James Pethokoukis

Closing the budget gap

October 19, 2009

TaxVox tells us why the budget deficit is much worse that what the government is projecting:

Is Obama ignoring Wall Street?

October 1, 2009

This from Ed Yardeni, keying off a recent Charlie Gasparino’s column:

There is no one in the Obama administration like Robert Rubin, who had the ear of President Clinton. Rubin convinced Clinton that the Bond Vigilantes would riot if he pursued policies that would lead to a structural federal deficit, i.e., one that would widen despite a growing economy. So far, the Bond Vigilantes haven’t gone on a rampage despite projections of $10tn in deficits over the next 10 years. So it is no wonder that Obama’s political advisors are acting as though they’ve been handed a blank check by the bond market. However, the longer they ignore the economic advisors, the greater is the likelihood that the blank check will bounce.

The consequences of massive budget deficits

September 3, 2009

The Cleveland Fed gives the bad news:

First, without a correction on the spending side, more tax revenue will need to be raised, with the consequence of subjecting the economy to greater tax-associated inefficiencies.

Higher rates and refinancing

June 13, 2009

Fear of massive deficits and inflation may or may not be driving up interest rates, but the impact of the rate rise is not up for dispute. This from Barclays:

Does this explain rising bond yields?

June 8, 2009

This chart from Jim Glassman of JPMorgan makes an argument about seasonality:


Why Obama loves Bernanke’s big deficit warning

June 3, 2009

Ben Bernanke seemed to buy into the “bond vigilante” theory today in his House testimony as an explanation for the recent backup in long yields: