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Bond rout starting to sound market alarm bells

reuters.com

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Re: Bond rout starting to sound market alarm bells

#41

Post by pwatsonwailes »

zmmmmm wrote: post #11

It seems to me the core issue at hand is that Trump has made a grave strategic error in terms of who really holds more cards in the trade battle, specifically with China. This bond lever - the threat to abruptly shut off US debt supply - is just one of them. But China can also simply manage far more easily without US imports than the US can manage without Chinese imports. And for any given pain threshold, China can b…

A strategic error would imply he actually has a strategy. No-one doing anything in American government right now has a strategy.

As long as he gets to play as much golf and watch as much TV as he likes, he doesn't seem to care much. I don't think anyone bought Trump, I think he's just signing whatever is put in front of him and taking credit for it so he can go back to playing golf.

Re: Bond rout starting to sound market alarm bells

#42

Post by pwatsonwailes »

SideburnsOfDoom wrote: post #15
ENGNR wrote: post #7

Earlier quoted context omitted.

The absolute lower bound is probably domestic consumption? Which is still a huuuuuuuuuuuuge market

When the parts can't be imported, then the question is: domestic consumption of what?

Potatoes?

Re: Bond rout starting to sound market alarm bells

#43

Post by Gibbon1 »

procaryote wrote: post #14
niklasbuschmann wrote: post #8

Many people here were so confident a few days ago that the tariffs were just some 4d chess to get interest rates down, despite this not making any sense.

It's interesting that conspiracy theorists nowadays are looking for hidden plans for how the government might be working in our best interest, in spite of appearances

Some guy that writes about politics wrote something that stuck with me 'a lot of people think they are in on the grift'

Re: Bond rout starting to sound market alarm bells

#44

Post by wahnfrieden »

optimalsolver wrote: post #38
sanp wrote: post #32

Earlier quoted context omitted.

He has bankrupted a few casinos. So, he is pretty good at poker.

Bankrupting a business where you have a mathematically insurmountable edge is actually impressive.

It would be useful for laundering.

Re: Bond rout starting to sound market alarm bells

#45

Post by leovingi »

re-thc wrote: post #30
zmmmmm wrote: post #24

Earlier quoted context omitted.

Sure, yes, the fact that the US now is in a weak position built up over decades is just the reality that has to be faced. The path out of it is painful - starting with reducing US debt, and using a full complement of measures to diversify sources of goods and services (including bringing them domestically where it makes sense). It's something you do over a decade, in partnership with your allies, not a week on your o…

> Sure, yes, the fact that the US now is in a weak position built up over decades is just the reality that has to be faced. It's misinformation to say the US is in a weak position. It's not. It's just gone on to do other things. When we talk about these trade deficits do we include streaming services, television shows, films, games and whatever else? > (including bringing them domestically where it makes sense) It do…

> factories with workers below the minimum wage

China made that choice in the late 1970s and early 1980s and has progressed ever since and is now powerful enough to be able to stand up to the United States.

You have a warped view of what manufacturing is and how it can be built upon that is closer to children's cartoons than reality.

Re: Bond rout starting to sound market alarm bells

#46

Post by roenxi »

pjc50 wrote: post #25
roenxi wrote: post #12

Earlier quoted context omitted.

Even that argument is starting to fall apart. What are the theatres where the US is supposed to be able to put on a strong showing? It doesn't seem to be Europe, they've got war on their doorstep and if anyone thinks the US is helping they should reflect on their reasoning. It doesn't seem to be the Middle East, the US has made the region less safe. They're not going to be able to act effectively against China given…

> What are the theatres where the US is supposed to be able to put on a strong showing? It doesn't seem to be Europe, they've got war on their doorstep and if anyone thinks the US is helping they should reflect on their reasoning I think you have this backwards: the US was helping considerably, and then got taken over by pro-Russian conspiracy theorists. But the bond stuff isn't "tribute" or nationalism; remember, it…

> But the bond stuff isn't "tribute" or nationalism; remember, it's being made by private sector investors, not national governments.

Are you sure about that? Back in 2022 the US Treaury reckoned that most holdings were foreign governments [0] - they had Foreign Official at ~3.9 trillion and foreign total at ~7.5 trillion. That has been shifting towards the private sector since then but the market has heavy sovereign involvement.

> and imperceptible risk of default.

The US clearly has quite a high risk of default - there isn't a reasonable path to them paying the money back. It takes imagination to even come up with scenarios where they try. In real terms they are going to default, in nominal terms there is still a high chance that they call it a default. There is no guarantee that they'll print money for foreigners; it is already going to be farcical claiming that they're not defaulting as they devalue like mad; it is quite possible they won't bother with the act and just do the honest thing.

[0] https://ticdata.treasury.gov/resource-center/data-chart-cent...

Re: Bond rout starting to sound market alarm bells

#47

Post by re-thc »

leovingi wrote: post #45
re-thc wrote: post #30

Earlier quoted context omitted.

> Sure, yes, the fact that the US now is in a weak position built up over decades is just the reality that has to be faced. It's misinformation to say the US is in a weak position. It's not. It's just gone on to do other things. When we talk about these trade deficits do we include streaming services, television shows, films, games and whatever else? > (including bringing them domestically where it makes sense) It do…

> factories with workers below the minimum wage China made that choice in the late 1970s and early 1980s and has progressed ever since and is now powerful enough to be able to stand up to the United States. You have a warped view of what manufacturing is and how it can be built upon that is closer to children's cartoons than reality.

> China made that choice in the late 1970s and early 1980s and has progressed ever since

So you're saying that China has grew out of manufacturing because a lot of it is moving out of China. In the same way the US has also moved out of manufacturing ages ago.

> is now powerful enough to be able to stand up to the United States

How do you conclude that the ONLY thing China did is manufacturing?

> You have a warped view of what manufacturing is

No, it goes to show you know very little about the world. It's not all just manufacturing. That's definitely not all that China does. If it was you wouldn't have to ban Huawei and Tiktok.

Do you know how many games come from China now? A lot of US and EU game studios are at least partly owned by Chinese companies e.g. Tencent.

Re: Bond rout starting to sound market alarm bells

#49

Post by NikkiA »

procaryote wrote: post #14
niklasbuschmann wrote: post #8

Many people here were so confident a few days ago that the tariffs were just some 4d chess to get interest rates down, despite this not making any sense.

It's interesting that conspiracy theorists nowadays are looking for hidden plans for how the government might be working in our best interest, in spite of appearances

Conspiracy theories have always just been a form of confirmation bias. They theorise what matches the reality they want to have.

Re: Bond rout starting to sound market alarm bells

#50

Post by SideburnsOfDoom »

pwatsonwailes wrote: post #42
SideburnsOfDoom wrote: post #15

Earlier quoted context omitted.

When the parts can't be imported, then the question is: domestic consumption of what?

Potatoes?

Sure, even in North Korea with "Juche" (1) extreme self-reliance, there is some domestic consumption. Of potatoes, even (2). It's not that domestic consumption will go to zero.

But the point is that domestic consumption is not constant. It can decrease, it can substitute more basic goods. Such as potatoes.

1) https://en.wikipedia.org/wiki/Juche

2) https://en.wikipedia.org/wiki/Potato_production_in_North_Kor...

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