Wednesday, October 25, 2023
It's remarkable how backward and unimaginative Elon Musk's thinking can be
How many tanks, guns, and drones can you make relative to the other side? That's what it comes down to. And it may be the case, if not now, in the future it probably will be, that a Russia-China-Iran alliance can outproduce the Western alliance.
Here.
Monday, October 23, 2023
US Treasury yields making new highs for this cycle as of Oct 19, 2023
Massive Treasury issuance to pay for massive pandemic spending has driven yields higher.
It's the law of supply and demand: Increase the supply of US Treasury debt and the price goes down.
Previously issued securities paying lower interest rates drop in price because they are much more plentiful in comparison with the new issues paying higher rates which investors demand.
Who wants 'em?
Banks are estimated to be stuck with these dogs in quantities approaching what the Fed has let roll off, which is what they also must do. The collateral backing banks, insurance companies, pension funds, et cetera et cetera et cetera, suffers.
The Federal Reserve Bank's role as a big buyer in the bond market has been curtailed since 2Q2022, removing its big price support role. As of 3Q2023 the balance sheet is down $768 billion as securities mature. That's about $51 billion rolling off per month, and no net buying to replace it.
The Fed has also raised the Federal Funds Rate to an average of 5.33 to combat inflation.
So yields have risen for such reasons to these records for this cycle to date, but it's all predicated on the US Treasury having to dilute the supply:
1MO 6.02 5/26/23 (debt ceiling disagreement)
3MO 5.63 10/6/23
6MO 5.61 8/25/23
1Y 5.49 9/27/23
2Y 5.19 10/17/23
3Y 5.03 10/18/23
5Y 4.95 10/19/23
7Y 5.00 10/19/23
10Y 4.98 10/19/23
20Y 5.30 10/19/23
30Y 5.11 10/19/23.
In the aggregate as of Oct 20 yields are up a net 22% year over year to an average of 5.25692 from 4.30846 when all the wizards of smart said they couldn't possibly go any higher without breaking something.
They're still saying that.
US pandemic debt orgy described as fiscal slippage lol
It's so indicative of our degeneracy how economic profligacy must not be described that way in this day and age where anything and everything is great, awesome, and epic but that.
Oh well, at least they still pay a modicum of respect with huge, swelled, and deluge.
If only all that cash were a tsunami, inundating the shore with ruinous inflation.
CNBC, here:
. . . investors are also pricing in surprising economic resilience alongside fiscal slippage.
The U.S. federal government ended its fiscal year in September with a fiscal deficit of almost $1.7 trillion, the Treasury Department announced on Friday, adding to a huge national debt totaling $33.6 trillion. The country’s debt has swelled by more than $10 trillion since the onset of the Covid-19 pandemic in the first quarter of 2020, prompting a deluge of fiscal stimulus to help prop up the economy.
Sunday, October 22, 2023
Josh Boswell speculates the $5.2 million discrepancy in Joe Biden's 2017-2019 income is Burisma money of which $2.744 million was used in 2017 cash purchase of Joe's beach house
DailyMail.com has discovered that then-private-citizen Biden, who had spent virtually all his adult life in public service, bought the home for slightly under $2.75million – in cash. And making the transaction even stranger it was within weeks of a highly questionable text that Hunter had sent to Runlong 'Raymond' Zhao, an associate at Chinese oil giant CEFC asking to seal a deal worth $10 million a year. ...
Property records show Joe's six-bedroom second property was purchased on June 8, 2017 for $2,744,001 – just seven weeks before his son's shakedown messages. ...
An analysis published last year by DailyMail.com shows a $5.2 million discrepancy between his IRS filings and his Office of Government Ethics disclosures for the same period. ...
The figure is surprisingly similar to the $5 million Joe was allegedly bribed by Mykola Zlochevsky, the owner Ukrainian gas firm Burisma, according to information received by a trusted FBI informant.
The whole thing is here.
Friday, October 20, 2023
Left wing attorney Ken Chesebro pleads guilty to one felony count in Georgia election interference case, Sidney Powell to six misdemeanor counts
Kevin Breuninger for CNBC calls Powell a right-wing attorney, but to him long time left-wing ally of Laurence Tribe Ken Chesebro is just a Trump campaign attorney.
They both face fines and long probationary periods in exchange for rat-finking on the others.
Vanguard's long term Treasury fund, started in 1986, set a new all time low price record yesterday: What a coincidence
VUSTX fell to $7.37 yesterday, October 19, 2023.
Until the bond debacle of 2022, the lowest price ever was set way back in 1987, also on October 19, aka Black Monday, when the S&P 500 crashed 20.47% in its worst single day ever.
2022's new all time low for VUSTX at 8.16 had occurred on October 24, missing the anniversary of the old all time low by just three days. Also a very odd coincidence.
The debacle has only continued in 2023, and VUSTX prices haven't seen $8 since September 22nd.
ZIRP since the Great Recession is ultimately to blame for the current mess in long term Treasury securities. The clamor it created for yield drove bond investors long, culminating in the highest nominal prices ever paid for long term UST in March 2020, and the lowest yields. 30Y UST yield crashed to 0.99% on March 9, 2020, 20Y to 0.87%. Yields across the board in 2023 for 2Y to 30Y have set records for this cycle in October. Yesterday 20Y demanded 5.30%, 30Y 5.11%.
No one wants that 2020 and prior junk now, so wherever it sits it's causing collateral problems, at banks, insurance companies, pension funds, et cetera. And on the Fed's balance sheet: As of October 18th the Fed has $1.503922 trillion of UST maturing in more than 10 years on its balance sheet. It basically has to keep it until it matures, and it pays it very little to return to the Treasury as it does.
Are prices done falling?
Confident pretenders said so a year ago this month, and now here we are with $TLT investors down another 12.22% since then.
Given the obscene overvaluation of stocks, and the demand for higher yields by bond investors, cash still seems the safest place to be. VMRXX, Vanguard Cash Reserves Federal Money Market Fund Admiral Shares, has returned 4.00% ytd. You continue to lose to inflation, however.
Nothing is ever perfect.
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| 1987 high and low |
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| 2022 high and low to the left, all time high and low to the right |
Thursday, October 19, 2023
Judge Ann M. Donnelly, appointed by Obama in 2015, sentences "Ricky Vaughn" to 7 months in jail for trying to dupe stupid people on Twitter to vote for Hillary by text message
In the immortal words of Harry Reid, Hillary didn't win, did she.
Thank you, Ricky.
Wednesday, October 18, 2023
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