[XBoxBoy]

[quote=esmith]How about we stop panicking and try to do some level-headed analysis.[/quote]

Nah the problem with that approach is that people are not level-headed and rational. If you learn nothing else from this recent housing bubble, learn that people are not rational, and that all economics that sits on top of the belief that people are rational acting agents is faulty.

Instead understand that as problems get harder to figure out, as the analysis gets tougher, we as people give up and rely on what our friends, neighbors and coworkers think. If our neighbors think that house prices only go up, then we believe that house prices only go up too. If your a CEO of a huge investment bank and if the other CEO’s at your club think that credit default swaps spread risk around making the world more safe, then you too believe that. If you’re the chairman of the federal reserve and all your academic buddies believe that lowering interest rates, printing money, and encouraging everyone to take on debt will solve all your problems, well then that’s what you believe too.

There’s no place for rational analysis here. It too much work! Much easier to just rely on what others think.

XBoxBoy

[XBoxBoy]

[quote=esmith]How about we stop panicking and try to do some level-headed analysis.[/quote]

Nah the problem with that approach is that people are not level-headed and rational. If you learn nothing else from this recent housing bubble, learn that people are not rational, and that all economics that sits on top of the belief that people are rational acting agents is faulty.

Instead understand that as problems get harder to figure out, as the analysis gets tougher, we as people give up and rely on what our friends, neighbors and coworkers think. If our neighbors think that house prices only go up, then we believe that house prices only go up too. If your a CEO of a huge investment bank and if the other CEO’s at your club think that credit default swaps spread risk around making the world more safe, then you too believe that. If you’re the chairman of the federal reserve and all your academic buddies believe that lowering interest rates, printing money, and encouraging everyone to take on debt will solve all your problems, well then that’s what you believe too.

There’s no place for rational analysis here. It too much work! Much easier to just rely on what others think.

XBoxBoy

[XBoxBoy]

[quote=esmith]How about we stop panicking and try to do some level-headed analysis.[/quote]

Nah the problem with that approach is that people are not level-headed and rational. If you learn nothing else from this recent housing bubble, learn that people are not rational, and that all economics that sits on top of the belief that people are rational acting agents is faulty.

Instead understand that as problems get harder to figure out, as the analysis gets tougher, we as people give up and rely on what our friends, neighbors and coworkers think. If our neighbors think that house prices only go up, then we believe that house prices only go up too. If your a CEO of a huge investment bank and if the other CEO’s at your club think that credit default swaps spread risk around making the world more safe, then you too believe that. If you’re the chairman of the federal reserve and all your academic buddies believe that lowering interest rates, printing money, and encouraging everyone to take on debt will solve all your problems, well then that’s what you believe too.

There’s no place for rational analysis here. It too much work! Much easier to just rely on what others think.

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]

So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.

[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]

I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.

As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]

So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.

[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]

I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.

As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]

So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.

[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]

I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.

As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]

So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.

[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]

I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.

As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]

So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.

[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]

I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.

As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)

XBoxBoy

[XBoxBoy]

[quote=OC Scam]But seriously what makes you think the Treasury will not default on those bonds at some point soon? Maybe you think the AMERO will save us?[/quote]

I’m not sure how someone who owns the printing press defaults on bonds denominated in dollars. The fed, can always add more dollars to their ledger and then spend them buying treasuries, which gives the treasury dept money to spend. I fail to see why or how they would default as long as they continued to do that. That’s the beauty of a fiat currency. Those who control the printing presses can make as much of it as they want.

If by default, you mean to imply that at some point in time the fed will not be able to get anyone to take the dollars they drop out of the helicopter, then I suppose you could call that a default. But I don’t see that happening anytime soon. China and lots of other foreigners are still buying up dollars to manipulate their currencies, and I don’t think that game ends anytime soon.

Or maybe you mean by default that at some point deflation will cease to be a concern, and inflation will come back, and then the fed will have to face the music. I could easily see that happening, but just not any time soon.

If by default, you mean the traditional definition, ie. the treasury simply refuses to pay back the bonds they have issued, I don’t see why they would do that. Care to explain what they would gain by doing that?

XBoxBoy

[XBoxBoy]

[quote=OC Scam]But seriously what makes you think the Treasury will not default on those bonds at some point soon? Maybe you think the AMERO will save us?[/quote]

I’m not sure how someone who owns the printing press defaults on bonds denominated in dollars. The fed, can always add more dollars to their ledger and then spend them buying treasuries, which gives the treasury dept money to spend. I fail to see why or how they would default as long as they continued to do that. That’s the beauty of a fiat currency. Those who control the printing presses can make as much of it as they want.

