August 15, 2011, 10:41 AM ET.

Treasurys: Once Upon a Time, Nobody Wanted Them.

By Mark Gongloff

The Treasury Department released its Treasury International Capital data for June earlier, and it showed a big drop in foreign demand for Treasurys in June. In other ancient history, on this date in 778 the Basques won the Battle of Roncevaux Pass.

According to TIC buyers, foreigners sold $4.5 billion in long-term Treasurys in June, the worst month for Treasury demand since May 2009 and a sharp falloff from the $37.9 bought in May.

The Treasury market yawned at this report, given that it offers a snapshot of the situation long, long before the recent collapse in the stock market, which has driven everybody and their grandmother back to the safety of Treasury debt.

It appears to have been driven somewhat by the rancorous debt-ceiling fight, offering a warning note that Treasurys could be abandoned again in the future, writes Millan Mulraine of TD Securities:

While US Treasuries continue to enjoy widespread appeal among global investors, it does appear that the intensification of the political debate around the debt ceiling increase may have done some damage to its reputation. As such, it is quite possible that this divestment trend in Treasury securities intensified in July. However, judging from the price action in recent weeks as the flight to safety pushed Treasury yields to record lows, it appears that global investors rushed back to US government securities in droves in August, even in spite of the S&P downgrade.

The 10-year Treasury note is yielding 2.27%, one tick higher on the day, mainly because the stock market is ripping higher for the third straight day.

http://blogs.wsj.com/marketbeat/2011/08 ... nted-them/