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(former)FormerSanDiegan
ParticipantDo you read the data the same way?
Yep.
Dumping US treasuries, slight pick up in gov’t agency bonds (I wouldn’t go there), and acceleration into equities and corporate bonds.ParticipantGood topic jg… just trying to figure out where the assets will flow so that I can make lemonade from these lemons.
ParticipantGood topic jg… just trying to figure out where the assets will flow so that I can make lemonade from these lemons.
Participantjg – I thought that the danger was that the foreign holders of our debt would sell these bonds, putting downward pressure on bond prices (and upward pressure on rates).
For the bond collapse to happen the foreign holders have to sell (presumably to put the assets to work somewhere else) or simply stop putting new assets into US$-denominated bonds. If they don’t deploy these here and these funds would have to go somewhere. Wouldn’t they ?
Rustico – Money can go in/out of circulation. Effectively being created or destroyed. For example, US stock holdings dropped dramatically in value in 2000-2002. The only value preserved were the relatively small amounts that were sold at/near the top. Many $ in stock value were essentially eliminated from the planet, at least until central banks started pumping up the money supply.
Participantjg – I thought that the danger was that the foreign holders of our debt would sell these bonds, putting downward pressure on bond prices (and upward pressure on rates).
For the bond collapse to happen the foreign holders have to sell (presumably to put the assets to work somewhere else) or simply stop putting new assets into US$-denominated bonds. If they don’t deploy these here and these funds would have to go somewhere. Wouldn’t they ?
Rustico – Money can go in/out of circulation. Effectively being created or destroyed. For example, US stock holdings dropped dramatically in value in 2000-2002. The only value preserved were the relatively small amounts that were sold at/near the top. Many $ in stock value were essentially eliminated from the planet, at least until central banks started pumping up the money supply.
ParticipantMad Monk/FSD, it looks like the Chinese and oil money is going to FNMA/GNMA bonds, U.S. corporate bonds, and U.S. stock market (lines 6-8, 11-13):
http://www.treas.gov/press/releases/hp460.htm
When the meltdown happens, it’s going to be fun.
But where will they put the proceeds of their sales of these assets when they finally stop accumulating and start selling ? That’s what I want to know.
Euro bonds were mentioned as a possibility above.ParticipantMad Monk/FSD, it looks like the Chinese and oil money is going to FNMA/GNMA bonds, U.S. corporate bonds, and U.S. stock market (lines 6-8, 11-13):
http://www.treas.gov/press/releases/hp460.htm
When the meltdown happens, it’s going to be fun.
But where will they put the proceeds of their sales of these assets when they finally stop accumulating and start selling ? That’s what I want to know.
Euro bonds were mentioned as a possibility above.ParticipantGee, I sure hope they aren’t selling those treasuries to buy U.S. real estate.
Trillion-dollar question: Where will the money go ?ParticipantGee, I sure hope they aren’t selling those treasuries to buy U.S. real estate.
Trillion-dollar question: Where will the money go ?ParticipantIf anyone here can predict the future direction of interest rates, there’s a 7-figure job waiting for you in Manhattan.
ParticipantIf anyone here can predict the future direction of interest rates, there’s a 7-figure job waiting for you in Manhattan.
ParticipantIt took the Union Tribune 5 days to catch up and finally write about the rate hikes. What I meant about erie quiet is that news outlets didn’t even know the rate hikes happened. They all claim to have been “shocked” by the quick hike.
Maybe the U-T ignored the story, but the U-T does not equal the media. The interest rate spike was the top story on CNBC. I was sick at home on Monday and that’s all they could yammer about. Also, CNN.com covered it at great length, along with other media outlets such as the Wall Street Journal.
ParticipantIt took the Union Tribune 5 days to catch up and finally write about the rate hikes. What I meant about erie quiet is that news outlets didn’t even know the rate hikes happened. They all claim to have been “shocked” by the quick hike.
Maybe the U-T ignored the story, but the U-T does not equal the media. The interest rate spike was the top story on CNBC. I was sick at home on Monday and that’s all they could yammer about. Also, CNN.com covered it at great length, along with other media outlets such as the Wall Street Journal.
ParticipantI agree with n_s_r, this started almost 2 years ago in San Diego. This run-up in rates is just the accelerant that will enhance the on-going process.
The quiet behind this increase is very eerie.
I don’t understand this statement either. The recent run-up in bond rates has been the number 1 issue in financial media over the past week. -
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