10 year treasuries

foggedinn

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In the last month or so, I've watched rates on the ten year US treasuries drop from 3.8% to 3.1%. This is a pretty drastic drop. Smart people probably know what this means.

These days it's hard to tell if this is something that is a true market indicator or just market manipulation ahead of the next FOMC meeting.

Anybody here smart enough to explain the significance (if any) of this drop in rates?
 

william the wie

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In the last month or so, I've watched rates on the ten year US treasuries drop from 3.8% to 3.1%. This is a pretty drastic drop. Smart people probably know what this means.

These days it's hard to tell if this is something that is a true market indicator or just market manipulation ahead of the next FOMC meeting.

Anybody here smart enough to explain the significance (if any) of this drop in rates?
What is happening is money leaving the eurozone for the US. Given the lack of transparency at all levels details are not known. I think it is the death of the welfare state we are witnessing.

Full social security benefits have been raised to 67 in the US and Germany; France is talking about raising retirement from 60 to 62 and Greece is running out of money to fund retirement. Spain, Portugal, Ireland and the UK are trying to figure out how to get out of their own welfare traps.

China and India are growing old without growing rich and face collapse. Japan partially collapsed in 1993 and is expected to totally collapse under its debt load in the near future. These three countries have had welfare states for a very long time although at a lower level for India and China compared to say the UK and Sweden.

The New Deal, the 1905 elections in the UK and various reforms coming out of the European revolutions of 1848 were all based on static economic models modified by normal (bell) curve distribution of events. I am aware of at least three proposed statistical models that seem to work better than the bell curve and economic statics also has a lot of problems: a lack of an innovation model, an economic man that violates biology and poor modeling of demographic changes. After economics is rebuilt from the ground up I doubt that the current political spectrum will be viable.

We are living in interesting times.
 

Neubarth

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As long as we can continue to borrow from the FED at zero interest, we have nothing to worry about from a DEBT standpoint. ZERO INTEREST! Yahoo!!!
 

The Rabbi

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I agree. Flight to safety coupled with lack of other opportunities. With the most anti-business president in office U.S. businesses are just sitting tight, building up cash reserves. Europe isn't much friendlier and China is trying to put the squeeze on its own economy before it hyperinflates.
 

industry7

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As long as we can continue to borrow from the FED at zero interest, we have nothing to worry about from a DEBT standpoint. ZERO INTEREST! Yahoo!!!
We don't borrow from the fed at 0% interest. There are some other banks which do, but when the federal gov't borrow from the fed, we pay interest.
 

Neubarth

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As long as we can continue to borrow from the FED at zero interest, we have nothing to worry about from a DEBT standpoint. ZERO INTEREST! Yahoo!!!
We don't borrow from the fed at 0% interest. There are some other banks which do, but when the federal gov't borrow from the fed, we pay interest.
I'm 62 and I have never seen that happen. On what issuance on which note did that happen, or are you just making up lies for effect?
 

Neubarth

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I agree. Flight to safety coupled with lack of other opportunities. With the most anti-business president in office U.S. businesses are just sitting tight, building up cash reserves. Europe isn't much friendlier and China is trying to put the squeeze on its own economy before it hyperinflates.
China is probably the most interesting to watch. They actually spurred the housing bubble that they now have, to try to encourage spending in their country. Now the bubble is out of control as is the spending with the younger generation. How do you rein it in without a crash? I doubt that they can do that.
 

Neubarth

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Another housing bubble to watch is the one in Australia. It is just like ours was in 2006. Ripe for a collapse. The question is, will it, before inflation hits the country? If it does start to fall, short the Aussie banks because they are going to be in a world of hurt.
 

william the wie

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As long as we can continue to borrow from the FED at zero interest, we have nothing to worry about from a DEBT standpoint. ZERO INTEREST! Yahoo!!!
We don't borrow from the fed at 0% interest. There are some other banks which do, but when the federal gov't borrow from the fed, we pay interest.
I'm 62 and I have never seen that happen. On what issuance on which note did that happen, or are you just making up lies for effect?
The term is Quantitative Easing. Bernancke is easing off on that but something like 2 trillion of QE is admitted to not including money lent to Freddie and Fannie. So far as I know details on issuance are sketchy or in the case of the former GSEs kept secret. The way QE was handled has sparked Conspiracy Threads across the web.

Not being a CT I just chalk it up to the kind of incompetence that led the Fed to open up the discount window within two hours of forcing the Bear Stearne-JP Morgan merger in March 08. I suspect the Fed is still paying off takings clause lawsuits on that adventure in public stupidity still today. The audit the Fed clause in financial reform will, if it makes it out of conference, provide more details on QE.
 

william the wie

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Another housing bubble to watch is the one in Australia. It is just like ours was in 2006. Ripe for a collapse. The question is, will it, before inflation hits the country? If it does start to fall, short the Aussie banks because they are going to be in a world of hurt.
au.com has a huge archive on the current state of collapse. Australia is at about June 2006 by my read. Also NZ real estate has already crashed and there is anecdotal evidence that Australia to New Zealand migration is picking up as those with skills New Zealand needs move to where housing is affordable. Tasmania, Queensland and W. Australia where the boom never got as big as in the Sydney-Melbourne corridor are also getting a boost.
 

Chris

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In the last month or so, I've watched rates on the ten year US treasuries drop from 3.8% to 3.1%. This is a pretty drastic drop. Smart people probably know what this means.

These days it's hard to tell if this is something that is a true market indicator or just market manipulation ahead of the next FOMC meeting.

Anybody here smart enough to explain the significance (if any) of this drop in rates?
What is happening is money leaving the eurozone for the US. Given the lack of transparency at all levels details are not known. I think it is the death of the welfare state we are witnessing.

Full social security benefits have been raised to 67 in the US and Germany; France is talking about raising retirement from 60 to 62 and Greece is running out of money to fund retirement. Spain, Portugal, Ireland and the UK are trying to figure out how to get out of their own welfare traps.

China and India are growing old without growing rich and face collapse. Japan partially collapsed in 1993 and is expected to totally collapse under its debt load in the near future. These three countries have had welfare states for a very long time although at a lower level for India and China compared to say the UK and Sweden.

The New Deal, the 1905 elections in the UK and various reforms coming out of the European revolutions of 1848 were all based on static economic models modified by normal (bell) curve distribution of events. I am aware of at least three proposed statistical models that seem to work better than the bell curve and economic statics also has a lot of problems: a lack of an innovation model, an economic man that violates biology and poor modeling of demographic changes. After economics is rebuilt from the ground up I doubt that the current political spectrum will be viable.

We are living in interesting times.
My vote for dumbest post of the year. China will collapse? They have one of the fastest growing economies in the world.

The world economy will expand this year and next.

High technologies such as the internet and high speed computers will continue to reap productivity gains and amazing innovations. The democratization of the planet will continue as well.

The only welfare states we need to worry about are the corporate lobbyists in Washington.
 
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