Three battles are under way: Treasury borrowing vs. interest rates; slower economic decline vs. bottom; and banks vs. everybody else. Total Treasury new-cash borrowings this week and next: $171 billion, a tad high (the 2009 two-week average: $75 billion). The Fed on March 18 said it would buy $300 billion in Treasurys this year -- many thought in an effort to control Treasury interest rates, specifically holding the 10-year under 3 percent. Not so: the 10-year is trading at 3.16 percent today. One-quarter of the $300 billion has already been spent. The purpose was to get cash in the economy around broken banks, not to rig Treasury rates. The Treasury market is too big and too important to the world, and the Fed already has the other credit markets on life support. The longer you k...
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