Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (59172)	12/19/2009 4:38:30 AM
From: TobagoJack	1 Recommendation Read Replies (2) \| Respond to of 218134

just in in-tray player 1: I think it could get interesting with this part if they can not find buyers for the debt. I expect a big difference in outcome between selling the debt or printing to buy the debt. Hyperinflation lurks while I am in reasonable shape for 30 to 100% annual inflation 100% daily inflation would have me living without comforts which is a personal concern. They are busy trying to collect more taxes with health care reform and cap & trade but it seems they are not fully commited to that because it seems they are letting a lot of the new collections get diverted to the politically connected. I have also not seen any commitment to reducing government cost beyond attacks on Medicare and talk of an attack on Social Security which is expected because the politically connected care less about Medicare and Social Security compared to other things. The US budget and debt is my primary concern as I think the way the US handles it's budget is key to how we need to be positioned. While I can see Hyperinflation as a big concern I can also see us getting through this in a 70s devalue - inflate fashion IF the government can bring the budget into long term balance. If the debt was transfered to the Fed balance sheet they would be free to raise the interest rate to any level they wanted because the Fed interest come back treasury as income after Fed expenses so I think the common idea they can never raise the interest rate without defaulting because the interest payments would be higher than tax receipts is not correct. A high interest rate would be a big help if we were able to repeat the 70s devalue - inflate solution and it seems to me the politically connected would like devalue - inflate over hyperinflation if the politically connected are capable of thinking it through. I see no hope of the elected thinking it through and acting for the good of the country without the consent of the politically connected which is the best reason I know of for owning gold. Although the US federal budget deficit may have peaked in F2009 (both in dollar terms and as a percentage of GDP), Treasury coupon issuance will continue to be pushed higher. This reflects an attempt to gradually boost the average maturity of the Treasury debt outstanding from its current level of about 4 years up to 6-7 years. Such a swing would take the average maturity from a historically low level at present to a level that is historically quite high. Thus, not only is gross coupon issuance poised for another sharp jump in F2010, but the average maturity of the issuance will have to move higher if the Treasury is to move toward a 6-7-year average maturity for the outstanding debt. In short, we expect upcoming auctions to tilt steadily toward longer maturities, much as has occurred in the most recent announcements. The shift from 20-year to 30-year TIPS also supported efforts to boost maturities. The trend to longer maturities is likely to continue through mid-2010. Beyond that point, we suspect that short-dated issuance (2s and 3s) may be reduced while longer-dated supply remains elevated. Why does the Treasury want to lengthen the duration of its debt? Treasury bill issuance soared in recent years and the average maturity fell, as is typical when there is a sharp and sudden spike in the borrowing need. The Treasury now wants to rein in the bill supply and begin to normalize the maturity profile. Why is it planning to go beyond historical norms? Treasury officials appear to want to create a cushion of borrowing capability at the front end of the curve in case there is a sudden need for short-term funding. Also, even though the Treasury's public position is that it is not an opportunistic borrower - i.e., it doesn't try to time the market - it appears advantageous to attempt to lock in low long-term borrowing costs at present. player 2: The US Treasury has no chance.... The last 30-year auction was not well received and quite messy. The real buyers at the moment are foreign governments and banks. If the US Dollar continues to strengthen, then the foreign governments become a diminished buyer. Banks are big buyers, as they incur no risk, can leverage up, and it is safe. However, almost no bankers that I know of are going to borrow 30 days to lend 30 years. So banks will buy comfortably with a 2-year duration and out to around 5 years maturity. But hardly anyone wants to buy anything on the longer end, save some pension funds who need the longer duration, but they're likely to buy high-grade corporate instead. Lousy risk-return. So who is left to buy longer dated paper? Very few, I would think. So if the Treasury wants to raise the amounts offered on the long end, go ahead. But I think they'll be disappointed in the reception. This is one point where I disagree with Paul Tudor Jones' and his argumentation for a flatter yield curve. The Fed is going to be at near-zero for a long time, and when the Fed quits buying mortgage paper at the end of March, along with a near buyers strike from investors, along with alleged significantly increased supply tells me that the yield curve will remain very steep and perhaps go much steeper (300+ bp on the 2's-10's curve) that most anyone expects. This is why I'm comfortable owning stocks such as Annaly Mortgage. Bought it last November at $11.00 and has paid me $3.04 in dividends by the end of January..... Their earnings and dividends are very highly correlated with the steepness of the yield curve. Feel free to pile on and tell me where I am wrong.

