DEBT WALL 2013: The Death of Socialism

[Aman A.K.A. Ahamburger]

Aug 2, 2012 8:25:29 GMT -5 Driftr said:

What makes you think interest rates are going to rise? According to the Bernank, I thought we were going to suppress them until at least 2014. Any bond vigilantes still out there alive?

Here you go Driftr I guess this could have been posted in the housing bottom thread, however, it was discussed here and it's all relative around here anyway.

Bank Loans At Post-Recession Peak Support U.S. Growth
www.bloomberg.com/news/2012-08-06/bank-loans-at-post-recession-peak-support-u-s-growth.html

[Driftr]

Aug 7, 2012 0:53:54 GMT -5 Aman A.K.A. Ahamburger said:

Aug 2, 2012 8:25:29 GMT -5 Driftr said:

What makes you think interest rates are going to rise? According to the Bernank, I thought we were going to suppress them until at least 2014. Any bond vigilantes still out there alive?

Here you go Driftr I guess this could have been posted in the housing bottom thread, however, it was discussed here and it's all relative around here anyway.

Bank Loans At Post-Recession Peak Support U.S. Growth
www.bloomberg.com/news/2012-08-06/bank-loans-at-post-recession-peak-support-u-s-growth.html

I skimmed it quickly but didn't see anything in there about interest rates rising. Did you?

[Aman A.K.A. Ahamburger]

It's cause and effect my friend. Banks are lending huge sums of money to big firms that are buying houses cash. If the FED drops the deposit rate that put more pressure on the banks to loan out money the economy keeps slowing getting better, the banks can then start looking at raising rates because their trading days are basically over.

[Aman A.K.A. Ahamburger]

I know this is short term, and any news out of the EU or Japan at this point will change this quickly, however, I guess the bond market thinks that the Jobs report was ok.

Latest round of Treasury showdown goes to Fuss
www.investmentnews.com/article/20120807/FREE/120809944

[Driftr]

Aug 9, 2012 2:18:18 GMT -5 Aman A.K.A. Ahamburger said:

I know this is short term, and any news out of the EU or Japan at this point will change this quickly, however, I guess the bond market thinks that the Jobs report was ok.

Latest round of Treasury showdown goes to Fuss
www.investmentnews.com/article/20120807/FREE/120809944

Yep. What I can tell you is I've been buying 10 year notes at just about every auction for the last 32 months. The latest auction (yesterday) was at the second lowest yield of the 32 (1.680% up from the 1.459% in July). I hope Fuss wins the 'bet' long term. I'm not buying these things to trade them, I'm buying them for the safe income they generate.

Is anyone seeing mortgage rates increasing? I'd expect they should be following the 10 year (maybe 30?). I don't follow those.

[jarhead1976]

Drifter , the last report I saw from the federal reserve was sometime around the end of 2013. I currently cannot find the report from their web sight.
When you make the rules , who knows.

[Aman A.K.A. Ahamburger]

Aug 9, 2012 9:39:42 GMT -5 Driftr said:

Aug 9, 2012 2:18:18 GMT -5 Aman A.K.A. Ahamburger said:

I know this is short term, and any news out of the EU or Japan at this point will change this quickly, however, I guess the bond market thinks that the Jobs report was ok.

Latest round of Treasury showdown goes to Fuss
www.investmentnews.com/article/20120807/FREE/120809944

Yep. What I can tell you is I've been buying 10 year notes at just about every auction for the last 32 months. The latest auction (yesterday) was at the second lowest yield of the 32 (1.680% up from the 1.459% in July). I hope Fuss wins the 'bet' long term. I'm not buying these things to trade them, I'm buying them for the safe income they generate.

Is anyone seeing mortgage rates increasing? I'd expect they should be following the 10 year (maybe 30?). I don't follow those.

A quick look at bankrate shows that 30 yrs just a low of 3.75% and is on the way up just like your notes.

I have been considering buying some Govt CDN bonds over the last little bit, for the income like you pointed out. Carney said today he still thinks he's going to raise rates here, even though the housing market is starting to slow down. I will most likely stick to buying bonds when others are buying stocks, I guess we will have to see what kind of spread there is, I might be a bit of a bond trader..

[Driftr]

Aug 9, 2012 9:52:38 GMT -5 @jarhead1976 said:

Drifter , the last report I saw from the federal reserve was sometime around the end of 2013. I currently cannot find the report from their web sight.
When you make the rules , who knows.

Watching Bloomberg today one of the guys on there was talking about through 2014 at least. Ben's term is up in Feb'14 though (I think). Not that a new Fed president would propose anything different, but maybe...

[Aman A.K.A. Ahamburger]

I think there is a good chance that the market will say otherwise before that..

[Aman A.K.A. Ahamburger]

More bad news in the Canadian housing market, add that with 30k Job losses in July for Canada.. 2013 the WCC will most likely be in full effect.

Canada July Housing Starts Slow As Builders Pare Back Condos
www.bloomberg.com/news/2012-08-09/canada-july-housing-starts-slow-as-builders-pare-back-condos-1-.html

[Driftr]

Aug 10, 2012 22:08:32 GMT -5 Aman A.K.A. Ahamburger said:

I think there is a good chance that the market will say otherwise before that..

