It makes no difference who gets the extra money from the Fed, because the recipient is no wealthier than before (money is swapped for bonds) and hence they have no incentive to spend any more. Rather the impact occurs in the AGGREGATE. Total holdings of the base now exceed total base demand . . . → Read More: It’s A Wonderful Theory
It was telling that just as the ECRI and other notable research outfits decided to push recession button on the US economy the data flow became notably more positive. This could be a sign of the times that the cycle is just too volatile for even capable analysts to call or it could simply . . . → Read More: Random Shots – Is it Over Yet?
So I saw the notice that some Port Authority debt was being rated and didn’t think much of it.. Of course, the way this works is that new debt ratings like that don’t normally happen spontaneously, but reflect some new debt offering or other big change. So it comes as no big surprise that . . . → Read More: Bad Bonds, Bad Bonds, Watcha Gonna Do?
Just before we turned the clock on 2010 I commented on the recent increase in US yields and noted the following simple issue;
How investors perceive and interpret this will [rising yields] determine great many things; is it a reflection of higher growth in the future and thus a sooner than expected normalisation by . . . → Read More: The Verdict on US Bond Yields?
Last year’s stimulus package included a program for states and municipalities entitled “Build America Bonds.”
The U.S. Treasury announced that so far it is on target to save those local governments $12.3 billion in borrowing costs with federally subsidized taxable bonds already sold during the first year of the program.
Since the stimulus passed . . . → Read More: Treasury Assists with $90B in Bonds: Saves States $12B