U.S. Treasury bond market bubble has burst sounded melancholy blues.

<P> Bubble has burst. .</ P> <P> we are talking about U.S. Treasury bonds, rather than the real estate market. .The end of 2008, the risk-averse investors have bought U.S. Treasury bonds and promote bond yields fell to their lowest level in decades. .30-year bond yield fell below 3%, short-term bond yields fell to zero. .</ P> <P> Since then, the economy show signs of bottoming out, the function of credit markets continue to return to normal, the stock market from the March low rebound. .U.S. Treasury bonds is now a bear market, the credit market in corporate bonds, municipal bonds and mortgage securities late last year in the cold of the species remains the bullish enthusiasm. .For example, the 30-year U.S. Treasury notes yield 2.82% from the end of 2008 rose to 4.10%, the price fell by 20%. .</ P> <P> <CENTER> Marc Burckhardt "Barron" in the early 2009's a cover article said, the U.S. Treasury has already peaked, while the other species in the bond market already hit bottom. .We recognize not only to the end of this apparent change. .Buffett (Warren Buffett) had mentioned that his Berkshire - Hathaway (Berkshire Hathaway) is thrown at the end of 2008, a loss of U.S. Treasury bonds. .In February Buffett's annual letter to shareholders, wrote that when writing the financial history of this decade when the U.S. debt bubble will be the end of 2008 with the beginning of this century to the year 2005 the real estate bubble with impressively. .The bond market is now the case how? For several reasons still nothing seems to appeal to the U.S. Treasury. .By historical standards to measure very low bond yields, to compensate for a record budget deficit, the U.S. government is a large number of issuing treasury bonds, while the federal government's economic stimulus plan may end up spending huge push up the inflation rate significantly. .</ CENTER> <P> Pimco executive vice president Rod Chomsky (Steve Rodosky) said the value of other more high-quality bonds. .Pimco runs the biggest U.S. bond fund Pimco Total Return. .The fund's investment returns this year, continues to lead the peers so far this year is 4.8%. .Pimco's chief investment officer of El - Elian (Mohamed El-Erian) to the end of the year had put it bluntly, to sell bonds, they are too expensive. .</ P> <P> Although the bond holders to eventually be able to recover the principal, but the price of their bonds prior to maturity there is likely to fall, investors get back to the U.S. dollar as the principal and interest may have depreciated significantly. .The coming year bond yields are likely to continue to rise, which means that as the U.S. economy has come on strong bond prices will fall. .30-year bond yield may exceed 5%, 10-year bond yields may rise to 3.15% from the current 4%. .</ P> <P> 2008 theme is to invest years of high-quality varieties of bonds, but so far this year the theme is from high-quality varieties, because those are generally the highest rate of return from the lower level, more speculative .securities offered. .Junk bonds and municipal bonds rated lower return on investment has exceeded 20%, while the rise in government bond yields has become a global phenomenon. .</ P> <P> But even after the recent rising for months, corporate bond markets still look attractive. .Merrill Lynch (Merrill Lynch) Index of high yield junk bonds covered by the average yield has gone from 19.5% last year down to 15%, still not low, while those with higher ratings of BBB corporate bonds that will have a 8 .% of the rate of return, than a full four percentage points higher than the long-term bond yields. .</ P> <P> municipal bond market in 2009 showed a rising trend has been, the top long-term municipal bonds yield from 5.25% to 4.5%, while the tobacco revenue bonds and hospital bonds, the yield of lower-rated securities in the .exceed 10% after the end of last year, has dropped more than a percentage point. .</ P> <P> 30-year high-rated municipal bonds, now appears at a reasonable price level. .Late last year, the top 30-year municipal bond yields turned out to be twice the 30-year bonds. .And now, the top 30-year municipal bonds yield 4.5%, just over 30-year U.S. Treasury bond yields higher. .</ P> <P> by historical standards, this interest rate differential between the two is still huge. .It is hard on the 10-year medium-term bonds have much less enthusiasm for investment; their yields are 3% and below. .Lower-rated municipal bond prices may have further to rise. .</ P> <P>.