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Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
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Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#82The problem is that Europe doesn't have a European bond market to compete against the US bond market. It has the economic size and stability but not the will right now. Europe did try it a bit during COVID but financial services are just not there yet. The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.
Is it at all realistic to expect the stable and/or fiscally conservative countries to accept the high bond yields imposed by the more fiscally loose or perceived-risky countries? Could this ever happen without the EU centralising more control over fiscal policy?
No, it wouldn't work without the bond repayments being owed by a single fiscal entity, and hard to imagine Europe doing this for the foreseeable future even if they agree more tax harmonization and budget deficit rules.
But from the bondholder perspective, being able to pick and choose which countries to hold Euro denominated debt according to their risk tolerance is an advantage anyway.
Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#83Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#84Earlier quoted context omitted.
> The CFR Sovereign Risk Tracker can be used to gauge the vulnerability of emerging markets to default on external debt. Sort of definitionally, nothing in that list is going to be more politically stable than the US. In the second link, the author gives slightly lower country risk premiums (0% vs 0.2%) to Australia, Canada, Denmark, Germany, Liechtenstein, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Swe…
Nothing is risk-free. But Canada is certainly more politically stable than the US.
All historically-stable Western nations seem to be subject to the same influences that brought us Trump, though.
They (we) are all under attack.
Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#85Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#86US 10- and 30-year bonds are trading at their highest yields (lowest prices) since, uh, August/September 2025. Or in historical context, rates that were more common before 2007 and the ZIRP period.
Some additional context: on March 10, 2023, which is the date that Silicon Valley Bank collapsed, 30 year treasuries had a yield of 3.70.
Today the yield is ~4.9.
Now, in 2026, how many institutions are "picking up pennies in front of steamrollers" ?
Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#87Earlier quoted context omitted.
Avalanches can start with a single stone. EU together with UK and Canada hold more Treasurys than the entire rest of the world combined, and if they dumped them all at once it would be significantly painful for the average American as interest rates would spike, as would inflation. The Dollar would decline against most other major currencies. However dumping that much debt all at once would require the sellers to hea…
The fed would almost certainly intervene aggressively resuming large scale QE to buy up treasuries and stabilize yields.
don't worry, because financial ouroboros
Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#88What would be more serious is if the Norwegian Government Pension Fund started to sell off US investments. That runs around $2 trillion.
You have no idea how that would destroy the Norwegian State. They are addicted to money from that fund. A collapse in it's value would have direct impact on the finances of the state. Nearly 1/4 of the budget is funded from that found a year.
That's got to be a tiny amount relative to the fund size though.
Anyway, how would that destroy the fund? They'd be selling it not giving it away.
Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds
#89Earlier quoted context omitted.
Avalanches can start with a single stone. EU together with UK and Canada hold more Treasurys than the entire rest of the world combined, and if they dumped them all at once it would be significantly painful for the average American as interest rates would spike, as would inflation. The Dollar would decline against most other major currencies. However dumping that much debt all at once would require the sellers to hea…
The fed would almost certainly intervene aggressively resuming large scale QE to buy up treasuries and stabilize yields.
>The fed would almost certainly intervene aggressively resuming large scale QE to buy up treasuries and stabilize yields.
Indeed and QE is a major inflationary pressure.