Government bonds have been trading sideways since the middle of last year as market participants wax and wane about the prospects of the nascent economy recovery. Also, it has not quite been the one-way traffic for yields many pundits have been forecasting as seen from the US Treasury being able to sell paper across the yield curve at lower-than-expected yields.

Not subscribing to a meaningful economic recovery under his “new normal” scenario, Bill Gross, the manager of the world’s largest bond fund, last month increased the exposure of the Pimco Total Return Fund to US government debt to 35% from 31% – the first increase since October 2009. Interestingly, $409 billion from a total inflow of $507 billion into US mutual funds over the past year ended up in bond funds.

The chart below, courtesy of the latest Commitment of Traders report (via David Rosenberg, chief economist and strategist

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The Treasury announced on Friday that it has received net proceeds of $6.6 million from the sale of warrants it had obtained as part of its investment in Texas Capital Bancshares Inc. (TCBI) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. TCBI had repaid the entire $75 million of bailout money it had received from the government in January 2009.   The Treasury auctioned 758,086 warrants at $8.85 each. The final price was above the floor price of $6.50 per warrant set by the Treasury. The TCBI warrants have a strike price of $14.84 and expire in January 2019.   The current move will completely free TCBI from government intervention. The auction of TCBI warrants follows the sale of Signature Bank’s (SBNY) warrants on Thursday, Washington Federal Inc.’s (WFSL) warrants on Wednesday and Bank of America Corp.'s (BAC) warrants in the previous week.   The ...

The Treasury announced Thursday that it has received net proceeds of $11.2 million from the sale of warrants it obtained as part of its investment in New York-based Signature Bank (SBNY) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. In Mar 2009, Signature had repaid the entire $120 million of bailout money it had received from the government in Dec 2008.   The Treasury auctioned 595,829 warrants at $19.00 each. The final price was above the floor price of $16 per warrant set by Treasury. The Signature warrants have a strike price of $30.21 and expire in Dec 2018.   The current move will completely free Signature from government intervention. The auction for Signature warrants follows the sale of Washington Federal Inc.’s (WFSL) warrants on Wednesday and Bank of America Corp.'s (BAC) warrants last week. The government received net proceeds ...

The Treasury announced Wednesday that it has received net proceeds of $15.4 million from the sale of warrants it obtained as part of its investment in Washington Federal Inc. (WFSL) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. In May 2009, WFSL repaid the entire $200 million of bailout money it had received from the government.

The Treasury auctioned 1.71 million warrants at $9.15 each. The final price was above the floor price of $5 per warrant set by Treasury.

The current move will completely free WFSL from government intervention. The auction for WFSL warrants follows Bank of America Corp.'s (BAC) warrants sale last week. The government received record net proceeds of $1.5 billion from the sale of Bank of America warrants.

The amount received from the auction of Bank of America warrants exceeds $1.1 billion raised from the sale of Goldman Sachs (

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For Immediate Release

Chicago, IL – March 8, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Bank of America Corp. (BAC), Goldman Sachs (GS), Washington Federal (WFSL), Texas Capital Bancshares (TCBI) and Signature Bank (SBNY).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

U.S. Gets $1.5B from BofA Warrants

The Treasury has received net proceeds of $1.5 billion from the sale of warrants that entitled it to purchase common stock of Bank of America Corp. (BAC).

The Treasury received these warrants as part of its investment in

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The Treasury has received net proceeds of $1.5 billion from the sale of warrants that entitled it to purchase common stock of Bank of America Corp. (BAC).   The Treasury received these warrants as part of its investment in BofA through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. In Dec 2009, BofA repaid the entire $45 billion of bailout money it had received from the government.   The current move will completely free BofA from government intervention. This is the largest amount received by the Treasury from the sale of warrants of a single institution.   The amount received from the auction of BofA warrants exceeds $1.1 billion raised from the sale of Goldman Sachs (GS) warrants earlier.   The Treasury auctioned one tranche of warrants at $8.35 each and the other at $2.55 each. The 272.17 million warrants were sold ...

“This is half-baked justice at best,” US District Judge Jed Rakoff wrote earlier this week in disgust. He had just signed off on a “paltry” deal between the Securities and Exchange Commission and Bank of America. The SEC sought punitive damages on behalf of BofA shareholders, rightfully accusing the bank of lying to its investors before, during, and after its 2008 merger with Merrill Lynch. Bank of America executives did not disclose the details of the Merrill deal with shareholders – a criminal variety of fraud that helped bring BofA stock from $26 a share the day the merger was announced to $3 a pop five months later.

The penalty the SEC sought for this multibillion-dollar hustle: $33 million. Judge Rakoff actually rejected that amount in late 2009, saying then that the deal “does not comport with the most elementary notions of justice and morality.” Thus, the SEC came back with

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Investment guru Marc Faber calls Treasuries junk bonds. Best-selling Black Swan author Nassim Taleb says, “It’s a no brainer, every single human should short US Treasury bonds.”  And there is a new expression among traders on Wall Street these days, “anything but Treasury bonds” or ABT for short. Is the conventional wisdom right?

This week on Wealthtrack, Consuelo Mack poses the question: What place do US Treasuries, bonds in general, stocks and alternative investments have in an investment portfolio in today’s markets? The guests are Robert Kessler, head of Kessler Investment Advisers and one of Fortune Magazine’s “Top American Investors” and David Darst, Morgan Stanley’s chief investment strategist and author of The little book that saves your assets.

Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.

Source:

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In the monthly U.S. Treasury report this week, it was announced that China had sold $34.2 billion of Treasuries in December (or allowed short-term ones to run off), making Japan once again the... Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come. Money moves markets. But Money Morning lets you move first.

The big news yesterday was that China was dumping its US Treasury debt. Behind this story is another story. And, of course, there’s another one behind it. And about a million in front. But let’s begin in the beginning:

WASHINGTON (AP) – The government said Tuesday that foreign demand for US Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits.

The Treasury Department reported that foreign holdings of US Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009.

The big drop in China’s holdings meant that it lost the top spot in terms of foreign ownership of US Treasuries, dropping to second place behind Japan.

Japan also reduced

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