Monday, December 28, 2009

Morgan Stanley Predicts 5.5% 10-Year Treasuries, 30 Year Mortgages at 7.5%; I'll Take the Under http://www.bloomberg.com/apps/news?pid= ... 4adQ&pos=2

David Greenlaw, chief fixed-income economist at Morgan Stanley Sees 5.5% Note as U.S. Faces Deficits.

If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.

Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said.

When you take these kinds of aggressive policy actions to prevent a depression, you have to clean up after yourself,â€