/STOCKS/CORPORATES: And BMO's......>

US TSYS/RESEARCH: /STOCKS/CORPORATES: And BMO's Ian Lyngen noted that "while we

heard several possible rationales for the thinking behind the early Treasury

rally, from a reallocation move in equities to apprehension over tax reforms

that may yet stumble on the Byrd rule, we're not keen to pin the move on any one

event. The most obvious motivation, correcting frothy risk markets, seemed to be

mentioned the least despite the fact that it is the Fed's primary aim. As a

result, we're less concerned about the minor move over the past few days, even

as we harbor more serious doubts about whether the Fed will end the honeymoon

with the market with a "Goldilocks" tightening and not end up seeing a broader

correction that often comes about at the end of such market cycles."

- He said that "we also found assurances that the credit selloff was limited to

only the lowest tiers of credit spectrum as not particularly reassuring, since

markets often only discriminate between credit quality at the beginning and end

of larger corrections in risk. Ya think? Don't all credit crisis start with some

coal-mine canary?"