Treasury 30-year bonds gained as one of the biggest yield premiums over 2-year government securities on record bolstered demand at today’s U.S. auction of $13 billion in bonds.

“Insurers, pension funds and other investors continue to buy the 30-year because of its outright yield and it relative value attractive against the short-end given the inflation and economic pictures,” said Thomas Tucci, head of U.S. government bond trading in New York at the Royal Bank of Canada, one of the 18 primary dealers required to bid at Treasury auctions. “There is just little value in the front end versus the long bond.”

“If you look behind the trade numbers, exports and imports both fell,” said Kathy Lien, director of currency research, with online currency trader GFT Forex, in New York. “The contraction in imports and exports does not play into the growth story. That’s why risk currencies are selling off and the dollar is rising.”

Today’s auction of 30-year debt followed a sale of $21 billion of 10-year debt yesterday. The Treasury auctioned a record-tying $40 billion of three-year notes on March 9.

The 30-year securities drew a yield of 4.679 percent, compared with an average forecast of 4.702 percent in a Bloomberg News survey of 9 of the Federal Reserve’s 18 primary dealers. Direct bidders, non-primary dealers that place their bids directly with the Treasury, bought 29.6 percent, the highest since at least February 2006.

“The yield pick-up extending out the curve is attractive at these levels,” said Richard Bryant, senior vice president in fixed income at MF Global Inc. in New York, a broker of exchange-traded futures. “Real money will go to work on the long end of the Treasury market. The range that has held on the long end is reflective of the benign inflation environment at the moment.”

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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Gov. Chris Christie today will create a commission to privatize as many as 2,000 state jobs beginning next January, officials said Wednesday night.

As he grapples with an $11 billion deficit in the budget he will present on Tuesday, Christie is also considering invoking the Disaster Control Act to suspend Civil Service rules to make it easier for him to lay off higher-paid workers, according to two administration officials.

The Republican governor today plans to sign an executive order creating the task force to cut the size and cost of the state payroll. Three officials familiar with his plans last night said the commission will identify which jobs or agencies would be operated by the private sector and how that would be accomplished. The officials declined to be named ahead of the announcement.

Privatizing jobs would require layoffs. By beginning them in January, Christie would not be subject to a deal between former Gov. Jon Corzine and state worker unions that would require the state to pay millions in raises to remaining workers if he orders layoffs before then.

Suspending civil service would allow Christie to order layoffs of higher-paid unionized state employees with many years of service, rather than the usual practice of layoffs that affect lower-paid new employees first, the officials said. Currently, workers with more seniority can "bump" less-experienced workers from their jobs.

The privatization effort deals a blow to state worker unions just 48 hours after Christie publicly acknowledged he is bound by the agreement struck by Corzine where state workers would get two 3.5 percent raises in the coming fiscal year Ð one in July and one in January. They deferred one raise and took 10 unpaid furlough days last year in exchange for the no-layoff pledge.

A federally funded ticketing blitz in the state of Virginia landed a total of 6996 traffic tickets this weekend. The blitz, dubbed “Operation Air, Land & Speed” coincided with frantic efforts by state officials to close a$2.2 billion budget deficit. Supervisors ordered state troopers to saturate Interstates 81 and 95 to issue as many tickets as humanly possible over the space of two days.

Activists with the National Motorists Association pointed out that enforcement efforts may have concentrated on areas where speed limits are expected to rise to 70 MPH following Governor Bob McDonnell’s signature on legislation raising the state’s maximum speed limit (view law). This would mean a significant number of tickets were issued for conduct that will be perfectly legal in a matter of months. The group also indicated that state police tactics may run afoul of state law.

Under the federal grant application process, state officials explained that they would pay officers overtime — at least one-and-a-half times their normal salary — to participate. This special reward for ticketing operation participants appears to violate the spirit of state law.

If Las Vegas can't get the desired wage concessions out of its employee unions, the city should simply fire everyone and offer to rehire them to work a shorter work week, Mayor Oscar Goodman said Wednesday.

"I'm trying to save jobs. I really am," Goodman said. "If it's a strong-arm tactic, so be it. "If it's legal, I'm going to propose it to the council. I think it's the only way we're going to save jobs."

Goodman ordered the city attorney to study the possibility.

The idea didn't go well with the unions. Several union presidents went so far as to call the mayor a bully. And Councilman Ricki Barlow also said he disagreed with the mayor.

The city faces a $70 million budget hole to fill and most likely a $40 million deficit in the next fiscal year, and the proposed solution to that hasn't changed -- all employees, Goodman said, should forgo their scheduled raises and accept 8 percent pay cuts in each of the next two years.

Or, under his fire-and-rehire plan, a new 37.5-hour workweek would trim costs 6.25 percent, and a 36-hour week would cut costs 10 percent, he said.

"I've never been as severely disappointed as this situation has caused me to be," Goodman said about the unions being unwilling to open their contracts and accept needed changes.

Goodman also called for a study of whether the city should privatize its ambulance services, noting that his fire-them-all approach isn't applicable to public safety employees.

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Please consider the Unemployment Weekly Claims Report for March 11, 2010.

In the week ending March 6, the advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week's revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week's revised average of 470,500.

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.