Bond Market Braces For $ 1 Trillion Tsunami Of Treasuries This Year

[g5000]

All you have to do to fix the CDS problem is regulate them like insurance. Require an insurable interest.

Simple.

But to this day, they are STILL not required to have an insurable interest.

Because we have a lot of ignoramuses who think they are not a threat (zero sum).

 

[g5000]

Dipshits misspelled Treasuries: Bond market braces for $ 1 trillion tsunami of Treasurys this year

Trump's Tard Herd has been deliberately kept in the dark to the fact that Trump ran up $666 billion in new debt last year. That's the highest deficit of any President in American history other than Obama.

And now, another trillion is about to hit the fan.

You see, pseudocons think if you keep adding more to your credit card, your payments don't have to go up.

In fact, Trump just lowered their credit card payment (tax "reform").

What we have here, ladies and gentlemen, is a Ponzi scheme. Trump is issuing debt (borrowing) to pay off the national credit card!

I shit you not.

The tax "reform" transferred $1.5 trillion of debt to our unborn descendants.

As if that isn't a big enough clusterfuck, at today's yields there probably isn't enough demand for Trump's trillion dollar treasuries.

So interest rates will have to rise to entice our enemies to loan us more money.

There are an astronomical number of financial derivatives which will implode if that happens. Derivatives with face values approaching triple digit trillions.


“If demand for U.S. fixed income doesn’t double over the coming years then U.S. long rates will move higher, credit spreads will widen, the dollar will fall, and stocks will likely go down as foreigners move out of depreciating U.S. assets,” said Torsten Slok, chief international economist for Deutsche Bank, in a note.


I warned you. I told you the last time the GOP controlled the whole government they spent like drunken sailors in a whorehouse.

This is one of the reasons why we will be in a recession by this time next year.

Yeah. Probably not this year.

But you never know. Someone's derivatives could explode (a la Bear Stearns and Lehman Brothers) and light the fuse sooner.

Someone's derivatives could explode (a la Bear Stearns and Lehman Brothers)

Bear Stearns and Lehman's collapse had nothing to do with derivatives.

Oh they most certainly did!

I guess you really were in a coma.

Oh they most certainly did!

Prove they failed because of derivatives and not because of bonds.

See: Post 130.

More: http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/02BearStearnsCaseStudy.pdf

Bear Stearns sponsored two hedge funds through its subsidiary, Bear Stearns Asset Management. The main fund, the High-Grade Structured Credit Strategies Fund, was made up of complex derivatives backed by home mortgages. During most of its life it was highly profitable but as the housing market began to stutter in late 2006 the returns suffered. This fund was leveraged at 35 times its invested funds.

 

[g5000]

Because of derivatives, Bear Stearns and the other top broker-dealers were able to convince regulators to allow them to decrease their capital reserves.

I've talked about this many, many times.

The unanimous SEC Net-Capital Rules Change for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns.

In line with new capital adequacy standards coming into force soon under Europe's Basel accords, brokerages granted CSE status would be able to use in-house, risk-measuring computer models to figure how much net capital they need to set aside.

There's your sub-prime crash explained in a single sentence right there.

Since the new CSE rules will apply to the largest brokerages without bank affiliates, SEC Commissioner Harvey Goldschmid said, "If anything goes wrong, it's going to be an awfully big mess."

Grossest understatement of the new century.

 

[g5000]

Gotta go. Be back later.

 

[Toddsterpatriot]

Oh, another thing about derivatives.

They are pretty much unregulated. They aren't traded on regulated exchanges so that if one party goes under due to suffering extreme losses , the other parties can still be compensated. This means there is tremendous counterparty risk. And during a crash, that causes seizures.

The derivatives chain is so complex, no one knows what other parties are fucked and which ones aren't. Trust collapses. Liquidity freezes up.

See: 2008.

Oh, another thing about derivatives.

They are pretty much unregulated.

Some are, some aren't.

They aren't traded on regulated exchanges

Every option and futures contract traded on a US exchange is a derivative.
You should probably look up the definition, you'll sound less like a moron. Maybe.

Options and futures are a subset of derivatives.

And only commodity options and futures are traded on exchanges.
Not all options and futures are. Trillions are traded over the counter.

The biggest subset of derivatives, by far, are interest rate swaps. And those are not traded on exchanges.

Options and futures are a subset of derivatives.

Excellent!

Oh, another thing about derivatives.

They are pretty much unregulated.