To: Cogito Ergo Sum who wrote (59172)	12/19/2009 12:31:54 PM
From: abuelita	1 Recommendation Read Replies (1) \| Respond to of 218134

i'm not very confident in anything right now. monbiot has always held back from throwing in the towel, from saying it is too late, because we have to keep on believing, working to reverse global warming. we can never give up. however, i think this is the first time that i have read monbiot sounding so defeated, so hopeless. monbiot.com Scramble for the Atmosphere Posted December 18, 2009 The useless, destructive talks at Copenhagen show that the treaty-making system has scarcely changed in 130 years. By George Monbiot. Published in the Guardian 18th December 2009 First they put the planet in square brackets, now they have deleted it from the text. This is no longer about saving the biosphere: now it’s just a matter of saving face. As the talks melt down, everything that might have made a new treaty worthwhile is being scratched out. Any deal will do, as long as the negotiators can pretend they have achieved something. A clearer and less destructive treaty than the texts currently being discussed would be a sheaf of blank paper, which every negotiating party solemnly sits down to sign(1). This is the chaotic, disastrous denouement of a chaotic and disastrous summit. The event has been attended by historic levels of incompetence. Delegates arriving from the tropics spent ten hours queuing in sub-zero temperatures without shelter, food or drink, let alone any explanation or announcement, before being turned away. Some people fainted from exposure; it’s surprising that no one died. The process of negotiation is just as obtuse: there’s no evidence here of the innovative methods of dispute resolution developed recently by mediators and coaches, just the same old pig-headed wrestling. Watching this stupid summit via webcam (I wasn’t allowed in either), it strikes me that the treaty-making system has scarcely changed in 130 years. There’s a wider range of faces, fewer handlebar moustaches, frock coats or pickelhaubes, but otherwise, as the world’s governments try to decide how to carve up the atmosphere, they might have been attending the Conference of Berlin. It’s as if democratisation and the flowering of civil society, advocacy and self-determination had never happened. Governments, whether elected or not, without reference to their own citizens let alone those of other nations, assert their right to draw lines across the global commons and decide who gets what. This is a scramble for the atmosphere comparable in style and intent to the scramble for Africa. At no point has the injustice at the heart of multilateralism been addressed or even acknowledged: the interests of states and the interests of the world’s people are not the same. Often they are diametrically opposed. In this case, most rich and rapidly developing states have sought through these talks to seize as great a chunk of the atmosphere for themselves as they can – to grab bigger rights to pollute than their competitors. The process couldn’t have been better designed to produce the wrong results. I have spent most of my time at the Klimaforum: the alternative conference set up by just four paid staff, which 50,000 people attended without a hitch. (I know which team I would put in charge of saving the planet.) There the barrister Polly Higgins laid out a different approach. Her declaration of planetary rights invests ecosystems with similar legal safeguards to those won by humans after the second world war(2). It changes the legal relationship between humans, the atmosphere and the biosphere from ownership to stewardship. It creates a global framework for negotiation which gives nation states less discretion to dispose of ecosystems and the people who depend on them. Even before this new farce began it was starting to look as if it might be too late to prevent two or more degrees of global warming. The nation states, pursuing their own interests, have each been passing the parcel of responsibility since they decided to take action in 1992. We have now lost 17 precious years; possibly the only years in which climate breakdown could have been prevented. This has not happened by accident: it is the result of a systematic campaign of sabotage by certain states, which has been driven and promoted by the energy industries. This idiocy has been aided and abetted by the nations characterised, until now, as the good guys: those which have made firm commitments, only to invalidate them with loopholes, false accounting and outsourcing. In all cases immediate self-interest has trumped the long-term welfare of humankind. Corporate profits and political expediency have proved to be more urgent concerns than either the natural world or human civilisation. Our political systems are incapable of discharging the main function of government: to protect us from each other. Goodbye Africa, goodbye south Asia; goodbye glaciers and sea ice, coral reefs and rainforest; it was nice knowing you, not that we really cared. The governments which moved so swiftly to save the banks have bickered and filibustered while the biosphere burns. www.monbiot.com References: 1. guardian.co.uk 2. treeshaverightstoo.com