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Thread: Here Comes the Economic Boom

  1. #31

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    Quote Originally Posted by Zippyjuan View Post
    The claim was that the Fed was buying 65-70% of all US Treasuries. They aren't since they are no longer net buyers.
    Can you say the same on a duration weighted basis? They are levering up on all the long term risky high duration garbage with short term paper.



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  3. #32
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    The Treaury has not been issuing much in the way of long term debt so yes, within that category, the Fed has been their significant buyer. I think the Treasury should also be moving more US debt to longer term instruments to capture lower debt costs for farther into the future.

    Couple intersting charts I found:
    http://www.ritholtz.com/blog/2012/06...-s-treasuries/

    Domestic Investors – Mutual Funds

    The next big domestic buyer that comes to mind is the mutual fund community with more than $12.4 trillion in assets ($9.9 trillion in long-term funds — stocks, bonds and hybrid funds — and $2.5 trillion in money market mutual funds). The two charts below show the net purchases of Treasuries for money market mutual funds and long-term mutual funds. This data also comes from the Federal Reserve’s flow-of-funds report.

    As the first chart shows, money market mutual funds were net sellers of Treasuries seven quarters in a row before returning with net purchases.

    The second chart shows long-term mutual funds are net buyers of Treasuries. While these purchases have rebounded in recent quarters, neither the long-term mutual funds nor the money market funds are large players in the Treasury market when compared to foreigners or the Federal Reserve






    Domestic Investors – Banks

    Are banks’ holdings of Treasuries closer in scale to those of the Federal Reserve or foreigners?

    The first chart below shows U.S. chartered bank holdings of Treasuries have declined from $294 billion in Q1 1994 to just $29 billion in Q1 2012. The second chart shows a long-term look at the percentage of banks’ assets invested in Treasuries. Back in the 1950s it was near 40%. Today it is less than 0.3%. Simply put, banks do not buy Treasuries.


    Last edited by Zippyjuan; 11-01-2012 at 04:35 PM.
    I am Zippy and I approve of this message. But you don't have to.

  4. #33
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    Quote Originally Posted by Odin View Post
    I'm definitely not an economic expert, so hopefully you can correct me if I'm wrong, but if China/the world keeps buying our debt and doesn't dump their dollars then the music keeps playing right? I think it's impossible to know how much time we have, I still think if we greatly reduced the deficit very soon we could avoid the worst of it.
    There is no chance of greatly reducing the deficit. If you do not believe that, look at the Senate, how many votes can you get , to cut anything ?

  5. #34

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    And now hurricane Sandy has created jobs and tons of new wealth. Rejoice!
    Quote Originally Posted by Ron Paul
    Perhaps the most important lesson from Obamacare is that while liberty is lost incrementally, it cannot be regained incrementally. The federal leviathan continues its steady growth; sometimes boldly and sometimes quietly. Obamacare is just the latest example, but make no mistake: the statists are winning. So advocates of liberty must reject incremental approaches and fight boldly for bedrock principles.
    The epitome of libertarian populism

  6. #35
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    Actually, tons of new expense to be carried by state, local govt.'s , insurane co.'s to be passed to the tax payer.... net loss ...

  7. #36
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    "Boom" or "Bubble"?
    "You cannot solve these problems with war." - Ron Paul

  8. #37

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    Quote Originally Posted by oyarde View Post
    Actually, tons of new expense to be carried by state, local govt.'s , insurane co.'s to be passed to the tax payer.... net loss ...
    Tons of demand has been created, and think of all the employment needed to rebuild!
    Quote Originally Posted by Ron Paul
    Perhaps the most important lesson from Obamacare is that while liberty is lost incrementally, it cannot be regained incrementally. The federal leviathan continues its steady growth; sometimes boldly and sometimes quietly. Obamacare is just the latest example, but make no mistake: the statists are winning. So advocates of liberty must reject incremental approaches and fight boldly for bedrock principles.
    The epitome of libertarian populism

  9. #38

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    Quote Originally Posted by Seraphim View Post
    And this allows banks to do what?

    Purchase treasuries to bolster their reserves...to fractionally lend them off.

    The Fed, the USG and the Primary Dealers are playing a game of monetary merry-go-round.
    There is no fractional at all... Fractions? its all x9...

    youtube Mike Maloney interviews Richard Daughty

  10. #39

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    Good to see all the negative Nancy viewpoints in this thread. I consider it a contrarian indicator - things are getting better.

  11. #40

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    If you really think things are getting better you're not looking at it correctly...

