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What I don’t get about the new “refi our debt” theory
Posted on 4/6/25 at 12:22 pm
Posted on 4/6/25 at 12:22 pm
It seems the latest explanation for why Trump tanked our stock market is because we have a lot of debt that we need to refi and it was a triple bank shot to really drive rates down for that.
When equities decline people flee to safety and the biggest of those being treasury bonds. The increased demand creating upward pressure on the bond clearing rates not downward so will have the opposite effect of what you’re saying. If anything tanking the stock market makes new debt more expensive not less
Edit nm I was thinking about it backwards
When equities decline people flee to safety and the biggest of those being treasury bonds. The increased demand creating upward pressure on the bond clearing rates not downward so will have the opposite effect of what you’re saying. If anything tanking the stock market makes new debt more expensive not less
Edit nm I was thinking about it backwards
This post was edited on 4/6/25 at 12:34 pm
8
Posted on 4/6/25 at 12:23 pm to DavidTheGnome
quote:
why Trump tanked our stock market
That’s not how this works.gif
Posted on 4/6/25 at 12:27 pm to DavidTheGnome
We’ll be able to bail out our banks with low interest loans this time
Posted on 4/6/25 at 12:28 pm to DavidTheGnome
It’s because people who actually understand our economic system have been saying we can’t afford our own national debt at current interest rates, and they’ve been saying it for a couple years now.
It’s why we can never have a “Volker” type Fed ever again.
The thought is already out there, so the Qcrew can latch onto this as the real 4d chess.
The thing here is that it’s actually the first theory they’ve had that’s grounded in reality.
Interest rates HAVE to come down. Even if the debt wasn’t the issue, they would still HAVE to come down to finance manufacturing moving back to the states.
Here’s the thing:
The companies that have been hardest hit from the tariff talk would have to spend the most money on reshoring activities. But they’ve lost billions from the stock crash.
How is a company, whose main play right now is to cut costs and lay off staff, supposed to finance new plants in a country with higher labor costs? They need lower interest rates.
It’s why we can never have a “Volker” type Fed ever again.
The thought is already out there, so the Qcrew can latch onto this as the real 4d chess.
The thing here is that it’s actually the first theory they’ve had that’s grounded in reality.
Interest rates HAVE to come down. Even if the debt wasn’t the issue, they would still HAVE to come down to finance manufacturing moving back to the states.
Here’s the thing:
The companies that have been hardest hit from the tariff talk would have to spend the most money on reshoring activities. But they’ve lost billions from the stock crash.
How is a company, whose main play right now is to cut costs and lay off staff, supposed to finance new plants in a country with higher labor costs? They need lower interest rates.
This post was edited on 4/6/25 at 5:12 pm
Posted on 4/6/25 at 12:28 pm to DavidTheGnome
Your theory is people fleeing to bonds will increase rates?
Posted on 4/6/25 at 12:29 pm to AlteriorMotive
quote:
We’ll be able to bail out our banks with low interest loans this time
Sadly, this wouldn’t surprise me.
Posted on 4/6/25 at 12:29 pm to AlteriorMotive
quote:
We’ll be able to bail out our banks with low interest loans this time
How so? Interest on treasuries will go up as a result not down. New debt will be more expensive not less.
Posted on 4/6/25 at 12:29 pm to Pendulum
quote:
Your theory is people fleeing to bonds will increase rates?
Quickly scanning his post history, I believe that’s exactly what this person would think.
Posted on 4/6/25 at 12:30 pm to Pendulum
quote:
Your theory is people fleeing to bonds will increase rates?
I mean it’s not really a theory it’s what happens
Posted on 4/6/25 at 12:32 pm to DavidTheGnome
First of all, you didn't come up with this theory. Secondly, whoever did is an idiot.
Posted on 4/6/25 at 12:33 pm to DavidTheGnome
Actually nm I had it backwards lol
Posted on 4/6/25 at 12:33 pm to DavidTheGnome
quote:
I mean it’s not really a theory it’s what happens
So if I have millions of lenders looking to put excess capital to work…and I’m a borrower…the rate will increase with all those lenders fighting to loan me money?
Posted on 4/6/25 at 12:35 pm to DavidTheGnome
So yesterday the bond market was taking 100 bucks for a promise to return 4% over 10yrs, and now that there's more people lining up to give the government 100 bucks, the bond market will react by giving them an even better rate?
Posted on 4/6/25 at 12:35 pm to DavidTheGnome
You need to learn the relationship between bond values and interest rates.
Posted on 4/6/25 at 12:35 pm to DavidTheGnome
The most puzzling part of it is that most of the debt is already very low interest.
Posted on 4/6/25 at 12:36 pm to DavidTheGnome
Who knows anymore
This post was edited on 4/6/25 at 12:40 pm
Posted on 4/6/25 at 12:36 pm to DavidTheGnome
quote:
It seems the latest explanation for why Trump tanked our stock market is because we have a lot of debt that we need to refi and it was a triple bank shot to really drive rates down for that.
Honestly, I dont understand how you remember to breathe! Lol
Ot would do zero good trying to explain, it would never get thru your TDS filter.
Its ok lil short sighted person. The majority of voters understand. You continue to stand on the sidelines and whine.
Thats all people like you are good for.
Posted on 4/6/25 at 12:38 pm to Tiger4Ever
quote:
So if I have millions of lenders looking to put excess capital to work…and I’m a borrower…the rate will increase with all those lenders fighting to loan me money?
Lol.... save your efforts, these TDS fools will never, ever, ever, ever, concede that Trump is bringing America back! Good times ahead.
Posted on 4/6/25 at 12:39 pm to DavidTheGnome
quote:
When equities decline people flee to safety and the biggest of those being treasury bonds. The increased demand creating upward pressure on the bond clearing rates not downward
I am not sure I agree with thesis that money fleeing to treasuries and it has material impact on yields US new issuances.
That said I don't understand what your saying. If more dollars are chasing existing bonds as the seller the yield I have to give up goes down
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