If by default, you mean to imply that at some point in time the fed will not be able to get anyone to take the dollars they drop out of the helicopter, then I suppose you could call that a default. But I don’t see that happening anytime soon. China and lots of other foreigners are still buying up dollars to manipulate their currencies, and I don’t think that game ends anytime soon.

Or maybe you mean by default that at some point deflation will cease to be a concern, and inflation will come back, and then the fed will have to face the music. I could easily see that happening, but just not any time soon.

If by default, you mean the traditional definition, ie. the treasury simply refuses to pay back the bonds they have issued, I don’t see why they would do that. Care to explain what they would gain by doing that?

XBoxBoy

[XBoxBoy]

[quote=OC Scam]But seriously what makes you think the Treasury will not default on those bonds at some point soon? Maybe you think the AMERO will save us?[/quote]

I’m not sure how someone who owns the printing press defaults on bonds denominated in dollars. The fed, can always add more dollars to their ledger and then spend them buying treasuries, which gives the treasury dept money to spend. I fail to see why or how they would default as long as they continued to do that. That’s the beauty of a fiat currency. Those who control the printing presses can make as much of it as they want.

If by default, you mean to imply that at some point in time the fed will not be able to get anyone to take the dollars they drop out of the helicopter, then I suppose you could call that a default. But I don’t see that happening anytime soon. China and lots of other foreigners are still buying up dollars to manipulate their currencies, and I don’t think that game ends anytime soon.

Or maybe you mean by default that at some point deflation will cease to be a concern, and inflation will come back, and then the fed will have to face the music. I could easily see that happening, but just not any time soon.

If by default, you mean the traditional definition, ie. the treasury simply refuses to pay back the bonds they have issued, I don’t see why they would do that. Care to explain what they would gain by doing that?

XBoxBoy

[XBoxBoy]

[quote=OC Scam]But seriously what makes you think the Treasury will not default on those bonds at some point soon? Maybe you think the AMERO will save us?[/quote]

I’m not sure how someone who owns the printing press defaults on bonds denominated in dollars. The fed, can always add more dollars to their ledger and then spend them buying treasuries, which gives the treasury dept money to spend. I fail to see why or how they would default as long as they continued to do that. That’s the beauty of a fiat currency. Those who control the printing presses can make as much of it as they want.

If by default, you mean to imply that at some point in time the fed will not be able to get anyone to take the dollars they drop out of the helicopter, then I suppose you could call that a default. But I don’t see that happening anytime soon. China and lots of other foreigners are still buying up dollars to manipulate their currencies, and I don’t think that game ends anytime soon.

Or maybe you mean by default that at some point deflation will cease to be a concern, and inflation will come back, and then the fed will have to face the music. I could easily see that happening, but just not any time soon.

If by default, you mean the traditional definition, ie. the treasury simply refuses to pay back the bonds they have issued, I don’t see why they would do that. Care to explain what they would gain by doing that?

XBoxBoy

[XBoxBoy]

[quote=OC Scam]But seriously what makes you think the Treasury will not default on those bonds at some point soon? Maybe you think the AMERO will save us?[/quote]

I’m not sure how someone who owns the printing press defaults on bonds denominated in dollars. The fed, can always add more dollars to their ledger and then spend them buying treasuries, which gives the treasury dept money to spend. I fail to see why or how they would default as long as they continued to do that. That’s the beauty of a fiat currency. Those who control the printing presses can make as much of it as they want.

If by default, you mean to imply that at some point in time the fed will not be able to get anyone to take the dollars they drop out of the helicopter, then I suppose you could call that a default. But I don’t see that happening anytime soon. China and lots of other foreigners are still buying up dollars to manipulate their currencies, and I don’t think that game ends anytime soon.

Or maybe you mean by default that at some point deflation will cease to be a concern, and inflation will come back, and then the fed will have to face the music. I could easily see that happening, but just not any time soon.

If by default, you mean the traditional definition, ie. the treasury simply refuses to pay back the bonds they have issued, I don’t see why they would do that. Care to explain what they would gain by doing that?

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]Maybe this is the last bullet?[/quote]

I don’t think this is the feds last bullet by any means. They can simply add bigger numbers in their ledger and buy as many bonds as they want. And that’s what they are clearly saying they are going to do. Not their last bullet at all.

XBoxBoy

[XBoxBoy]

[quote=The OC Scam]Maybe this is the last bullet?[/quote]

I don’t think this is the feds last bullet by any means. They can simply add bigger numbers in their ledger and buy as many bonds as they want. And that’s what they are clearly saying they are going to do. Not their last bullet at all.

XBoxBoy

[Author]

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