^
Glad you realized the above claim was false.
​

And only commodity options and futures are traded on exchanges. ​

Ummmm.....interest rate futures, bond futures, currency futures.
Bitcoin futures. Weather futures. Eurodollar futures. Index futures. Volatility futures.
Freight futures. Emissions futures.​

 

[Toddsterpatriot]

Wrong.

The buyers of the inverse floaters will take a huge loss.

And the sellers will have a gain, moron.

See post 32, tard.

If I issue a bond that currently has a 5% coupon and the coupon goes down to 4%,
the buyer lost 1% a year, I saved 1% a year.

Could you know less about this stuff? It'd be difficult.

You are so far behind the times it is hilarious.

Were you in a coma in 2008?

Do you even know what a credit default swap is?

Do you even know what a credit default swap is?

Better than you, obviously.

That is a low bar though. LOL!

No, you clearly have no clue.

You claimed they were zero sum. About as wrong as wrong can be.

You claimed they were zero sum.

If we make a $10 bet on the Super Bowl, is that a zero sum bet? Why?

 

[Toddsterpatriot]

Oopsie! The guys who sold us those CDS don't have $20 trillion.

You think his failure to pay out $20 trillion wiped out $20 trillion in wealth?
​

Nope. It wipes out whatever the sellers of CDS have in their reserves. Then the counterparties go begging to the government for the rest.

See: AIG.

And you thought they were zero sum!

It wipes out whatever the sellers of CDS have in their reserves.

Where does the reserve money go?

Then the counterparties go begging to the government for the rest.

Yup. And? Still zero sum.

And you thought they were zero sum!

Only because they are.

 

[Toddsterpatriot]

All you have to do to fix the CDS problem is regulate them like insurance. Require an insurable interest.

Simple.

But to this day, they are STILL not required to have an insurable interest.

Because we have a lot of ignoramuses who think they are not a threat (zero sum).

All you have to do to fix the CDS problem is regulate them like insurance. Require an insurable interest.

Nah. Make them trade on an exchange.

 

[leftwinger]

Please explain in simple English. If someone had too many Bond funds in a target date IRA fund.........I am told those funds are constantly buying and selling Bonds?

will the overall balance drop 1%? 10%? 50%?

 

[Toddsterpatriot]

This is one of the reasons why we will be in a recession by this time next year.

Yeah. Probably not this year.

But you never know. Someone's derivatives could explode (a la Bear Stearns and Lehman Brothers) and light the fuse sooner.

Someone's derivatives could explode (a la Bear Stearns and Lehman Brothers)

Bear Stearns and Lehman's collapse had nothing to do with derivatives.

Oh they most certainly did!

I guess you really were in a coma.

Oh they most certainly did!

Prove they failed because of derivatives and not because of bonds.

See: Post 130.

More: http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/02BearStearnsCaseStudy.pdf

Bear Stearns sponsored two hedge funds through its subsidiary, Bear Stearns Asset Management. The main fund, the High-Grade Structured Credit Strategies Fund, was made up of complex derivatives backed by home mortgages. During most of its life it was highly profitable but as the housing market began to stutter in late 2006 the returns suffered. This fund was leveraged at 35 times its invested funds.

During most of its life it was highly profitable but as the housing market began to stutter in late 2006 the returns suffered. This fund was leveraged at 35 times its invested funds.

They were leveraged at 35 times and the "housing market began to stutter".
And we're not discussing why 2 hedge funds failed, we were discussing why Bear Stearns and Lehman failed.

 

[Toddsterpatriot]

Please explain in simple English. If someone had too many Bond funds in a target date IRA fund.........I am told those funds are constantly buying and selling Bonds?

will the overall balance drop 1%? 10%? 50%?

If someone had too many Bond funds in a target date IRA fund........

Then the fund price would drop when the bonds it holds go down in value.

will the overall balance drop 1%? 10%? 50%?

Not enough info.....

 

[AntonToo]

Dipshits misspelled Treasuries: Bond market braces for $ 1 trillion tsunami of Treasurys this year

Trump's Tard Herd has been deliberately kept in the dark to the fact that Trump ran up $666 billion in new debt last year. That's the highest deficit of any President in American history other than Obama.

????
Bush left office with 1.3T deficit budget for fiscal year 2009

 

[Toddsterpatriot]

Dipshits misspelled Treasuries: Bond market braces for $ 1 trillion tsunami of Treasurys this year

Trump's Tard Herd has been deliberately kept in the dark to the fact that Trump ran up $666 billion in new debt last year. That's the highest deficit of any President in American history other than Obama.

