|
|
Post by steelpony10 on Apr 28, 2023 18:41:10 GMT
I imagine most have been through this already. en.wikipedia.org/wiki/1995–1996_United_States_federal_government_shutdowns Markets like stability. This isn’t it. It’s an annual game of chicken going back to when I saw the national debt was, OMG 60 billion! Maybe gird your loins, change into pants that wick moisture and get some cash together. This might tip off a recession. Thank you government of the people, an unknown onto itself. At least Putin p***es on someone else outside his country, mostly. |
|
|
|
Post by Chahta on Apr 28, 2023 18:44:36 GMT
I imagine most have been through this already. en.wikipedia.org/wiki/1995–1996_United_States_federal_government_shutdowns Markets like stability. This isn’t it. It’s an annual game of chicken going back to when I saw the national debt was, OMG 60 billion! Maybe gird your loins, change into pants that wick moisture and get some cash together. This might tip off a recession. Thank you government of the people, an unknown onto itself. Since THOSE people have discovered power, it has never been about "the people". |
|
|
|
Post by Capital on Apr 28, 2023 18:55:16 GMT
|
|
|
|
Post by steelpony10 on Apr 28, 2023 19:56:07 GMT
Chahta , I find the quality of candidates coming from the present educational systems going into all economic sectors to be declining along with the cultures worldwide. But you’re correct. Capital , I saw a long time ago the members of the Federal government held pretty conservative positions. But this is me posting so consider the source. I thought it was funny they generally weren’t as conservative with other peoples money though. What’s a government’s duties when no really big threats to national security exist and with few roads to fix. Maybe they’re Nazis to clear out in Canada.
|
|
|
|
Post by johnsmith on Apr 28, 2023 20:19:15 GMT
I'm still hoping and praying for a default.
I want to see fireworks.
I want the congress critters and all others to see the affects of this bullsh**!
Please default!
Shut the government down.
You want a government that can be drowned in a bathtub, do it.
Here's your chance.
|
|
|
|
Post by gman57 on Apr 28, 2023 21:19:44 GMT
I'm still hoping and praying for a default. I want to see fireworks. I want the congress critters and all others to see the affects of this bullsh**! Please default! Shut the government down. You want a government that can be drowned in a bathtub, do it. Here's your chance. I think this is one of those be careful what you wish for items. |
|
|
|
Post by roi2020 on Apr 29, 2023 3:23:17 GMT
The U.S. dollar is the preeminent global reserve currency.This manufactured crisis threatens the dollar's exalted status.
If the U.S. were to default on incurred debt, global repurcussions would be severe.
|
|
|
|
Post by johnsmith on Apr 29, 2023 10:27:24 GMT
The U.S. dollar is the preeminent global reserve currency.This manufactured crisis threatens the dollar's exalted status.
If the U.S. were to default on incurred debt, global repurcussions would be severe.
I think the dollar’s status as reserve currency is already threatened. The default will only accelerate the move away. This is completely the American regime’s fault. Shot the dollar in the foot, themselves. |
|
|
|
Post by steadyeddy on Apr 29, 2023 14:53:16 GMT
The U.S. dollar is the preeminent global reserve currency.This manufactured crisis threatens the dollar's exalted status.
If the U.S. were to default on incurred debt, global repurcussions would be severe.
I think the dollar’s status as reserve currency is already threatened. The default will only accelerate the move away. This is completely the American regime’s fault. Shot the dollar in the foot, themselves. Ironically, cheaper dollar (relative to other currencies) is good for our exports. |
|
|
|
Post by roi2020 on Apr 29, 2023 19:26:17 GMT
The U.S. dollar is the preeminent global reserve currency.This manufactured crisis threatens the dollar's exalted status.
If the U.S. were to default on incurred debt, global repurcussions would be severe.
I think the dollar’s status as reserve currency is already threatened. The default will only accelerate the move away. This is completely the American regime’s fault. Shot the dollar in the foot, themselves.
However, the dollar's position may continue to erode over time.
A government default would certainly accelerate this move as you say.
|
|
|
|
Post by yogibearbull on Apr 30, 2023 0:21:26 GMT
Dollar-diplomacy has hurt the dollar. Investors have also gotten used to $100+ dollar index ($USD at StockCharts, DXY elsewhere, e.g. DX-Y.NYB at Yahoo Finance). It has been that high since early-2022. It's more reasonable range would be 80s-90s; it would be depressed in 70s. Some aspects of the economy benefit when dollar is high (foreign travel, imports, domestic companies), others when it's low (exports, multinationals). But neither too high, nor loo low is good. Dollar index is based now on a fixed mix of 6 currencies, 5 European, 1 Asian. In some contexts, the trade-weighted dollar is used. stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=0&dy=0&id=p28808904004 |
|
|
|
Post by archer on Apr 30, 2023 4:44:46 GMT
If the only thing that keeps the from default is raising the debt ceiling, the value is quite hollow. Global repercussions would have already happened long ago if other countries weren't so willing to go along for the ride.
