Should the US sell ultra-long (100 year) bonds?

The longest bond issued by the US Treasury has a maturity of 30 years and the average maturity of outstanding debt is 5 years (59 months).

However, the TBAC (Treasury Borrowing Advisory Committee) has discussed selling "ultra-long" maturity bonds with up to 100 year maturity, to exploit low borrowing costs. Who would invest in such low-yielding paper? It is argued long-term investors like pension funds and insurance companies...but wouldn't they also want to see a return?

France, China and the UK have sold 50 year debt.

The benefits to the US Treasury would also include diversification of its investor base beyond the largest investors, foreign central banks, thus "reducing funding risk".

In Lehman news, it has been reported that Bernanke on 14 Sept 2008 wrote in an email: $12bn plus Fed liquidity support would not be enough (to keep Lehman afloat). On 9 Sept 2008, the Liquidation Gameplan was distributed, highlighting: "Lehman is bigger and more global than Bear Stearns".

Estonia Counts In on the Euro

Estonia is now the 17th member of the Eurozone. PM Andrus Ansip said what was a small step for the Euro was a big step for Estonia.

The View from Abu Dhabi's Investment Vehicle

Aabar, the Abu Dhabi investment vehicle, has sold its stake in Banco Santander's Brazil unit, in a head-shaking affront towards emerging markets, or at very least, a risk-aversive stance.

Talk of Irish Bailout

Ireland is in trouble - it may need to be bailed out. Have the needs of continental economies come at the detriment of the Irish economy? The Telegraph believes so, and asserts that Brussels has only helped Ireland in areas that were shrinking such as agriculture.

Ballmer's Big Sale

Behemoth Steve Ballmer has sold $1.3 billion worth of shares in Microsoft and plans to sell more by year-end.

QE2 Deployed: America's $600bn Stimulus Package and Impact on EM Currencies

Fed CHAIRMAN Ben Bernanke (undergrad Harvard, PhD Economics from MIT) has said the US' $600bn stimulus package will not spur inflation. Will it lead to inflation? Could speculative bubbles appear in bonds and commodities? South Africa's finance minister Pravin Gordhan said the US should pay more mind to the impact of QE2 on other nations. The stimulus will take the form of the government buying (government) bonds in a bid to make loans cheaper and encourage Americans to spend more. The impact on emerging market currencies was for them to strengthen versus the dollar, provoking foreign countries to intervene in the currency markets to maintain export competitiveness.

Bond Yields Bubble Up in Greece

Bond yields in Greece bubbled ahead of the weekend's local government elections (10yr bond yield was 11.34%). Greece was bailed out in May by the EU and the IMF and today's bond yields are approaching those May highs when yields were over 12%. The EU and IMF are insisting wage and pension cuts and higher VAT and excise taxes.