????
Bush left office with 1.3T deficit budget for fiscal year 2009

At least $245 billion of that was bank TARP that was repaid, plus a big profit, in the next few years.

 

[AntonToo]

Dipshits misspelled Treasuries: Bond market braces for $ 1 trillion tsunami of Treasurys this year

Trump's Tard Herd has been deliberately kept in the dark to the fact that Trump ran up $666 billion in new debt last year. That's the highest deficit of any President in American history other than Obama.

????
Bush left office with 1.3T deficit budget for fiscal year 2009

At least $245 billion of that was bank TARP that was repaid, plus a big profit, in the next few years.

It was still massive deficits stemming from recession combined with Bush's tax-cuts and unpaid-for spending.

 

[Toddsterpatriot]

Dipshits misspelled Treasuries: Bond market braces for $ 1 trillion tsunami of Treasurys this year

Trump's Tard Herd has been deliberately kept in the dark to the fact that Trump ran up $666 billion in new debt last year. That's the highest deficit of any President in American history other than Obama.

????
Bush left office with 1.3T deficit budget for fiscal year 2009

At least $245 billion of that was bank TARP that was repaid, plus a big profit, in the next few years.

It was still massive deficits stemming from recession combined with Bush's tax-cuts and unpaid-for spending.

Yup. Massive deficits.
Some of it from unpaid-for spending bills that Obama signed.

 

[leftwinger]

????
Bush left office with 1.3T deficit budget for fiscal year 2009

I suppose I have to clean this up. You know the beginning of 2009 was loaded with funny business from the Dem congress. By your logic the 2017 fiscal is on Obamas' tab.

The federal government ran a budget deficit of $666 billion in fiscal 2017, the biggest shortfall since 2013. The numbers: The federal government finished fiscal2017 with a budget deficit of $666 billion, an increase of $80 billion over the previous year.Oct 20, 2017

Obama is lucky Trump kick-started the economy and slowed spending somewhat.

 

[AntonToo]

????
Bush left office with 1.3T deficit budget for fiscal year 2009

I suppose I have to clean this up. You know the beginning of 2009 was loaded with funny business from the Dem congress. By your logic the 2017 fiscal is on Obamas' tab.

The federal government ran a budget deficit of $666 billion in fiscal 2017, the biggest shortfall since 2013. The numbers: The federal government finished fiscal2017 with a budget deficit of $666 billion, an increase of $80 billion over the previous year.Oct 20, 2017

Obama is lucky Trump kick-started the economy and slowed spending somewhat.

"clean up"? Hilarious.

Fiscal year 2009 began in the middle of 2008 calendar year. Bush submitted a budget around that time with 1.3T dollar deficit. Actual deficit was higher due to about 100B in Stimulus spending Obama added on.


Trump did not lower deficit, he INCREASED IT BIG TIME for 2018 with heavily front loaded tax-cuts.

 

[leftwinger]

In FY 2017 the federal deficit was $666 billion. But the gross federal debt increased by $700 billion. Here is why.

This year, FY 2018, the federal government in its latest budget has estimated that the deficit will be $440 billion.

Here is the federal deficit by year for the last decade:

Deficits in billions
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$161 $458 $1,413 $1,294 $1,295 $1,087 $679 $485 $438 $585 $666


^^ fiscal year starts OCT 01.......XXXX

 

[g5000]

See post 32, tard.

If I issue a bond that currently has a 5% coupon and the coupon goes down to 4%,
the buyer lost 1% a year, I saved 1% a year.

Could you know less about this stuff? It'd be difficult.

You are so far behind the times it is hilarious.

Were you in a coma in 2008?

Do you even know what a credit default swap is?

Do you even know what a credit default swap is?

Better than you, obviously.

That is a low bar though. LOL!

No, you clearly have no clue.

You claimed they were zero sum. About as wrong as wrong can be.

You claimed they were zero sum.

If we make a $10 bet on the Super Bowl, is that a zero sum bet? Why?

A bet on a game has NOTHING to do with a derivative. Jesus H. Christ.

 

[g5000]

Oopsie! The guys who sold us those CDS don't have $20 trillion.

You think his failure to pay out $20 trillion wiped out $20 trillion in wealth?
​

Nope. It wipes out whatever the sellers of CDS have in their reserves. Then the counterparties go begging to the government for the rest.

See: AIG.

And you thought they were zero sum!

It wipes out whatever the sellers of CDS have in their reserves.

Where does the reserve money go?

Then the counterparties go begging to the government for the rest.

Yup. And? Still zero sum.

And you thought they were zero sum!

Only because they are.