'Ithinkthereis a logic both for sharebuybacks, and an attraction to being very competitivewithfixed-incomeinstrumentshereif we increaseour yield,' hesays.
In many cases, pension funds are buying government bonds because they need fixedincomeinstruments and the near-collapse of the mortgage-backed securities market has eliminated that supply.
Moreover, there is a strong sense that these artificially low rates are just a prelude to a withering bout of inflation that will smack fixedincomeinstruments hard.
In fact, any asset class with risk directly tied to developed economies has generally been forgotten in favor of hard assets or fixedincomeinstruments with negative real rates but an abundance of safety.