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Started By
Message
re: Yellen's failure to lock in cheap debt was the worst mistake in Treasury history
Posted on 11/1/23 at 8:27 am to SloaneRanger
Posted on 11/1/23 at 8:27 am to SloaneRanger
quote:
They are. Lots of banks and other institutions bought long term treasuries at low rates. In a matter of a few years they have seen the value of what they bought plummet.
You mean like Silicon Valley Bank?
1
Posted on 11/1/23 at 8:29 am to NC_Tigah
When you stop looking at things as a “mistake” and ask yourself “was this intentional”, things will become clearer…
Posted on 11/1/23 at 8:45 am to NC_Tigah
Posted on 11/1/23 at 8:48 am to TrueTiger
quote:
The Treasury chief should have issued more long-term government debt at low interest rates, he said.
Wouldn't the value of these have just crashed as interest rates rose causing more widespread institutional unrealized losses? Like what we saw with the bank failures earlier this year and why so many banks have unrealized losses at the moment? Cuz new treasuries at a higher yield are more valuable and tradable than the abundant low yield treasuries so many are holding and cant liquidate?
This post was edited on 11/1/23 at 9:01 am
Posted on 11/1/23 at 8:57 am to boosiebadazz
quote:
How is degrading the full faith and credit of the United States, the bedrock of the current financial system, the same as issuing longer-term bonds at lower rates? I don’t see the connection here. Connect the dots for us.
Oh look, the progressive doesn’t understand economics
Posted on 11/1/23 at 9:04 am to Open Your Eyes
What incentive would bond holders have to accept less than they’re contractually obligated to receive? What was Trump’s leverage other than threatening default? And negotiating with current holders is different than whether Yellen should have issued new debt and locked in low rates.
I’m not seeing the link between the two but I trust you’re going to show me
I’m not seeing the link between the two but I trust you’re going to show me
Posted on 11/1/23 at 9:14 am to NC_Tigah
quote:
... Experts also described Mr. Trump’s debt refinancing proposal as fanciful, saying there was no reason to think America’s creditors would accept anything less than 100 cents on the dollar, regardless of Mr. Trump’s deal-making prowess.
No they wouldn’t unless they needed th Ed money, but who knows. Many countries might take 99 cents in the dollar if they needed the money bad. What dies it hurt to ask.
Posted on 11/1/23 at 9:17 am to NC_Tigah
quote:
Renegotiation and/or restructuring has nothing whatsoever to do with faith, credit, or default. E.g., At a time when the EU went to negative rates, the US could have severely limited public shortterm instrument offerings, while overborrowing longterm. In intragov issues, we had significant options as well. The "default" and "full faith and credit" was "drink bleach" level bullshite.
Renegotiating and agreeing to terms agreeable to both sides and paying the loans back in full is not hurting our credit.
Posted on 11/1/23 at 9:22 am to TigerEyeGuy
quote:Not if the institutions performed appropriate risk assessment. If not, the instrument term is almost irrelevant anyway.
Wouldn't the value of these have just crashed as interest rates rose causing more widespread institutional unrealized losses? Like what we saw with the bank failures
Posted on 11/1/23 at 9:29 am to NC_Tigah
“Mistake”
Riiiiiiiiiight
Riiiiiiiiiight
Posted on 11/1/23 at 9:31 am to NC_Tigah
Wonder which demographic benefits from the mistakes of a Yellen?
Posted on 11/1/23 at 10:39 am to NC_Tigah
quote:
• The Treasury chief should have issued more long-term government debt at low interest rates, he said.
Or maybe had the ba... err... eggs... to tell Congress they will have to learn to restrain their fricking spending.
Posted on 11/1/23 at 10:45 am to boosiebadazz
quote:
What incentive would bond holders have to accept less than they’re contractually obligated to receive?
Like any bond holder they might want to exit the trade and cash out before maturity for an infinite number of reasons.
quote:
What was Trump’s leverage other than threatening default?
Sounds like he was actively seeking bond holders that wanted to cash out. Not forcing them.
Posted on 11/1/23 at 10:49 am to Diamondawg
Yeah, she also said we would have no problem financing two wars.
Posted on 11/1/23 at 10:50 am to Bass Tiger
We have to go through a recession unless most people are happy with the current situation
Too much Covid money, overheated economy and there has to be a tradeoff.
Too much Covid money, overheated economy and there has to be a tradeoff.
Posted on 11/1/23 at 10:54 am to NC_Tigah
Mnunchin could have issued longer term bonds too---Trump was spending like crazy.
Yellen has been wrong not too but Mnunchin was just as wrong.
Also if the government actually operated at a surplus the Treasury could go into the market and buy the lower yield long term bonds at a discount to face value.
Yellen has been wrong not too but Mnunchin was just as wrong.
Also if the government actually operated at a surplus the Treasury could go into the market and buy the lower yield long term bonds at a discount to face value.
This post was edited on 11/1/23 at 10:57 am
Posted on 11/1/23 at 11:01 am to I B Freeman
quote:
Trump was spending like crazy.
Prior to COVID if he was spending like crazy he was paying down debt. The Federal Reserve balance sheet was winding down prior to COVID. I.e., tightening...prior to COVID one trillion was taken out of the money supply. The FR was tightening and we were still growing at a 3% rate.
Posted on 11/1/23 at 11:48 am to NC_Tigah
Yellen is not the sharpest tool in the shed and she's more interested in Wokeness than good financial sense.
Posted on 11/1/23 at 4:48 pm to boosiebadazz
quote:Ask SVB.
What incentive would bond holders have to accept less than they’re contractually obligated to receive?
There are many many reasons a lender might desire to vacate a fixed position.
Posted on 11/1/23 at 4:58 pm to NC_Tigah
These two articles are two different things.
Hellen refinancing debt when it matures for longer duration bonds at lower interest rates is what the first article is about….and it’s 100% accurate. Lock in lower rates for longer terms.
The Trump piece sounds like trying to get bond holders to accept less than 100% of the face amount when it matures or forcing them to exchange prior to maturity….which will not happen nor should it.
Hard to tell with journalists writing pieces about shite they don’t understand.
Hellen refinancing debt when it matures for longer duration bonds at lower interest rates is what the first article is about….and it’s 100% accurate. Lock in lower rates for longer terms.
The Trump piece sounds like trying to get bond holders to accept less than 100% of the face amount when it matures or forcing them to exchange prior to maturity….which will not happen nor should it.
Hard to tell with journalists writing pieces about shite they don’t understand.
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