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Global bond yields hit 2008 highs, raising stakes for big borrowers

reuters.com

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Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#41

Post by outside1234 »

method_capital wrote: post #7
tananaev wrote: post #2

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas. Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

More likely they are going to "monetize" the debt. Aka print yen to pay it off.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#42

Post by pjc50 »

danans wrote: post #9
pjc50 wrote: post #6

The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive. You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.

> You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining. What's different between the two is that apparently China hasn't made an equivalent dent in its oil reserves, despite no significant reduction in travel, and despite reducing its import demand by 1 OPEC. It's not entirely clear how - but theories include shifts from flights to train travel…

> China hasn't made an equivalent dent in its oil reserves

I think the easiest explanation is that this probably isn't true. The US SPR is underground, it would be quite easy for China to manage its equivalent in secret, for whatever reasons.

The Chinese EV shift is real and significant, though.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#43

Post by outside1234 »

method_capital wrote: post #28
huurtehoog wrote: post #21

Earlier quoted context omitted.

Japan is closer to 130% debt-to-gdp. The 200% number is based on gross debt and ignores some other mitigating factors for shock value.

Great. Rates going higher increases interest expense materially. You either rack new debt or you cut in places that are uncomfortable. The point is: responsible leadership in the developed world has gone mia for decades. There's a price to be paid that's real.

Or you print lotsa yen, which is probably what will happen here

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#45

Post by kingleopold »

rdm_blackhole wrote: post #18

France is in a dire situation right now. 10y OAT are at 4.5% and rising with almost 100bps difference with Germany and no budget for 2027 since there is no majority in the parliament. There is also a 6% deficit expected and growth has been revised down to 0.4% although during the first 6 months of 2026 there was actually a decrease of 0.2% of GDP in total so finishing the year in recession is totally possible. Unempl…

more social security will fix this I think? they need to spend 100Billion more on that so long term they can go into more debt.

/s

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#46

Post by AnimalMuppet »

kingleopold wrote: post #31
method_capital wrote: post #7

Earlier quoted context omitted.

Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas. Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

japan is an empire, longest one too, you can't vote for that LMAO

Except that the emperor doesn't actually rule Japan - the Diet does, and you can vote for them.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#47

Post by method_capital »

ajross wrote: post #33
llm_nerd wrote: post #22

Earlier quoted context omitted.

I feel like there is an inside joke here, so I apologize if I am being a bit spectrum-y taking it at face value. Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe. Like the US is catastrophically indebted -- both parties have been negligent on t…

> the US is catastrophically indebted Debt service costs as a percent of GDP are in fact lower than they were in the 1980's, when things came out fine. Is this the best way to run the budget? Likely no. Should we make policy changes? Certainly yes. Is the best way to drive that policy argument flinging around adjectives like " catastrophically indebted". No. If you have a suggestion make a suggestion. Screaming about…

Buffett claimed you could solve the deficit problem instantly by firing congress when they run deficits. Obviously, untenable (they'll cheat, admin overhead, etc).

You could very easily force congress to balance the budget (both parties and the media have complained endlessly about this for exactly no good reason). You could also freeze spending at current levels and force congress to do it's job: allocate our limited resources most productively.

Hard to get re elected doing the right thing, but maybe we just need a throw away set of leaders to do the hard work?

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#48

Post by kingleopold »

AnimalMuppet wrote: post #46
kingleopold wrote: post #31

Earlier quoted context omitted.

japan is an empire, longest one too, you can't vote for that LMAO

Except that the emperor doesn't actually rule Japan - the Diet does, and you can vote for them.

Good luck with that after literally a thousand and more years, they can be most violent if times comes,

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#49

Post by llm_nerd »

ajross wrote: post #33
llm_nerd wrote: post #22

Earlier quoted context omitted.

I feel like there is an inside joke here, so I apologize if I am being a bit spectrum-y taking it at face value. Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe. Like the US is catastrophically indebted -- both parties have been negligent on t…

> the US is catastrophically indebted Debt service costs as a percent of GDP are in fact lower than they were in the 1980's, when things came out fine. Is this the best way to run the budget? Likely no. Should we make policy changes? Certainly yes. Is the best way to drive that policy argument flinging around adjectives like " catastrophically indebted". No. If you have a suggestion make a suggestion. Screaming about…

> Debt service costs as a percent of GDP are in fact lower than they were in the 1980's

This is an amazing use of the "in fact" trope, in exactly the same misleading way[1]. I talked about debt, and you casually shifted to servicing costs which presumes that rates stay historically low...when they're actually rapidly rising. Comical.

In the 1980s, the debt to GDP ratio was less than half what it currently is. Rates were higher, making the debt a crisis level then, but maybe you haven't noticed...rates are going up. Indeed, right now the rates were historically low, and anyone with functioning grey matter saw what was coming.

The US has an absolutely solidified, structural deficit -- utterly zero chance of paying down the debt, and a desperate need to constantly be borrowing more -- and an enormous debt. The trajectory of rates say this is crisis levels.

It's actually kind of funny reading your ridiculous comment -- "screaming", "echo chamber", etc -- when you sound completely in denial.

Your argument is basically the guy that used the "0% interest for six months" checks he just got with his 28% credit card, telling everyone that it's free money, so there's no problem if he goes wild. ROFL.

Sounds like it's time for a $1.5T military budget and a $1.3T bribe! Free money!

Sidenote: When asked about the bond market, Trump seriously offered up the "military solution". Utter insanity.

[1] - It's also simply a lie, making this extra funny. The highest historic servicing cost was 3.2% of GDP. It is currently projected at 3.3%, and that presumes rates don't keep spiralling up. So your "in fact" was simple bullshit, even as you tried the narrative shift by changing from debt to servicing costs.

Re: Global bond yields hit 2008 highs, raising stakes for big borrowers

#50

Post by neilwilson »

whatever1 wrote: post #34
llm_nerd wrote: post #22

Earlier quoted context omitted.

I feel like there is an inside joke here, so I apologize if I am being a bit spectrum-y taking it at face value. Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe. Like the US is catastrophically indebted -- both parties have been negligent on t…

Not sure it plays out that determistically. If the gov prints money to just payoff debt without increasing the government spending, there is no new money entering the market. You just pay off old promises that were expected to be kept. The real risk is that new lenders will not be willing to lend you, yes. But not outright inflation.

That assumes the new lenders have an aggregate alternative.

If you follow the accounting in a floating exchange rate system you’ll find they don’t.

Find me a banker that will turn down free basis points and I’ll show you a pink unicorn.

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