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Member Since 01 Jan 2004
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In Topic: EC 490 Macroecon and monetary policy

Today, 02:53 PM

After the market for Treasuries more than doubled since the financial crisis to $12.8 trillion as the government ran deficits to bail out banks and support the economy, the U.S. has started to scale back supply.

One reason is the narrowing budget gap. With the Fed holding its benchmark rate near zero since December 2008, the jobless rate has fallen by half from its post-crisis peak in 2009, to 5 percent today. As tax revenue increases, the Congressional Budget Office forecasts the shortfall will narrow to $414 billion in the fiscal year ending Sept. 30, 2016, from $439 billion in the previous 12 months and $483 billion in the prior annual period.

To lock in record-low long-term borrowing costs, the government has also lengthened the average maturity of its debt to 5.8 years from 4.1 years at the end of 2008. One consequence is that the Treasury market’s share of bills has shrunk to about 10 percent, the smallest in Bloomberg data going back to 1996.

The Treasury and Wall Street strategists say it’s now time to reverse that to build the government’s stores of cash and as post-crisis regulations increase demand for ultrasafe, short-term assets like bills.

“The Treasury had previously focused on raising the maturity of their debt,” said Jay Barry, a U.S. fixed income strategist at JPMorgan Chase & Co. Now, “they can focus on increasing bill issuance as demand is set to rise.”

And the picture would change rapidly if the Fed decides to stop reinvesting the money from the maturing debt it owns back into Treasuries. The Fed has amassed $2.5 trillion in Treasuries, largely from its quantitative-easing programs, and has $216 billion of the debt coming due in 2016.

On the other hand, Fed officials have repeatedly said they will raise rates gradually,which may ultimately help avert a sudden selloff in bonds. Mutual fund investors bought a record 42 percent of the $1.6 trillion in notes and bonds sold at auctions through September, up from 18 percent in 2011.

In Topic: On going multi location attacks in Paris.

Today, 02:41 PM

View PostHoganknows, on 30 November 2015 - 12:31 PM, said:

The game just changed:


So you're the russian insider now.... interesting source comrade.

In Topic: On going multi location attacks in Paris.

Today, 01:23 PM

View PostForwardRebels, on 30 November 2015 - 10:57 AM, said:

Welp, looks as though the Yuan is set to become one of the multiple reserve currencies of the IMF; one step closer to becoming THE world's reserve currency, but WTF do I know, @DakWillAlwaysBe2ndBest?

Here's the problem.... The main obstacle was China’s monetary policy, which has kept the yuan artificially low to boost domestic exports.   So you're not going to see a huge market for Beijing bucks.

Let me ask you a question.... do you quote the Russian Times often?

In Topic: Paris Climate Talks

Today, 12:14 PM

We really didn't understand space either, but we decided to go to the moon anyway.

The first rain maker will rule the world.

In Topic: TRB's thoughts on Georgia and Richt

Today, 09:10 AM

If I'm the head coach, I'd want my own people who are only accountable to me.   Pruitt's already divided Richt's team, why would the next coach take a chance on him now?

The only way Pruitt stays at UGA is as the new head coach.

View PostTheRealBrave, on 30 November 2015 - 08:33 AM, said:

No. We now know what happened with Pruitt btw. I'll just say Alabama boys don't like mouthy yankees, especially when their side of the ball is awful. Pruitt is the man, I would be ecstatic if he stays on as DC which many insiders are saying is possible