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Wednesday, June 1, 2011


The market has a nice way of humbling people.  In this case, the 10yr treasury is humbling PIMCO.

Today's ADP jobs report is humbling the view of 'rising 10yr' rates after QE2 ends.

I am not exempt from this either. I saw conditions that made me think the yield had bottomed a few days ago. But I was not expecting such a crappy ADP jobs number. (We should have been in the 100K range.)

Regardless, the lower 10yr is triggering selling in names that are really interesting. I started adding IBM, and will begin to add other names with further weakness. (The markets are already at depressed multiples and reflecting slower growth, despite nice profits within global companies.)

Oh, and if anyone missed it this morning, China's decision to off load some $400Billion in local gov. debt to the central gov, is pretty bullish. And it also displays what kind of action China will do with the +$2 Trillion dollars it has. It will clean up its fiscal house. So if anyone thinks China will have a hard landing in anything, think again.

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