USG Debt bubble popping?

[bamacre]

http://www.reuters.com/article/2011/03/09/us-pimco-debt-idUSTRE7285M020110309

That's not good news, it's not "the sky is falling" bad news, yet at least, but it certainly isn't a good sign. Let's pray Gross doesn't begin a domino effect.

 

[dmcowen674]

More omnimous signs

3-8-2011

http://news.yahoo.com/s/nm/20110308/bs_nm/us_hedgefunds_icahn_7

Icahn to return his clients' money


"I do not wish to be responsible to limited partners through another possible market crisis."

By taking this step, Icahn joins a number of other well-known hedge-fund managers, including George Soros' protege Stanley Druckenmiller and Julian Robertson's former employee Chris Shumway, who recently returned their investors' money.

=====================================
They know something is a foot.

 

[Darwin333]

More omnimous signs

They know something is a foot.

They passed their elementary math classes.

 

[zephyrprime]

US debt levels as well as debt levels in other leading industrialized nations are wholly unsustainable. It is inevitable that default & restructuring will result as a consequence of this problem.

 

[fskimospy]

US debt levels as well as debt levels in other leading industrialized nations are wholly unsustainable. It is inevitable that default & restructuring will result as a consequence of this problem.

Except that leading industrialized nations have had higher debt levels in the past, and have not defaulted.

(not only that, but the US is literally incapable of defaulting unless we choose to do so. Our debts are in currency we print)

 

[Dissipate]

Except that leading industrialized nations have had higher debt levels in the past, and have not defaulted.

(not only that, but the US is literally incapable of defaulting unless we choose to do so. Our debts are in currency we print)

Hyperinflation! Yay!

 

[ElFenix]

Except that leading industrialized nations have had higher debt levels in the past, and have not defaulted.

as a whole, we're above where we've ever been before

http://www.dailymarkets.com/economy...io-is-now-worse-than-in-the-great-depression/

 

[Engineer]

as a whole, we're above where we've ever been before

http://www.dailymarkets.com/economy...io-is-now-worse-than-in-the-great-depression/

That's all debt, both public and private. Private debt is defaulted all the time. The Public (US) debt has not been defaulted (yet).

 

[LegendKiller]

That's all debt, both public and private. Private debt is defaulted all the time. The Public (US) debt has not been defaulted (yet).

There's a ton of intermediation there also. For example, credit card obligors' balances are securitized by CC companies, selling bonds into the market, many times those bonds are put into leveraged investment vehicles, including asset backed commercial paper. That means the balance has been counted 3 times.

Soros said that Icahn had other reasons than getting out of a "frothy market", nobody knows what that means.

Pimco exiting isn't too surprising, yields will raise but I don't think it will be apocalyptic. I hope there's a QE3, triple down this time with another 2TR. Fuck the chinese.

 

[bamacre]

There's a ton of intermediation there also. For example, credit card obligors' balances are securitized by CC companies, selling bonds into the market, many times those bonds are put into leveraged investment vehicles, including asset backed commercial paper. That means the balance has been counted 3 times.

Soros said that Icahn had other reasons than getting out of a "frothy market", nobody knows what that means.

Pimco exiting isn't too surprising, yields will raise but I don't think it will be apocalyptic. I hope there's a QE3, triple down this time with another 2TR. Fuck the chinese.

Any idea what inflation rate the Chinese are getting hit with? They are buying the shit out of gold and silver. 200 tons of gold in Jan and Feb.

 

[zephyrprime]

Except that leading industrialized nations have had higher debt levels in the past, and have not defaulted.

(not only that, but the US is literally incapable of defaulting unless we choose to do so. Our debts are in currency we print)

The US's debt levels are the highest they've ever been. Same for Japan. A lot of the European countries had higher debt levels during the WWII era.

Here are current net debt levels:
Japan ... US$44,722 in net debt per person
Italy ... $36,645
United States ... $24,315
France ... $23,457
Germany ... $22,454
United Kingdom ... $13,018


The Bank of England overseeing an economy ravaged by the Great Depression defaulted on gold payments in September, 1931. The US has never defaulted but that doesn't preclude the possibility when faced with the highest debt levels ever. Lots of countries print their own currency and still default (it's called "devaluing").

 

[First]

I guess you could panic over inflation currently at 1.5% including food and energy, or 1.0% excluding it, with unemployment down to 8.9% (1% improvement over ~4-5 months), GDP 3%-4% quarterly, etc. Is gold on pace for $5000 yet btw? I overhead some suckers on the board here betting on it long-term.

 

[KB]

Gross isn't selling treasuries because he lacks confidence in the US government. He is selling them because he expects interest rates to rise from a growing economy. When interest rates rise the value of a bond(treasury) is reduced. End of the world not found.

