Bond rout starting to sound market alarm bells
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Re: Bond rout starting to sound market alarm bells
#2It's hard to say where the lower bound for the value of American companies is now. Is it zero?
Usually one could estimate the absolute minimum of future earnings.
But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
Re: Bond rout starting to sound market alarm bells
#3It's hard to say where the lower bound for the value of American companies is now. Is it zero? Usually one could estimate the absolute minimum of future earnings. But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
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Re: Bond rout starting to sound market alarm bells
#4> The 10-year U.S. Treasury yield , the globe's benchmark safe-haven anchor...
The US government is ~37 trillion dollars in debt and rising. They're not going to do anything to cut spending until they hit a crisis so massive that they just can't spend any more. Which is going to have to be a shocker of a crisis given how they've handled the last couple. Raising taxes seems to be off the table too.
While it is true that US treasuries are low risk, they are low risk in the way that lending the broke town drunk money are low risk - you can come up with accurate estimates of how likely you are to get the money back. The real mystery has for some time been why people persist in feeding the US government money voluntarily. The math doesn't seem to be ambiguous, the value lent can't be paid back in real terms. Foreign holders of these things are engaging in charity.
Re: Bond rout starting to sound market alarm bells
#5It's hard to say where the lower bound for the value of American companies is now. Is it zero? Usually one could estimate the absolute minimum of future earnings. But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
> It's hard to say where the lower bound for the value of American companies is now. Is it zero?
Come on, it's definitely not zero for most of the companies, even if tons of small businesses go bankrupt.
> But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
The objective of the current administration is to implement fascism. Companies can operate and make profit, as long as it’s allowed by the government. See the blackmailing of law firms and tech companies for examples.
Ironically, Thomas Sowell made that argument back when Obama dared to give Americans healthcare - https://www.creators.com/read/thomas-sowell/06/12/socialist-.... And he also rang similar alarm bells during the Biden administration - https://www.foxnews.com/media/thomas-sowell-systemic-racism-.... But he has offered nothing more than milquetoast commentary about tariffs being bad when it comes to the current administration.
Re: Bond rout starting to sound market alarm bells
#6It's hard to say where the lower bound for the value of American companies is now. Is it zero? Usually one could estimate the absolute minimum of future earnings. But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
> It's hard to say where the lower bound for the value of American companies is now. Is it zero? Come on, it's definitely not zero for most of the companies, even if tons of small businesses go bankrupt. > But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so. The objective of the current…
Companies can operate and make profit
Re: Bond rout starting to sound market alarm bells
#7It's hard to say where the lower bound for the value of American companies is now. Is it zero? Usually one could estimate the absolute minimum of future earnings. But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so.
The absolute lower bound is probably domestic consumption?
Which is still a huuuuuuuuuuuuge market
Re: Bond rout starting to sound market alarm bells
#8Many 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.
Re: Bond rout starting to sound market alarm bells
#9> The 10-year U.S. Treasury yield , the globe's benchmark safe-haven anchor... The US government is ~37 trillion dollars in debt and rising. They're not going to do anything to cut spending until they hit a crisis so massive that they just can't spend any more. Which is going to have to be a shocker of a crisis given how they've handled the last couple. Raising taxes seems to be off the table too. While it is true th…
Not charity - they are paying tribute
Re: Bond rout starting to sound market alarm bells
#10Earlier quoted context omitted.
> It's hard to say where the lower bound for the value of American companies is now. Is it zero? Come on, it's definitely not zero for most of the companies, even if tons of small businesses go bankrupt. > But the current administration seems to be set on redirecting those earnings away from investors towards the government. And I don't see what could limit the extent to which they do so. The objective of the current…
Companies can operate and make profit Why make a profit? How is an Apple that gives billions of dollars to investors (many of them abroad) better for Trump than an Apple that gives those billions of dollars to the Government which he controls? Tariffs are one way to redirect those profits.
Apple has ~30% margin, so they will just increase prices. If real SHTF with sales (since iphone 16 has had lukewarm sales already and they have 0 new shocking transformative products), they can start chipping down that part, but its a long way to go to reach competition.
Who pays for all this, as always, is common people, getting poorer. More specifically middle class, poor don't buy money-making devices from ie Apple, and rich will either stay rich or get richer if positioned well.