Reagan on the Debt Ceiling

[Cancel 2018. 3]

I ignored it because (1) you don't have a clue what you are talking about and (2) I have no interest in the opinions of Koch Industry lackeys.

LOL...it explains who sovereign debt is analyzed and shows your opinion that it was based on interest rate of bonds is complete rubbish....but yeah...i don't what i'm talking because that would cause you to admit you're wrong.

the article is spot on....and all you have is ad hom

lame

 

[Bonestorm]

LOL...it explains who sovereign debt is analyzed and shows your opinion that it was based on interest rate of bonds is complete rubbish....but yeah...i don't what i'm talking because that would cause you to admit you're wrong.

the article is spot on....and all you have is ad hom

lame

I declined to read the linked piece because my time is valuable and I have no interest in reading anything put out by the Mercatus Center. I have now read the piece at your insistence and it confirms that you don't know your ass from your elbow. For starters, the United States is not an emerging market so the applicability of the working paper to the United States is, well, it isn't applicable at all. Second, even assuming it were applicable it doesn't say anything about the creditworthiness of the United States at present. What we do have available to us is the interest rate the United States government has to pay to borrow money. Typically, folks look to the 10 year note as a gauge. To put it simply, where the market believes there is some risk that the United States will default on its repayment obligations, interest rates are higher and where the risk is lower, the rates are lower. Here is a chart of rates dating back to 1962:

As you can see, rates are quite low by historical standards and are substantially lower that in 1983 when President Reagan wrote the letter linked above. To pretend that the United States is less creditworthy now when it can borrow at an interest rate of about 3.18% as compared to over 10% in 1983 you have to be either stupid or dishonest. You choose.

 

[Cancel 2018. 3]

you are an ignorant jack wagon...to claim that only the interest rates, which are SET BY THE FEDS (which shows are dumb you are, because you're saying the FEDS get to say what others think of our credit...LOL) is what determines our credit worthiness is so moronic it is laughable....the analysis does not apply ONLY to emerging markets....nice try nigel, but your embarrassing spin from the truth is, well....embarrassing

in order to believe your bullshit, we would have to believe that our credit worthiness was LESS under reagan, bush, clinton, bush....that is such nonsense....that you would attempt to peddle such bullshit only proves you're incapable of ever admitting you're wrong, you would rather dig your heels in, cover your ears, bash the source and then make shit up

 

[Rune]

Yurt, stupid or dishonest?

 

[Cancel 2018. 3]

Yurt, stupid or dishonest?

way to debate and show your knowledge....though i would expect no more from you because you're a mental midget

you can't explain why i'm wrong, but since you don't like me and you're a liberal, you just had to make a dumb comment and blindly hope nigel is right because he is on your side

 

[Bonestorm]

you are an ignorant jack wagon...to claim that only the interest rates, which are SET BY THE FEDS (which shows are dumb you are, because you're saying the FEDS get to say what others think of our credit...LOL) is what determines our credit worthiness is so moronic it is laughable....the analysis does not apply ONLY to emerging markets....nice try nigel, but your embarrassing spin from the truth is, well....embarrassing

Superfreak, can you talk to your boy Yurt and explain the difference between the federal funds rate and 10-year Treasury rate? He is hopelessly confused.

in order to believe your bullshit, we would have to believe that our credit worthiness was LESS under reagan, bush, clinton, bush....that is such nonsense....that you would attempt to peddle such bullshit only proves you're incapable of ever admitting you're wrong, you would rather dig your heels in, cover your ears, bash the source and then make shit up

Not really. All you really have to believe is that an entity that can borrow at 3% interest
is more creditworthy than an entity that can borrow at a 12% interest rate. There are obviously other factors in play that determine the rate and the rate alone does not tell the entire story, but this basic point should not be too hard for even you to grasp.

 

[Rune]

Yurt, stupid or dishonest?

 

[Cancel 2018. 3]

i asked dungheap to provide any news articles that stated the US credit worthiness was in danger during the 80's, he of course has not....today we have numerous such news articles from, not only S&P, but from moody. i'm sure nigel will now claim moody is not reliable either, because anything that doesn't fit his world view doesn't count, that way, he can continue to live his fantasy world where he never wrong.

further, he has not provided one source to back up his opinion

 

[Cancel 2018. 3]

Yurt, stupid or dishonest?

