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The Trump Economy


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#581 Magox

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Posted 02 August 2017 - 02:47 PM

I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. 

 

I don't know, so many conflicting headwinds, tailwinds, disruptions and dislocations it's difficult to say.



#582 GG

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Posted 02 August 2017 - 03:09 PM

I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. 

 

Who's going to provide the capital to take out the maturing bonds?



#583 Tiberius

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Posted 02 August 2017 - 03:25 PM

Trump in a WSJ interview


So I deal with foreign countries, and despite what you may read, I have unbelievable relationships with all of the foreign leaders. They like me. I like them. You know, it’s amazing. So I’ll call, like, major — major countries, and I’ll be dealing with the prime minister or the president. And I’ll say, how are you doing? Oh, don’t know, don’t know, not well, Mr. President, not well. I said, well, what’s the problem? Oh, GDP 9 percent, not well. And I’m saying to myself, here we are at like 1 percent, dying, and they’re at 9 percent and they’re unhappy. So, you know, and these are like countries, you know, fairly large, like 300 million people. You know, a lot of people say — they say, well, but the United States is large. And then you call places like Malaysia, Indonesia, and you say, you know, how many people do you have? And it’s pretty amazing how many people they have. So China’s going to be at 7 [percent] or 8 percent, and they have a billion-five, right? So we should do really well.

But in order to do that — you know, it’s tax reform, but it’s a big tax cut. But it’s simplification, it’s reform, and it’s a big tax cut, 15–
http://www.politico....241214?lo=ap_d1

#584 TPS

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Posted 02 August 2017 - 03:28 PM

Who's going to provide the capital to take out the maturing bonds?

for treasury bonds, its account at the Fed decreases by an amount equal the bond maturing. The treasury most likely will rollover the debt at the next auction, and their auctions are always filled. The mbs are being paid down over time already.

#585 GG

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Posted 02 August 2017 - 03:40 PM

for treasury bonds, its account at the Fed decreases by an amount equal the bond maturing. The treasury most likely will rollover the debt at the next auction, and their auctions are always filled. The mbs are being paid down over time already.

 

Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS.

 

Who'd want to be around when that music stops?



#586 Magox

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Posted 02 August 2017 - 04:02 PM

 

Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS.

 

Who'd want to be around when that music stops?

 

That's true, but do you really see the music ending anytime soon?

 

There is no better tune in the foreseeable future than that of the US tune.



#587 TPS

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Posted 02 August 2017 - 04:14 PM

Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS.
 
Who'd want to be around when that music stops?

The Fed's BS has been pretty stable for a few years now--they also haven't been very active in mbs for the past 3 years. Auctions are full because there is always demand for the largest, safest and most liquid asset in the world. Who is "a big captive buyer?"

#588 ShadyBillsFan

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Posted 02 August 2017 - 04:31 PM

So the current hapless administration deserves criticism for following the same monetary policy as the previous administrations?  What opinion of the previous administration?


All I said was that 6 months isn't enough time to give credit or blame.
I don't claim to be an expert it's jmo

#589 TPS

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Posted 02 August 2017 - 04:46 PM

All I said was that 6 months isn't enough time to give credit or blame.
I don't claim to be an expert it's jmo

Directed at me, since I called them hapless. I'm referring to their inability to get anything of note passed. The republicans have majorities in both houses, but this administration can't seem to take advantage of it. His honeymoon is over...

#590 GG

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Posted 02 August 2017 - 04:57 PM

The Fed's BS has been pretty stable for a few years now--they also haven't been very active in mbs for the past 3 years. Auctions are full because there is always demand for the largest, safest and most liquid asset in the world. Who is "a big captive buyer?"


Don't be cute. You know who the active buyer has been.

The funny (not really) part is there's one side of the Fed that's confounded by the amount of liquidity in the capital markets and don't understand why banks continue to load up on more risk.

#591 TPS

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Posted 02 August 2017 - 05:10 PM

Don't be cute. You know who the active buyer has been.
The funny (not really) part is there's one side of the Fed that's confounded by the amount of liquidity in the capital markets and don't understand why banks continue to load up on more risk.

if you are referring to the Fed, they can't participate in auctions because that would be directly financing the treasury, which they're not allowed to do; they have to buy in the secondary markets. As I've said before, It's the 21 primary dealers who are required to make the market in new issues when needed.

#592 GG

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Posted 02 August 2017 - 05:24 PM

if you are referring to the Fed, they can't participate in auctions because that would be directly financing the treasury, which they're not allowed to do; they have to buy in the secondary markets. As I've said before, It's the 21 primary dealers who are required to make the market in new issues when needed.


And where is their liquidity coming from?

The balance sheet has to unwind, and it won't be pretty.

#593 TPS

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Posted 02 August 2017 - 05:33 PM

And where is their liquidity coming from?
The balance sheet has to unwind, and it won't be pretty.

as I said, there's no economic reason it has to unwind. No worries.
Banks have over $2 trillion in excess reserves; liquidity is not a problem.

#594 Tiberius

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Posted 04 August 2017 - 11:08 AM

I see the Obama recovery is still going strong!

#595 Nanker

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Posted 04 August 2017 - 03:29 PM

I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. 

Creating more chaos perhaps? Assisting the coup? Preserving their own power? 

 

Directed at me, since I called them hapless. I'm referring to their inability to get anything of note passed. The republicans have majorities in both houses, but this administration can't seem to take advantage of it. His honeymoon is over...

Healthcare insurance reform has them in a stranglehold. Their failure to produce a viable path to unraveling the ACA abortion has them doomed. Without savings from that Jonah, they can't get real tax reductions in place. Forget about tax reform. That will take a bipartisan effort and the chances of that are smaller than The Bills winning the Super Bowl in 2018. 



#596 Tiberius

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Posted 12 September 2017 - 10:47 AM

For all the crying, moaning and complaining about the economy under Obama: 

 

https://www.washingt...m=.18ba7e0681b4

America's middle class had its highest-earning year ever in 2016, the U.S. Census Bureau reported Tuesday.

Median household income in America was $59,039 last year, surpassing the previous high of $58,655 set in 1999, the Census Bureau said. The figure is adjusted for inflation and is one of the most closely watched indicators of how the middle class is faring financially, as the Census surveys nearly 100,000 homes.

The Census said the uptick in earnings occurred because so many people found full-time jobs — or better-paying jobs — last year.

America's poverty rate also fell to 12.7 percent, the lowest since 2007, the year before the financial crisis hit. The percent of Americans without health insurance for the entire year also dropped in 2016 to just 8.8 percent, largely thanks to expanding coverage under the Affordable Care Act.

 

 

 

 



#597 row_33

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Posted 12 September 2017 - 10:54 AM

Obama was a calm time (fortunately) with a decent man at the helm, nothing useful or important happened to people who already had their act together.



#598 Tiberius

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Posted 12 September 2017 - 10:57 AM

Obama was a calm time (fortunately) with a decent man at the helm, nothing useful or important happened to people who already had their act together.

Calm time? Recession?