Best of the Bond Market for June 13th, 2012 NASDAQ: US Sells 10 Year Treasuries at Record Low Yield – The U.S. government attracted strong demand at its 10-year debt offering Wednesday, despite paying a new record-low auction yield of 1.622%. That rate is by far the lowest yield ever paid at an auction of this maturity, and was actually less that the going market rate at the time of the sale. The previous record was set at last month’s auction, at a 1.855% yield. CFA Institute: Negative Nominal Debt Yields: How Low Can Yields Go? – Yet when we look at the spreadsheet, we can see that a compelling argument, not unique to the fixed-income world (see below), can be made for purchasing negative nominal yield securities. This is due to the possibility of interest rates going even lower/capital gains rising even higher. Obviously, this is a greater fool/musical chairs game. Chicago Tribune: Judge dismisses lawsuit against Detroit fiscal pact – A Michigan judge on Wednesday dismissed a lawsuit that challenged Detroit’s financial stability agreement and which had threatened to leave the city without cash to make a critical debt payment due on Friday. PennLive: Harrisburg stares down $12.6 million budget deficit – Harrisburg is staring down a year-end budget deficit of $12.6 million, said state Department of Community and Economic Development official Fred Reddig. That figure includes a general obligation debt payment the city missed in March and another it is supposed to pay in a few months. BlackRock – Overall housing activity remains weak, but investors see opportunity in mortgages – The housing market overall continues to remain challenged by various factors. A large overhang of “shadow” inventory remains and the mix of home sales to date has been heavily skewed toward distressed purchases. For fixed income investors however, mortgages represent an opportunity. The Big Picture: Are U.S. Debt Levels Now Manageable? – …