Very well written and thoughtful dune.

 

[Rune]

Very well written and thoughtful dune.

Your welcome.

 

[Cancel 2018. 3]

Your welcome.

did your mom teach you spell? i guess you were lying when you said we could be friends and you wanted to bury the hatchet.....oooops...that proves me right.

 

[PostmodernProphet]

Reagan started the service economy, remember?

no....but in any event, it's liberals who've made it an agenda.....

 

[Rune]

did your mom teach you spell? i guess you were lying when you said we could be friends and you wanted to bury the hatchet.....oooops...that proves me right.

Spelling you are improperly prooves what?

 

[Rune]

no....but in any event, it's liberals who've made it an agenda.....

Maybe these links will refresh your memory;


http://www.infoplease.com/t/hist/state-of-the-union/196.html
http://www.huffingtonpost.com/will-bunch/tearing-down-the-reagan-m_b_443914.html
http://www.thomhartmann.com/blog/20...ervice-economy-under-reagan-bush-clinton-bush
http://tabright.com/2009/05/01/shift-to-a-service-economy-is-not-limited-to-the-us/

 

[Cancel 2016.2]

No, not raising the debt ceiling would lead to default. It's pretty obvious.

No, what it ACTUALLY means is that the idiots in DC could no longer out spend their revenue.... THAT is what it means

 

[Cancel 2016.2]

I declined to read the linked piece because my time is valuable and I have no interest in reading anything put out by the Mercatus Center. I have now read the piece at your insistence and it confirms that you don't know your ass from your elbow. For starters, the United States is not an emerging market so the applicability of the working paper to the United States is, well, it isn't applicable at all. Second, even assuming it were applicable it doesn't say anything about the creditworthiness of the United States at present. What we do have available to us is the interest rate the United States government has to pay to borrow money. Typically, folks look to the 10 year note as a gauge. To put it simply, where the market believes there is some risk that the United States will default on its repayment obligations, interest rates are higher and where the risk is lower, the rates are lower. Here is a chart of rates dating back to 1962:

As you can see, rates are quite low by historical standards and are substantially lower that in 1983 when President Reagan wrote the letter linked above. To pretend that the United States is less creditworthy now when it can borrow at an interest rate of about 3.18% as compared to over 10% in 1983 you have to be either stupid or dishonest. You choose.

We have already explained to you time and again why your interest rate line is simply bullshit. We are absolutely less creditworthy than we were in 1983.... hence the negative credit watch today vs. no such thing in 1983.

You also ignore the FACT that one reason our rates haven't climbed is because we are playing games with the debt via QE1 and QE2.

You also ignore the FACT that to compare apples to apples, you have to look at where rates are relative to foreign rates.

But please, continue to ignore all of the above..... continue parroting whatever your masters spoon feed you.

 

[Cancel 2016.2]

Superfreak, can you talk to your boy Yurt and explain the difference between the federal funds rate and 10-year Treasury rate? He is hopelessly confused.

sure.... The Fed sets the FED Funds rate.... the rate at which banks can borrow from the Fed.

The Ten year note (along with all others) rate will vary based on market supply/demand coupled with speculation on where rates will go in the future. This rate is NOT set by the Fed. It IS however currently being manipulated by the Fed via QE1 and QE2. The Fed is creating a false demand for the bonds which is keeping rates low despite the insane levels of spending from DC.

All Treasuries/corps/munis trade based off a risk/return yield curve based on the Fed funds rate. If the Fed drops the Fed Funds rate to 0.25% then the entire yield curve will come down. THIS is the point that Dung cannot grasp. The RISK factor is the difference between the Fed funds rate and whatever maturity one is looking at for Treasuries/corps/munis.

In 1983, the Fed Funds rate was 9.09 and the 10 year Treasury Dung mentions was at 11.1 a difference of 2.01%
As of last night.... the Fed Funds rate was 0.21 (but we will use 0.25 as that is the official target) and the 10 year Treasury bond was at 3.31..... a difference of 3.06%.

Therefore the RISK is GREATER today than it was in 1983.... despite all of Dungs chirping.

