YORK — Investors' raging demand for safe assets over the past six months may have created a bubble in the Treasury market — and some onlookers expect to hear a bursting sound any minute now.
A market bubble exists when asset prices are driven well above their intrinsic value, as occurred with stocks in 1999 and housing prices in many parts of the country in 2006. Often the end of a bubble is marked by disruptively sharp price declines as investors abruptly conclude assets are overvalued.
There are mixed views about whether the recent buying spree in the Treasury market has driven prices up to unjustified bubble levels. The rally, which has also sent bond yields plunging to multiyear lows, was fed first by fallout from the subprime mortgage crisis and then by growing worries about a recession.
http://www.newsvine.com/_news/2008/02/05/1280159-bubble-trouble-are-treasurys-overbid
Tue Feb 5, 2008 3:03 PM EST
Leslie Wines
NEW YORK — Investors' raging demand for safe assets over the past six months may have created a bubble in the Treasury market — and some onlookers expect to hear a bursting sound any minute now.
A market bubble exists when asset prices are driven well above their intrinsic value, as occurred with stocks in 1999 and housing prices in many parts of the country in 2006. Often the end of a bubble is marked by disruptively sharp price declines as investors abruptly conclude assets are overvalued.
There are mixed views about whether the recent buying spree in the Treasury market has driven prices up to unjustified bubble levels. The rally, which has also sent bond yields plunging to multiyear lows, was fed first by fallout from the subprime mortgage crisis and then by growing worries about a recession.
http://www.newsvine.com/_news/2008/02/05/1280159-bubble-trouble-are-treasurys-overbid