Category Archives: Sovereign Debt

Foreign CenBanks Continue To Sell Treasury Securities

As we suspected in our last post on this subject,  We also have no doubt Japan’s holdings are down from the latest observation in July. – GMM,  Sep 29th Japan, the country (data is aggregated), sold $34.5 billion of its … Continue reading

Posted in Capital Flows, China, Sovereign Debt | Leave a comment

Seriously? Swissie a Safe Haven During a Banking Crisis?

Repost of an oldie but goldie, (as in a decade old), especially relevant given the rumors in today’s market.  Here’s to hoping the policymakers have rectified some of the issues, but in our experience goveventments are reactive to a crisis … Continue reading

Posted in Black Swan Watch, Currency, Sovereign Debt, Sovereign Risk | Tagged , , | Leave a comment

U.S. Treasury Market Borrowing & Global Foreign Savings

We were curious about how much U.S. Treasury market borrowings have increased relative to global foreign savings and whipped together the table below. We define  global foreign savings here as the cumulative current account surpluses of all the world’s surplus nations. The … Continue reading

Posted in Dollar, Sovereign Debt, Uncategorized | Tagged , , , | Leave a comment

Get Shorty, Got Shorty, Still Shorty In 10-Year Notes

Interesting chart from Bloomberg on the growing record short position by specs in 10-year note futures.  Surprisingly,  there has been no meaningful squeeze in the 10-year during 2018, even with the massive equity volatility shock in early February. In fact,  … Continue reading

Posted in Bonds, Sovereign Debt, Uncategorized | Tagged | 6 Comments

German 10-year At 47 bps As Inflation Prints 2.3 Percent

Really efficient markets, no?   The Germans  ECB loves a real 10-year negative carry. This is absurd and tantamount to confiscating the savings of hard working Germans.  Only going to add to the country’s already rising political tensions. As Holger notes, … Continue reading

Posted in Bonds, Germany, Interest Rates, Sovereign Debt, Uncategorized | Tagged , | 5 Comments

When The U.S. Government Defaulted

One of the most pervasive myths about the United States is that the federal government has never defaulted on its debts. There’s just one problem: it’s not true, and while few people remember the “gold clause cases” of the 1930s, … Continue reading

Posted in Bonds, Budget Deficit, Sovereign Debt, Sovereign Risk, Uncategorized | Tagged , , , , , , | 43 Comments

Prepare For Much Higher Long-Term Rates

There has been a huge drain of liquidity from the U.S. Treasury market over the past few years, and may signal a structural change to how the United States finances budget deficits. The government will always find a way to … Continue reading

Posted in Bonds, Charts, China, Credit, Geopolitical, Interest Rates, Sovereign Debt, Uncategorized | Tagged , , , | 36 Comments

Stocks And Bonds Now Joined At The Hip

Market Recovery The U.S. stock market rallied Friday on the six bps decline in the 10-year Treasury yield.  The S&P500 has now recovered 63.09 percent of its peak-to-low loss.  We are looking for 2,805 on the S&P500 for a green … Continue reading

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FOMC: A Big Double Cheese Non-Burger

Monetary policy history made today. The  Federal Open Market Committee (FOMC)  confirmed it would begin its long-awaited quantitative tightening (QT). In October, the Committee will initiate the balance sheet normalization program described in the June 2017 Addendum to the Committee’s … Continue reading

Posted in China, Euro, Eurozone Sovereign Spreads, Fed, German Bund, Monetary Policy, Sovereign Debt | Tagged , | 2 Comments

Is the U.S. Government Bankrupt? Not Even Close.

We often hear the meme “the U.S. is the next Greece.”   “The government is insolvent.”  Complete nonsense. We tend to focus too much on the right side of the government’s balance sheet and not the left side — the … Continue reading

Posted in Fiscal Policy, Sovereign Debt | Tagged , , | 5 Comments