 

[sMiLeYz]

Gross isn't selling treasuries because he lacks confidence in the US government. He is selling them because he expects interest rates to rise from a growing economy. When interest rates rise the value of a bond(treasury) is reduced. End of the world not found.

This.

 

[mrjminer]

The US's debt levels are the highest they've ever been. Same for Japan. A lot of the European countries had higher debt levels during the WWII era.

Here are current net debt levels:
Japan ... US$44,722 in net debt per person
Italy ... $36,645
United States ... $24,315
France ... $23,457
Germany ... $22,454
United Kingdom ... $13,018


The Bank of England overseeing an economy ravaged by the Great Depression defaulted on gold payments in September, 1931. The US has never defaulted but that doesn't preclude the possibility when faced with the highest debt levels ever. Lots of countries print their own currency and still default (it's called "devaluing").

I'm pretty surprised at how high Japan's is, and how low France's is.

 

[fskimospy]

The US's debt levels are the highest they've ever been. Same for Japan. A lot of the European countries had higher debt levels during the WWII era.

Here are current net debt levels:
Japan ... US$44,722 in net debt per person
Italy ... $36,645
United States ... $24,315
France ... $23,457
Germany ... $22,454
United Kingdom ... $13,018


The Bank of England overseeing an economy ravaged by the Great Depression defaulted on gold payments in September, 1931. The US has never defaulted but that doesn't preclude the possibility when faced with the highest debt levels ever. Lots of countries print their own currency and still default (it's called "devaluing").

That's because the countries that devalue their currency owe debts in a currency they DON'T print. The Bank of England defaulted on their gold payments because they didn't have enough gold... the reason being that they didn't have a gold printing press in the bank of the bank.

The US owes debts in dollars, and the US is the sole source of dollars on planet Earth. While the US might face inflation by printing the extra dollars necessary to pay off our debts, it is a literal impossibility for us to default on debts in dollars unless we choose to.

 

[3chordcharlie]

Hyperinflation! Yay!

I wonder what 3 years of ~0% fed rate has really done to the money supply.

Credit has stayed a little tight to the end-user, so it could have been worse, but it's gotta be bad!

 

[the DRIZZLE]

That's because the countries that devalue their currency owe debts in a currency they DON'T print. The Bank of England defaulted on their gold payments because they didn't have enough gold... the reason being that they didn't have a gold printing press in the bank of the bank.

The US owes debts in dollars, and the US is the sole source of dollars on planet Earth. While the US might face inflation by printing the extra dollars necessary to pay off our debts, it is a literal impossibility for us to default on debts in dollars unless we choose to.

If you are a foreign investor the risk of being paid back in devalued dollars isn't any different than the risk of default.

 

[LegendKiller]

Any idea what inflation rate the Chinese are getting hit with? They are buying the shit out of gold and silver. 200 tons of gold in Jan and Feb.

Chinese copper imports down 35% in a month.

 

[santz]

Gold is insane at this point

 

[airdata]

Is gold on pace for $5000 yet btw? I overhead some suckers on the board here betting on it long-term.

$1413.05 / oz down $13.85 today.

 

[3chordcharlie]

I guess you could panic over inflation currently at 1.5% including food and energy, or 1.0% excluding it, with unemployment down to 8.9% (1% improvement over ~4-5 months), GDP 3%-4% quarterly, etc. Is gold on pace for $5000 yet btw? I overhead some suckers on the board here betting on it long-term.

Real inflation is way beyond 1.5%.

And the very notion of measuring inflation excluding food and energy is silly.

GDP at 3-4% is not quarterly; it's being compared to the same quarter, a year ago. 3-4% real growth would be raging out of control. 12-16% would be basically impossible.

Gold will reach any nominal price if monetary policy is left loose indefinitely.

Edit - Oh, and published unemployment figures are virtually meaningless due to exclusions and massaging.

 

[Genx87]

I am starting to question the govts ability to accurately gauge inflation. I am looking at 4.59\pound bacon, 6 dollar\pound chicken, 2.50\gal milk and other food stuffs rising in prices and nearly 4 dollar\gallon gasoline. These are major expenses that have gone up noticeably in the past 18 months. Yet they are trying to tell me inflation is 1.5%? Hard to believe.

 

[dmcowen674]

I am starting to question the govts ability to accurately gauge inflation.

I am looking at 4.59\pound bacon, 6 dollar\pound chicken, 2.50\gal milk and other food stuffs rising in prices and nearly 4 dollar\gallon gasoline.

These are major expenses that have gone up noticeably in the past 18 months.

Yet they are trying to tell me inflation is 1.5%? Hard to believe.

No way, you have to lying, the experts in here are paying half of everything you just posted, they live in Utopia USA.

 

[airdata]

Is gold on pace for $5000 yet btw? I overhead some suckers on the board here betting on it long-term.

$1413.05 / oz down $13.85 today.