Comments on: What Treasury’s thinking http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: DetroitDan http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17554 Mon, 23 Aug 2010 02:33:32 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17554 Treasury doesn’t borrow, as implied by dllahr. Treasury bonds are not the same as corporate bonds. Econ 101 — if it were taught correctly.

On a related note, which is more ridiculous — the notion of a bond bubble, or the notion that we can’t have a double-dip because the yield curve is so steep?

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By: FelixSalmon http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17541 Sat, 21 Aug 2010 16:09:23 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17541 Dan, Treasury’s view of its own debt is that the deficit needs to be brought down over the long term, but that’s doable. In the short to medium term, rates are low, so it actually makes sense to borrow at cheap rates now in order to get help the economy moving again and generating lots of tax revenue in the future.

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By: DanHess http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17527 Fri, 20 Aug 2010 21:01:47 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17527 @davidshor —

I never said anything about consumer borrowing or Corporate borrowing.

Treasury said they don’t worry about a bond bubble and apparently diverted the conversation to Corporates. Nobody is worried about Corporates.

Folks are worried about Sovereign debt. My question to Felix, which he still has not answered yet was, what does Treasury think or say about its own debt?

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By: davidshor http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17522 Fri, 20 Aug 2010 17:24:09 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17522 DanHess,

You’re confusing consumer borrowing with Corporate borrowing. The current trend among corporations is not to spend and borrow too much, but to hold enormous cash reserves. They don’t want to spend money expanding capacity until the economy recovers. But the problem is, their refusal to spend money is a major cause of the recession.

A “bond-bubble”, is where the market systemically under-prices bond yields, incentivising corporate borrowing and spending. I don’t think we’re in such a bubble. But if we were, it would be great! It would allow us to get out of our chicken and the egg problem.

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By: DanHess http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17500 Fri, 20 Aug 2010 04:28:44 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17500 @dllahr —

Your insult covers such luminaries as Warren Buffett, Bill Gross, Jeremy Grantham, John Paulson, Mohammad El Erian and many other thinkers much smarter than you, all of whom have questioned the sustainability of American borrowing.

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By: dllahr http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17499 Fri, 20 Aug 2010 03:29:50 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17499 “Nearly every American has fears about the sustainability of American debt and borrowing.”

No, wrong. Only the ones who don’t understand macro and haven’t studied the causes of deficits do. Those are the majority, but not “nearly every American” is that ignorant.

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By: dedalus http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17498 Fri, 20 Aug 2010 03:10:56 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17498 If “Treasury would very much like to make sure that house prices don’t fall any more than they have already”, then the Greenspan Put is still very much alive & well.

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By: mhnec http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17482 Thu, 19 Aug 2010 20:32:10 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17482 “And yes, Treasury would very much like to make sure that house prices don’t fall any more than they have already.”

Felix, is this goal really feasible? Housing inventory is again steadily increasing (http://tinyurl.com/23c2k9m) which should renew pressure on house prices.

What more can Treasury do to prevent further deterioration in house prices?

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17480 Thu, 19 Aug 2010 19:49:33 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17480 Felix… this was one of the best posts since your return from Alaska!

Thanks!

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By: tinbox http://blogs.reuters.com/felix-salmon/2010/08/19/what-treasurys-thinking/comment-page-1/#comment-17466 Thu, 19 Aug 2010 16:39:12 +0000 http://blogs.reuters.com/felix-salmon/?p=5012#comment-17466 Can you even imagine a country where a government operates routinely on “deep background” and the people are well-served by that government–or that press?

I can’t. Tell me, what would that country be like?

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