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Treasury releases data (quietly) that it will need to borrow 1 Trillion next 3 years

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senseamp said:
Looks like the markets noticed 🙂
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Is issuing new debt destabilizing in any way? Granted, what it portends for the future is not good, but one wonders the mechanism for triggering a selloff. In another topic there was mention of additional bonds being issued.

senseamp said:
Who forced Republicans to issue additional trillions in bonds while Fed is trying to shed theirs ? No one. There was no recession that required fiscal stimulus. It was pure giveaway to rich donors.
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Jaskalas said:
Is issuing new debt destabilizing in any way? Granted, what it portends for the future is not good, but one wonders the mechanism for triggering a selloff. In another topic there was mention of additional bonds being issued.
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If people understood the mechanism for this sell off clearly they wouldn’t be telling us, they would be using that knowledge to make billions.

In a broad sense though bond yields have increased substantially over the last year or so, making them more attractive as compared to stocks. The larger the quantity of bonds the US has to sell, the higher the yield will likely go. We appear to have finally escaped the liquidity trap, so the more standard rules of economics have started to apply again.

This is one of many reasons why engaging in fiscal stimulus at a time of near full employment is a deeply stupid idea.
 
Issuing new debt creates supply of bonds that have to be sold, requiring a higher interest rate to sell them. Most assets are priced off the risk free rate of return that bonds pay. If bonds pay more per dollar of value, stocks have to as well, so their price to earnings drops.
 
senseamp said:
Looks like the markets noticed 🙂
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The markets noticed wages climbing in the last fiscal report Friday. The fact that more money is going to workers all of a sudden has them greatly concerned about inflation and a stop to that must be implemented immediately.
 
Thump553 said:
The markets noticed wages climbing in the last fiscal report Friday. The fact that more money is going to workers all of a sudden has them greatly concerned about inflation and a stop to that must be implemented immediately.
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Not just the threat of inflation but the fact that the Fed is trying to get back to a nominal interest rate instead of being stuck in "low" mode. I've read that they want to get it back up so that they will have some ammunition for the next recession. Problem being, drive rates up too far / too quickly and you'll get your recession from that alone.
 
fskimospy said:
If people understood the mechanism for this sell off clearly they wouldn’t be telling us, they would be using that knowledge to make billions.

In a broad sense though bond yields have increased substantially over the last year or so, making them more attractive as compared to stocks. The larger the quantity of bonds the US has to sell, the higher the yield will likely go. We appear to have finally escaped the liquidity trap, so the more standard rules of economics have started to apply again.

This is one of many reasons why engaging in fiscal stimulus at a time of near full employment is a deeply stupid idea.
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did someone say fiscal stimulus?

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Hear me out now...what if we sell special "development bonds" to China and Russia, backed by our own natural resources on BLM/Interior land or offshore? It's not like *we're* doing anything with those precious resources!
 
I love me some "spend more than we bring in" government. Especially when they lower their own income. Its great....
 
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I used to be all for tax cuts, until the realization hit that spending cuts simply aren't ever allowed. To do one without the other is madness.
 
ElFenix said:
whaddayamean? of course this is both sides, the democrats did it so now trump gets to do it, just biggerer and betterer.
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I know you’re kidding but this sort of thing is just so incredibly awful, cynical, and toxic to decent governance.

When confronted with the largest economic crisis since the Great Depression Democrats put forth a bill that was fundamentally based around stimulating the economy through tax cuts for middle class people, shoring up collapsing education funding in states, and building infrastructure. Republicans shrieked we couldn’t afford fiscal stimulus. When confronted with a labor market somewhere near full employment their response was a fiscal stimulus 2-3 times larger, built around giving money to rich people and buying tanks.

Things like this are what make me crazy because one side isn’t engaging honestly.
 
fskimospy said:
I know you’re kidding but this sort of thing is just so incredibly awful, cynical, and toxic to decent governance.

When confronted with the largest economic crisis since the Great Depression Democrats put forth a bill that was fundamentally based around stimulating the economy through tax cuts for middle class people, shoring up collapsing education funding in states, and building infrastructure. Republicans shrieked we couldn’t afford fiscal stimulus. When confronted with a labor market somewhere near full employment their response was a fiscal stimulus 2-3 times larger, built around giving money to rich people and buying tanks.

Things like this are what make me crazy because one side isn’t engaging honestly.
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They use every wedge issue they can to conceal the fact that they intend to hobble the govt of the people under debt, prevent it from doing the things Americans depend on it to do.
 
Jhhnn said:
They use every wedge issue they can to conceal the fact that they intend to hobble the govt of the people under debt, prevent it from doing the things Americans depend on it to do.
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If Democrats had the nerve to allow or even propose spending cuts to match every tax cut, the people would realize that they liked it better before. No one can tell me Dems aren't complicit in creating giant deficits.
 
ch33zw1z said:
Sure, but people who need help are really just moochers, so fuck 'em....they can still send their kids to war tho, it cool.
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I'd take issue with calling the needy moochers. Growing up poor gave me a lot of firsthand experience with people on benefits, they're just like everyone else, a mixed bag. Some deserve more, some deserve a kick in the ass. Impossible for government to sort out, perhaps until the Singularity.
 
Those some are gonna get played in 2018. Spending cuts are coming, and sure as heck won't be in defense spending.
 
Most Americans seem to like having their stuff and worry about paying for it later, witness over $1 trillion in consumer credit card debt as proof. It's hardly a surprise that our government would be a reflection of this propensity. Too bad we can't all just grow up.
 
Should our elected officials not lead by example?

I agree with your premise, just flip it and the reflection is the same.
 
ch33zw1z said:
Should our elected officials not lead by example?

I agree with your premise, just flip it and the reflection is the same.
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How many Trump examples do you want?😛 He just settled with the federal court to the tune of $25m for his university for duping students.
373a55fcfadd3f6944b9da35b476bf93--donald-trump-presidents.jpg
 
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