"Raise the Debt Ceiling" - Pimco

Discussion in 'Politics' started by Toro, Jul 14, 2011.

  1. Toro
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    Toro Diamond Member

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    The head of the world's largest bond fund is telling the politicians to raise the debt limit unconditionally.

    Warning to Washington: Don’t mess with the debt ceiling - The Washington Post
     
  2. Ravi
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    Ravi Diamond Member

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    Well, that's it then. Business owners are also saying the same thing.

    The Republicans are going to be outcasts if they piss off their funders.
     
  3. Avorysuds
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    Avorysuds Gold Member

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    Cut and balance the budget or default.

    I don't give a shit what these fools have to say.
     
  4. Valerie
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    Valerie Gold Member

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    Why Wall Street doesn't seem worried about default - Yahoo! Finance
     
  5. Trajan
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    Trajan conscientia mille testes

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    Oh, so now Pimpco and businessmen are to be heeded? I see....:eusa_hand:
     
  6. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Last edited: Jul 14, 2011
  7. Toro
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    Toro Diamond Member

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    Other reasons why Treasury securities have risen in price;

    - The market doesn't believe that the US will default.
    - Everyone is worried about Italy right now. The debt ceiling is three weeks away.
    - And this

    The Real Reason The Treasury Market Isn't Freaking Out Over The Debt Ceiling

    IOW, a default will create a tremendous panic in the financial markets and a slowing of the economy, neither of which could be construed as a "good" thing. This will cause a rush to buy Treasuries.

    Maybe. I'm not so sure. The question we have been pondering is "What happens when riskless assets become risky?" We don't know the answer to that question. In the meantime, gold will go through the roof. Hooray for me!
     
  8. Toro
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    Toro Diamond Member

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    You've got it backwards Frank, kind of like the "Hoover caused the Depression by being a statist" thing.

    Pimco would be talking their book if they owned a lot of Treasury bonds that defaulted. If Treasury bonds default, they will outperform the market relative to their peers, causing an outflow from their competitors and inflows into Pimco, making them even richer. That's the way the world works, Frankie!
     
  9. Ravi
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    Ravi Diamond Member

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    By Republicans?

    Are you an American?
     
  10. Valerie
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    Valerie Gold Member

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    I think Gold has already gone through the roof for the time being and you are right the market doesn't think we will default. 3 weeks is a loong time yet to come so we shall see what happens next.
     
    Last edited: Jul 14, 2011

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