|
|
|
|
Post by roi2020 on Apr 30, 2023 7:12:32 GMT
"The political drama over the Treasury debt limit is suddenly heating
up. With April tax receipts coming in weaker than expected, at least so
far, it appears that the X-date, when the Treasury will run out of the
cash needed to pay the government’s bills on time, may hit as soon as
early June. House Speaker Kevin McCarthy’s recent unveiling of proposed
legislation to increase the limit is thus none too soon. In exchange for
increasing the debt limit just enough so that it will not be a problem
again until about this time next year, the Speaker wants to
significantly cut discretionary spending over the next decade, impose
stricter work requirements on healthcare, food and other assistance for
low-income households, and roll back much of the Biden’s
administration’s agenda on climate change and student lending. In this
note, we assess the macroeconomic consequences of the Speaker’s debt
limit legislation."
www.moodysanalytics.com/-/media/article/2023/debt-limit-drama.pdf
|
|
|
|
Post by Fearchar on Apr 30, 2023 11:50:14 GMT
Thanks roi2020, Great article by Moody's. Well worth reading. Credit default swaps have sharply risen yet again. Looks scary. However at 155, that corresponds to less than 2% probability of US default.  That said, I'm still concerned with the risk of a major market sell off within the next 6 months. It could be adverted if the FED were to cut rates, but I can't see them doing that. |
|
|
|
Post by steadyeddy on Apr 30, 2023 13:26:28 GMT
Given the polarized political world we live in, I fully expect the default drama to drag on for a few weeks - but in the end a resolution will be reached. TINA - There is no alternative.
I intend to buy more on choppiness - just be bold when others are afraid.
|
|
|
|
Post by newtecher on Apr 30, 2023 15:19:07 GMT
A few-percent probability of technical default (delay in payments) seems reasonable. The negotiations with Biden will certainly happen but there is a small chance of something breaking down at the last moment. The press coverage seems to follow the same pattern as in the previous cases (2011 and 2013) since the increasingly shrill press coverage and the market reaction are probably necessary to create sufficient pressure on McCarthy/GOP and the Biden/Democrats to make a budget deal.
|
|
|
|
Post by steadyeddy on Apr 30, 2023 23:45:39 GMT
|
|
|
|
Post by yogibearbull on May 1, 2023 0:30:02 GMT
I don't typically watch videos but watched this one. Ramin Nakisa runs PensionCraft series from the UK and did so-so research. He explained the reasons that the deposits are leaving banks for T-Bills and m-mkt funds. His concern is about T-Bills and m-mkt funds in an actual US default scenario. He notes that a non-default scenario can be handled without issues. I also noted 2 omissions - that may be OK for a non-US-based commentator: 1. He said that people can buy T-Bills from Treasury Direct, OR buy m-mkt funds that hold T-Bills and Fed reverse repos. BUT, there is also a direct and preferred way - to buy T-Bills through brokerages. This isn't a secret for the US-based investors, and most do buy them via brokerages. 2. He said that the US m-mkt funds can impose gates, BUT he didn't point out that there are 3 US types - government m-mkt funds (unlikely or least likely to impose gates/fees), prime-retail m-mkt funds (gates/fees can be imposed without much prior notice), prime-institutional (possible gates/fees + floating NAVs). Earlier, he noted in passing the asset levels for government vs prime m-mkt funds, but he didn't note differences when he discussed gates later on. Anyway, I won't do anything based on THIS video. Many others and I have noted the wide 1m-3m T-Bill spreads here and elsewhere. Basically, the institutions are buying 1m and 2m T-Bills with maturities BEFORE the drop-dead debt-ceiling date, and shorting/selling 3m T-Bills that have maturities AFTER the drop-dead date. I have m-mkt funds (so, very short duration is covered) AND I am buying 3m T-Bills with attractive yields (ignoring the US default risk). |
|
|
|
Post by catdog on May 1, 2023 1:19:17 GMT
In Yogi I trust
Catdog
|
|
|
|
Post by Chahta on May 1, 2023 2:14:26 GMT
Remember the Y2K scare?
So what is the bottom line? What is the answer. People we are in deep doo doo. Can no one see that the $32t in debt can’t really become $40t and beyond. Where does it stop? How does it stop? This is beyond a joke. My answer is maybe the 20 something making $75k will wake up and rebel once their entire paycheck is confiscated to pay debt and my SS. Because it better damn well be paid or there will be mutiny.
