Reducing the haven appeal of U.S. debt.

From Bloomberg:

Ten-year Treasuries fell the most in almost two months as stocks gained on government efforts to bail out banks, reducing the haven appeal of U.S. debt.

U.S. securities dropped as European government bonds fell amid advances by global equities after the U.S. agreed to a $138 billion bailout of Bank of America Corp. The cost of living fell in December as the recession deepened.

“The sell-off in general is happening because risky assets are higher on optimism that some of this is going to work, whether it’s the stimulus or that there are banks that are too big to fail, and therefore there will be credit flowing through the system,” said Ira Jersey, an interest-rate strategist in New York at Credit Suisse Group, one of 17 primary dealers that trade with the Federal Reserve.

The 10-year yield climbed 20 basis points, or 0.20 percentage point, the most since Nov. 21, to 2.40 percent at 9:31 a.m. in New York, according to BGCantor Market Data. The price of the 3.75 percent security maturing in November 2018 fell 1 27/32, or $18.44 per $1,000 face amount, to 111 25/32. Two-year note yields increased eight basis points to 0.78 percent.

Even with all out announced bailouts over the last two quarters...money has flocked to US Treasuries. As bad as it is here in America...we are doing much better than just about everywhere else. If and when things go from deflationary to inflationary it is likely that there will be a massive sell off in US Treasuries.