I hope you are correct. My 10 year plan has an average 3% return on 10 year notes. After almost 3 years, we're below plan on the Treasury side. Although the dividend side has been more than outperforming.

For a little light reading try Denninger & THE DEBT BOMB:

market-ticker.org/akcs-www?post=210055

[Aman A.K.A. Ahamburger]

Light reading, nice one... Seems to me it's another one missing that things will have to be phased out like they were phased in?

[Driftr]

I agree that things have to be phased out. I don't think those in power will be interested in doing so voluntarily though.

[Driftr]

10 year back at 1.73%. Baby steppin all the way back to 3% by end of 2013 (I hope).

[Deleted]

I dont see rates increasing that much

If the 10 year makes it back to 2% by eoy 2013 i will be surprised

They have to keep rates artificially low to keep the ugly debt beast from causing too big of an issue

What it does to savers is the least of their concerns right now

[Aman A.K.A. Ahamburger]

So you also see rates trending higher though G?

3% would be a sweet spot to keep the investor happy while the debt monster is phased out. Should be interesting to see how many politicians lose their jobs over the next 30 yrs anyway.

[Aman A.K.A. Ahamburger]

We have two showings on our place tomorrow night. I know I should feel bad, at least I know they most likely won't lose their job. This is going to be the strangest housing correction in the history of economics by the looks of it.

Home sales little changed in July; prices down 2% nationally: CREA
www.winnipegfreepress.com/canada/home-sales-little-changed-in-july-prices-down-2-nationally-crea-166251106.html

[Driftr]

1.85%

Just keep swimming, just keep swimming...

[Deleted]

maybe a little higher....but i wouldnt bet on much increase if any

too much to lose if rates creep up for the fed.....

they will do everything they can to keep them low....and i mean EVERYTHING

[Driftr]

[Driftr]

Belize just hit the wall...

[Aman A.K.A. Ahamburger]

(continued form Driftr)....next Japan!! This was bound to pop up at some point this year...

Politics pushes Japan towards fiscal cliff as money runs out
www.reuters.com/article/2012/08/24/us-japan-economy-budget-idUSBRE87N02V20120824?feedType=RSS&feedName=businessNews&rpc=986

On the other hand...

New York Fed sells last of its AIG assets, ending ties with firm
www.reuters.com/article/2012/08/23/us-usa-fed-aig-maidenlane-idUSBRE87M0UH20120823?feedType=RSS&feedName=businessNews&rpc=986

[Driftr]

Cool. One less illegal activity the Fed is involved in.

Saw the 10 year at 1.65% this morning. Bummer.

Came across this interesting chart over at Denninger's Market Ticker this week. Thought I'd share it in case anyone is interested.

market-ticker.org/akcs-www?get_gallerynr=3123

[Aman A.K.A. Ahamburger]

Flight to safety Flow says Oct bottom on bonds. I look at the rates at this point for homes as they will go up at some point so when I say rates will go up I mean that right now if you can buy a good home and lock in low rates why rent? One thing I was thinking about the low rates on the bonds though. It shows just how much the international martet still considers USA debt safe debt, which ties into that chart. It was slowly built up, and it will slowly go down. Business need happy, healthy, and wealthy customers.

[Driftr]

If debt on that chart is increasing 'slowly', how would you define the GDP increases? Very very very slowly?

[Aman A.K.A. Ahamburger]

LOL... I would say compared to how fast the economy has grown, the amount of debt that has been created through social spending is explosive! I'm looking at the gradual increase in debt and the leveling off of debt to GDP growth at the end of the last 30 yrs. Now we enter the 10% Teir 1 and balanced budget phase and that debt level goes down while the GDP still conitues to grow very, very, very slowly. (The Swoosh )

[Aman A.K.A. Ahamburger]

A bit of an aside to the debt, but on the topic of headwinds for 2013..

Public urged to be cautious when attending fairs
www.rockdalecitizen.com/news/2012/aug/25/public-urged-to-be-cautious-when-attending-fairs/

On Aug. 17, the CDC announced that 225 cases of H3N2v infection have been reported in the United States so far this year. Cases have been reported in Hawaii, Indiana, Michigan, Pennsylvania, West Virginia, Wisconsin, Ohio and Illinois

[Aman A.K.A. Ahamburger]

This thread will most likely turn into the death of socialism thread eventually, might as well start building the evidence here as well.

Harper government cancels 3,000 environmental reviews on pipelines and other projects
www.canada.com/technology/story.html?id=7135779

[Aman A.K.A. Ahamburger]

I would imagine that this will a be part of the correction that is coming because of 2013. A good buying opportunity I mean.. ;D

Will The Fiscal Cliff Turn Dividend Stocks Toxic?
www.forbes.com/sites/advisor/2012/08/28/will-the-fiscal-cliff-turn-dividends-toxic/

[Aman A.K.A. Ahamburger]

It's important to note that while many think that China "owns" the US because of all this US debt they own, the truth is far from that.

Who do we owe most of that $16 trillion to? Hint: It isn't China
www.foxnews.com/politics/2012/09/04/who-do-owe-most-that-16-trillion-to-hint-it-isnt-china/

Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.
“It is true that China is the largest foreign owner of our debt,” said Josh Gordon, policy director of the Concord Coalition, a Virginia-based nonprofit that advocates getting the nation’s debt under control. “But the vast majority of our debt is held by us.”