Could turmoil in Chinese financial markets be the cause of the rise in interest rates on U.S. Treasuries? Danske Bank's chief emerging-markets analyst, Lars Christensen, explained the theory to me earlier today. Last week, China's central bank deliberately withdrew liquidity and pushed up the short-term interest rates banks pay to borrow from each other, in an effort to shove the Chinese banking system toward less risk-taking. That squeeze, Christensen explained, caused Chinese banks to dump Treasuries onto the market. (China's central bank is famous for being the largest foreign holder of Treasuries, but its four ... (full story)