america the subprime borrower (credit, debt, buy, interest)

[floridasandy]

Oh, You Think You're Gonna Crank Out Bonds? - The Market Ticker. i am printing this entire article, with credit to denninger. clearly, our government leaders are either out of their minds or deliberately trying to ruin the country:

I'd give the 30 year auction today a big fat stinking "F"...

The so-called yield curve touched 373 basis points, the most in at least 29 years, as the bonds drew a yield of 4.52 percent, compared with an average forecast of 4.483 percent in a Bloomberg News survey of five of the Federal Reserve’s 18 primary dealers.

Mediocre demand Bloomberg goes on to say.....

Uhhhhh... no.

That might have something to with this from Politico:

In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.

“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year.

America the subprime borrower.

Make no mistake - this is pushback. "We" didn't incur this debt Steny, you and your pals did. Remember, Steny, America said by a more than 100:1 margin NO to TARP. You passed it anyway.

You dished out over $1.4 trillion in trash last year, and are $300 billion in the hole in two months this year - already. For the math-challenged that's $1.8 trillion for this fiscal year, if your profligacy continues.

Go ahead, boyz, try to bail everyone out that's a Wall Street bigwig. Keep it up - the bond market will take care of you soon enough, and America will go "bang" - literally.

Oh, I'm not the only one saying it either. Nor is it just "bears" like Roubini. Try Australia's opposition finance spokesman Barnaby Joyce:

THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an ''economic Armageddon'' which will make the recent global financial crisis pale into insignificance.

Senator Joyce told the Herald yesterday he did not mean to alarm the public but there needed to be a debate about Australia's ''contingency plan'' for a sovereign debt default by the US or even by a local state government.

They're already making contingency plans down under..... is it time to short the US government - and should we go long baskets?

Just curious.

[HappyTexan]

30 years is definitely too long to lock in. I suspect inflation is just around the corner and with that comes higher rates. I've been reading about advice to stay short (2 years or less) and when inflation rears it's ugly head then TIPS might be good and a bit longer lockin or ladder yourself in CD's to catch the rates as they are going up.

[floridasandy]

Quite literally, the QUANTITY OF MONEY IS OUT OF CONTROL, especially when one considers the shadow banking world of derivatives. Just look at how quickly the math of debt went from millions to billions and now on to trillions. (nathan)

[floridasandy]

There are currently two ROOT PROBLEMS that plague the United States:

1. Our current money system is comprised almost entirely of debt backed money. This system is only 38 years old and yet it has already reached the limits of mathematical growth. The economy, on every level, is saturated with debt. There is not enough income to mathematically EVER repay this debt, and thus CHANGE IS GOING TO HAPPEN, whether we like it or not, or whether we believe it or not. Any system that is designed in such a manner is mathematically destined to fail from conception.

2. We have lost sight of the purpose of CORPORATIONS. The concept of a corporation first came about when Europe was exploring the new world. This was a very expensive and risk filled proposition, wealthy individuals could lose everything by losing a ship at sea and subsequently having family members of the deceased sue them. Thus the necessary capital for exploration and advancement dried up. And out of that came the concept of limited liability. Thus the Corporation was born as a way to serve mankind so that exploration could continue.

Today, corporations seem to have risen to a special place, one that is higher than man. This is because capital has concentrated so greatly that corporations use their money to influence politicians and to write laws in their favor. Yes, this is an extension of the Golden Rule, whereby those with the gold make the rules. But it is now at such an extreme that politicians on the national stage cannot get elected without massive infusions of their money – and thus there is a circle that feeds into them and makes them even larger and more powerful.
These two root problems are now intertwined as some of the largest corporations in America are the ones who are producing and controlling the quantity of our money. They use their vast money to buy BOTH SIDES of political issues thus ensuring that their interests are represented. This super representation has got to stop as it affords a few individuals power and control over the majority who do not have the same access. This is NOT how our political system is supposed to work. (nathan)

[HappyTexan]

Originally Posted by floridasandy

Quite literally, the QUANTITY OF MONEY IS OUT OF CONTROL, especially when one considers the shadow banking world of derivatives. Just look at how quickly the math of debt went from millions to billions and now on to trillions. (nathan)

Lol..just read this..our government is putting us on a suicide mission

House eases restrictions on derivatives trades - Yahoo! News (http://news.yahoo.com/s/ap/20091211/ap_on_bi_ge/us_financial_overhaul - broken link)

"A bipartisan coalition in the House voted late Thursday to make it easier for corporations to engage in complex derivatives trades without government restrictions, eroding the reach of proposed regulations to govern Wall Street."

[floridasandy]

Originally Posted by HappyTexan

Lol..just read this..our government is putting us on a suicide mission

House eases restrictions on derivatives trades - Yahoo! News (http://news.yahoo.com/s/ap/20091211/ap_on_bi_ge/us_financial_overhaul - broken link)

"A bipartisan coalition in the House voted late Thursday to make it easier for corporations to engage in complex derivatives trades without government restrictions, eroding the reach of proposed regulations to govern Wall Street."

i guess trillions in debt isn't enough for these people. i don't know how they can sleep at night.

shame on ALL those who support the "loosening" of derivatives. i am going to find out the names of all of those people and publish them when i do. the nicest thing you can say about them is that they have an inability to look ahead and there are plenty of worse things you can say about them.

counterpunch has an interesting article up on the situation:
For months now, Congress has been stumbling through an exercise billed as “financial regulatory reform,” purportedly dedicated to bringing law enforcement to the Wall Street Casino. One activity notably popular among the gamesters has been the “dark markets” in the $600 trillion derivatives trading markets, not least because trades are executed on a bilateral basis between dealer and customer, with no public price disclosure, at least not until well after the fact. An analogous situation would be for someone buying stock in, for example, the Apple Corporation, to take the price offered by a broker with no opportunity to see what everyone else is paying that day, or that minute.