    I don't care what bubble they inflate or how much better they try to make things seem.

    This is an undeniable truth.

    The US Debt is past 16 Trillion, US Total Debt is 58Trillion, the unfunded Liabilities are in the nature of 250trillion, student loan debt OUTWEIGHS personal credit card debt, none of this is in a reverse trend. It's all getting much worse, and the reason that there's an illusion of prosperity is because of the massive inflation that's going on to create it.

    Nothing is better, nothing is close to better, if you ride up the bubble and assume it's peaches and cream you're crazy. Whatever ride up we get temporarily will be offset in the future by an even greater crash than 2008.

    Things might get better but it's an illusion. This country is flat out broke and the people are carrying the entire burden they just haven't been slammed with it yet.
    It's just an opinion... man...

  12. #41

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    I can't tell if the OP is meant to be taken sarcastically or not. I think I'll move on.

  13. #42

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    Quote Originally Posted by W_BRANDON View Post
    I can't tell if the OP is meant to be taken sarcastically or not. I think I'll move on.
    100% serious.

  14. #43

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    Quote Originally Posted by NoOneButPaul View Post
    If you really think things are getting better you're not looking at it correctly...

    I don't care what bubble they inflate or how much better they try to make things seem.

    This is an undeniable truth.

    The US Debt is past 16 Trillion, US Total Debt is 58Trillion, the unfunded Liabilities are in the nature of 250trillion, student loan debt OUTWEIGHS personal credit card debt, none of this is in a reverse trend. It's all getting much worse, and the reason that there's an illusion of prosperity is because of the massive inflation that's going on to create it.

    Nothing is better, nothing is close to better, if you ride up the bubble and assume it's peaches and cream you're crazy. Whatever ride up we get temporarily will be offset in the future by an even greater crash than 2008.

    Things might get better but it's an illusion. This country is flat out broke and the people are carrying the entire burden they just haven't been slammed with it yet.
    Your unfunded liabilities number is not only off by multiples, but also an illusion. "Unfunded liabilities" is just a way to calculate future expenses without considering revenues. That's a really stupid way to look at on-going expenses.

  15. #44

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    Quote Originally Posted by Jordan View Post
    Good to see all the negative Nancy viewpoints in this thread. I consider it a contrarian indicator - things are getting better.
    In a central planned world, things can improve in your neighborhood without improving in mine. If America, and her allies, war on Iran, then Raytheon, Lockheed Martin, GE, Haliburton, and many other warring contractors will profit at the expense of private industry and the innocent people of Iran who get maimed or killed. War Is A Racket ... after all. The Hospital Industry thrives too. That is not a good thing unless you are one who profits from the maiming and killing and don't care about your fellow humans.

  16. #45

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    Quote Originally Posted by Jordan View Post
    100% serious.
    Sure the economy might show some minor signs of dead cat bounce, but the underline fundamentals are outright horrible. If you think printing and borrowing trillions will work in the medium to long term, you are a fool. We are sowing the seeds of our own destruction and will pay for it. Fake markets propped up to the tune of trillions by central banks will not hold. In the last 5 years, we have borrowed 5 trillion on the federal side and printed near 2 trillion dollars from the federal reserve and our economy is still barely moving. Just because people were buying stocks hand over fists in the .com bubble, doesn't mean that the cliff isn't just around the corner. I don't care how much demand there is for western bonds, because reality will return and it will not be pretty.

  17. #46

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    Quote Originally Posted by jclay2 View Post
    Sure the economy might show some minor signs of dead cat bounce, but the underline fundamentals are outright horrible. If you think printing and borrowing trillions will work in the medium to long term, you are a fool. We are sowing the seeds of our own destruction and will pay for it. Fake markets propped up to the tune of trillions by central banks will not hold. In the last 5 years, we have borrowed 5 trillion on the federal side and printed near 2 trillion dollars from the federal reserve and our economy is still barely moving. Just because people were buying stocks hand over fists in the .com bubble, doesn't mean that the cliff isn't just around the corner. I don't care how much demand there is for western bonds, because reality will return and it will not be pretty.
    You have to look on the bright side. In the near future, people could be taking home weekly paychecks in the MILLIONS!


  18. #47

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    Monster asset bubble that has faced no correction, accompanied by the expected minor fluctuations.

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  20. #49

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    Quote Originally Posted by matt0611 View Post

    This!

  21. #50
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    I , expect unemployment to go up , end of Jan.

  22. #51

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    Max Keiser is calling the meltdown for early Q2 of 2013.

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