2013-02-09 —

``Wall Street's "bond kings" have loudly proclaimed the worst and most dangerous bond market conditions they had ever seen but foreign central banks (FCBs), who are not moved by such proclamations, clearly weren't listening. Last week they added the largest amount to their holdings of Treasuries at the Fed in the 12 years that the Fed has been publishing this data. Demand surged at Treasury Auctions as other investors joined FCBs in returning to the table. Sentiment toward the European crisis, which had been complacent for several months, suddenly turned negative again and capital fleeing Europe apparently sought safe haven again in the US Treasury market. Primary Dealers also returned to net buying after a month of heavy selling.''

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