For a while I have suggested that the low (actually zero) interest rate policy out of the Fed would have consequences. Courtesy of Eric Sprott's not-so-regular newsletter, here are a few data points to chew on:
-From Reuters, of companies listed on the S&P 500 with defined benefit pension plans, 97% were underfunded at the end of 2011, triple the number as in 2002. Since so many of these plans allocate heavily to fixed income, the reason is clear.
-From the WSJ, since the implementation of Operation Twist in October, the Fed has purchased 91% of treasuries issued with 20 to 30 year maturities. Could it be that external demand is drying up without a move to higher yields?