|
|
sgra
Lieutenant
Posts: 57
|
Post by sgra on May 1, 2023 2:50:06 GMT
AND I am buying 3m T-Bills with attractive yields (ignoring the US default risk). Me too. Least of my worries is T-Bill default. |
|
|
|
Post by steadyeddy on May 1, 2023 2:53:03 GMT
I don't typically watch videos but watched this one. Ramin Nakisa runs PensionCraft series from the UK and did so-so research. He explained the reasons that the deposits are leaving banks for T-Bills and m-mkt funds. His concern is about T-Bills and m-mkt funds in an actual US default scenario. He notes that a non-default scenario can be handled without issues. I also noted 2 omissions - that may be OK for a non-US-based commentator: 1. He said that people can buy T-Bills from Treasury Direct, OR buy m-mkt funds that hold T-Bills and Fed reverse repos. BUT, there is also a direct and preferred way - to buy T-Bills through brokerages. This isn't a secret for the US-based investors, and most do buy them via brokerages. 2. He said that the US m-mkt funds can impose gates, BUT he didn't point out that there are 3 US types - government m-mkt funds (unlikely or least likely to impose gates/fees), prime-retail m-mkt funds (gates/fees can be imposed without much prior notice), prime-institutional (possible gates/fees + floating NAVs). Earlier, he noted in passing the asset levels for government vs prime m-mkt funds, but he didn't note differences when he discussed gates later on. Anyway, I won't do anything based on THIS video. Many others and I have noted the wide 1m-3m T-Bill spreads here and elsewhere. Basically, the institutions are buying 1m and 2m T-Bills with maturities BEFORE the drop-dead debt-ceiling date, and shorting/selling 3m T-Bills that have maturities AFTER the drop-dead date. I have m-mkt funds (so, very short duration is covered) AND I am buying 3m T-Bills with attractive yields (ignoring the US default risk). , as always thanks for a comprehensive post. It makes a lot of sense. |
|
|
|
Post by steadyeddy on May 1, 2023 3:01:34 GMT
Remember the Y2K scare? So what is the bottom line? What is the answer. People we are in deep doo doo. Can no one see that the $32t in debt can’t really become $40t and beyond. Where does it stop? How does it stop? This is beyond a joke. My answer is maybe the 20 something making $75k will wake up and rebel once their entire paycheck is confiscated to pay debt and my SS. Because it better damn well be paid or there will be mutiny. , bottom line is that if you are holding cash in MM funds that are bloating with assets there is a non-zero risk of a run on MM funds which could lead to gates and fees. As YBB noted, federal MM funds are safer than the other 2 types. None-the-less, the federal MM funds also have a non-zero risk of gates and fees. My 2 cents: regional bank dominos will continue to fall - and consumers will inflate MM assets further more since the big banks pay nothing on deposits they are holding. Maybe the Fed and FDIC can push the JPM/BAC etc to pay respectable interest on deposits? So, the answer is lower short-term interest rates. |
|
|
|
Post by archer on May 1, 2023 3:04:56 GMT
With stocks, we have a history to go on to assess when valuations and sentiment are dangerously high, but for the debt, what do we have to go on? Do we have a history that shows a limit as to how high debt can go before catastrophe? I understand the seems ridiculous in principal, but it is hard to say where the breaking point will be assuming there is one.
|
|
|
|
Post by johntaylor on May 1, 2023 17:00:04 GMT
Inflation and/or partial default as the ways out?
|
|
|
|
Post by retiredat48 on May 1, 2023 17:44:12 GMT
With stocks, we have a history to go on to assess when valuations and sentiment are dangerously high, but for the debt, what do we have to go on? Do we have a history that shows a limit as to how high debt can go before catastrophe? I understand the seems ridiculous in principal, but it is hard to say where the breaking point will be assuming there is one. ,...my RECOLLECTION of academic studies of various smaller countries, is that they tend to default when debt to GDP reaches 150% or more. Google says current USA debt to gdp ratio is 123%. But note, smaller countries do not own printing presses. R48 |
|
|
|
Post by johnsmith on May 18, 2023 15:48:03 GMT
I am hoping that the debt ceiling is not raised, I want to see some chaos!
brad delong has some stuff to say on this:
correction to the above:
read both.
|
|
|
|
Post by Capital on May 19, 2023 19:35:45 GMT
I have come to the conclusion that invoking the 14th Amendment may be the only way out of this debt limit self-imposed crisis Congress created early in the last century.
At least then this issue can be litigated. I think the concept of the debt limit is unconstitutional.
If the Courts agreed, and this would probably end up in the Supreme Court, then we would be rid of this thing.
Too much political and societal capital is spent on this in my opinion.
|
|
|
|
Post by Chahta on May 20, 2023 1:56:35 GMT
Well at least the debt is discussed once a year then forgotten. I am sure they would like to eliminate the limit and put no limit on how high the debt can go. I think the debt limit should be raised to $100t and be done with it.
|
|
|
|
Post by archer on May 20, 2023 4:00:08 GMT
Well at least the debt is discussed once a year then forgotten. I am sure they would like to eliminate the limit and put no limit on how high the debt can go. I think the debt limit should be raised to $100t and be done with it. The increasing interest on the debt might reach $100T before you know it. I wish they would just pay it off. I would be happy to pay additional taxes on income over $200K. ...Well, I mean if I had an income.  |
|
