Comments on: Adventures with yield curves, debt-ceiling edition http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/ 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: winstongator http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/comment-page-1/#comment-29153 Mon, 01 Aug 2011 19:36:47 +0000 http://blogs.reuters.com/felix-salmon/?p=9165#comment-29153 You need to mention prices and not yields. Someone could reasonably think that going from 0.08% to 0.16% is a doubling of yield! However, the price difference on $1000 nominal 1-month bond from 0.08% to 0.16% is 7 CENTS. Think about if you have $1000 in your pocket, of various denomination bills and coins. Do you notice $0.07 lost? There may be some arbitrage/interest rate hedge trade that could yield some profit using massive leverage, but I dont’ see any practical importance in 1-month yields moving from .08% to .16%.

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By: Greycap http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/comment-page-1/#comment-29111 Sun, 31 Jul 2011 12:25:33 +0000 http://blogs.reuters.com/felix-salmon/?p=9165#comment-29111 GRRR:much better chart! Felix should scrap his and use yours.

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/comment-page-1/#comment-29110 Sun, 31 Jul 2011 10:33:06 +0000 http://blogs.reuters.com/felix-salmon/?p=9165#comment-29110 This “crisis” was manufactured by the “rebirth” of my once great party… and I type that with the maximum possible level of spite. After spending money at a pace and scale never before seen while in control of the house, the senate, and the presidency… after my party cut taxes on the eve of a 10 year war of our choising… NOW we need to hold the line on the debt? This would be comical if not for the consequences which are comming.

I can say with absolute confidence that this crisis of choice will NOT be responsible for the loss of our AAA credit rating and the higher rates the could result. Consider the difference between whatever small trigger releases an avalanche and the underlying conditions necessary for an avalanche to take place. It’s not the last straw that breaks the camels back… that camel wasn’t going to make it to far even before that one last straw.

The United States will not lose our AAA rating because of the circus we’re seeing this weekend in Washington. We will (and should) lose that highest rating because we are a nation which cut taxes just a few years prior to the onset of the baby boom hitting entitlement eligibility.

We are a nation that knew we could not afford the promise of a roughly 20 year goverment subsidized vacation for all citizens… yet instead of making gradual changes to reflect the mathmatical realities of modern longevity… we passed another new mega-benifit with the percription drug bill.

We will lose are AAA credit rating… but not because of anything that happened in the last 6 months.

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By: TomLindmark http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/comment-page-1/#comment-29104 Sun, 31 Jul 2011 01:14:50 +0000 http://blogs.reuters.com/felix-salmon/?p=9165#comment-29104 “And this I think is what we’re really seeing in the yield curve. Never mind twitches at the very short end — look at the speed with which long-term rates are going down. That’s a sign of pessimism about long-term U.S. growth — an indication that Congressional failure to raise the debt ceiling will hobble the economy for the next decade. Thanks, guys.”

Reaching a bit here aren’t you? There could be any number of reasons that yields are falling. One could argue just as easily that yields should rise as a hobbled economy will cause Congress to throw more money at the problem and further exacerbate the deficit problem. Or one could argue that in failure the bond vigilantes see a real solution to long-term fiscal problems arising from the ashes and so see a buying opportunity. Or one could posit any number of other explanations for falling rates. But that would be pure speculation.

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By: GRRR http://blogs.reuters.com/felix-salmon/2011/07/30/adventures-with-yield-curves-debt-ceiling-edition/comment-page-1/#comment-29094 Sat, 30 Jul 2011 15:54:27 +0000 http://blogs.reuters.com/felix-salmon/?p=9165#comment-29094 On the debt ceiling deadline: If Reid’s plan incorporates McConnell’s ideas, Democrats will have now FULLY – not partially but 100% – capitulated to Republicans. It stinks to high hog heaven, and House Republicans will still vote against it. Reid might even see a mini party revolt of his own.

On the yield curves: It feels as though you needed a second chart to demonstrate what’s going on with the yields: http://goo.gl/VMEs9

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