 

[Bonestorm]

We have already explained to you time and again why your interest rate line is simply bullshit. We are absolutely less creditworthy than we were in 1983.... hence the negative credit watch today vs. no such thing in 1983.

First of all, Yurt has no idea what he is talking about. Neither does Damo. You are the only person that actually understands the issue and that has raised legitimate issues concerning whether the 10-year Treasury Note interest rate is reflective of our actual creditworthiness.

But just asserting that we are more creditworthy today than in 1982 without any empirical support for the claim does not make it so. The negative credit watches were received by the market with a big fat yawn. No one cared.

You also ignore the FACT that one reason our rates haven't climbed is because we are playing games with the debt via QE1 and QE2.

I don't ignore it and recognize that it is a legitimate critique. I just don't see QE2 (QE1 is over) accounting for the almost 900 basis point gap between where we are today and where we were in December 1983. I suppose we shall see what happens in June and thereafter as QE3 is not likely.

You also ignore the FACT that to compare apples to apples, you have to look at where rates are relative to foreign rates.

I am comparing apples to apples, the interest rate on a 10-year Treasury Note now to the interest rate on a 10-year Treasury Note in 1983. You want to look at additional factors in explaining why the present interest rate is so low, but that does not mean that I am not comparing apples to apples.

But please, continue to ignore all of the above..... continue parroting whatever your masters spoon feed you.

FARGLE BARGLE.

 

[Cancel 2016.2]

First of all, Yurt has no idea what he is talking about. Neither does Damo. You are the only person that actually understands the issue and that has raised legitimate issues concerning whether the 10-year Treasury Note interest rate is reflective of our actual creditworthiness.

But just asserting that we are more creditworthy today than in 1982 without any empirical support for the claim does not make it so. The negative credit watches were received by the market with a big fat yawn. No one cared.




I don't ignore it and recognize that it is a legitimate critique. I just don't see QE2 (QE1 is over) accounting for the almost 900 basis point gap between where we are today and where we were in December 1983. I suppose we shall see what happens in June and thereafter as QE3 is not likely.

Yes, QE1 is over, the point is that the two programs are what are keeping rates artificially low by creating more demand from nothing. I will assume you were writing this as I was posting my last response that shows you the true measure of risk....

I am comparing apples to apples, the interest rate on a 10-year Treasury Note now to the interest rate on a 10-year Treasury Note in 1983. You want to look at additional factors in explaining why the present interest rate is so low, but that does not mean that I am not comparing apples to apples.

Yes, you are comparing the yields of the Ten year from then to now. FROM that you can say the 10 year was higher in 1983. But you CANNOT say that risk was greater as you are not taking the 10 year rate relative to the rest of the worlds interest rates, nor are you taking it relative to the remaining portion of OUR yield curve. THAT is where you are making your mistake.

 

[Bonestorm]

sure.... The Fed sets the FED Funds rate.... the rate at which banks can borrow from the Fed.

The Ten year note (along with all others) rate will vary based on market supply/demand coupled with speculation on where rates will go in the future. This rate is NOT set by the Fed. It IS however currently being manipulated by the Fed via QE1 and QE2. The Fed is creating a false demand for the bonds which is keeping rates low despite the insane levels of spending from DC.

All Treasuries/corps/munis trade based off a risk/return yield curve based on the Fed funds rate. If the Fed drops the Fed Funds rate to 0.25% then the entire yield curve will come down. THIS is the point that Dung cannot grasp. The RISK factor is the difference between the Fed funds rate and whatever maturity one is looking at for Treasuries/corps/munis.

In 1983, the Fed Funds rate was 9.09 and the 10 year Treasury Dung mentions was at 11.1 a difference of 2.01%
As of last night.... the Fed Funds rate was 0.21 (but we will use 0.25 as that is the official target) and the 10 year Treasury bond was at 3.31..... a difference of 3.06%.

Therefore the RISK is GREATER today than it was in 1983.... despite all of Dungs chirping.

My understanding is that the spread between the federal funds rate and the 10-year is reflective not of the risk of lending to the United States of America, but rather is an early indicator of economic expansion or contraction. A larger spread is indicative of expected growth whereas a lower (or inverted) spread signals a likely recession. So I don't really follow your point.

Can you link me to something that explains it more comprehensively? And I ask this in all seriousness.