4 ms·
These kinds of articles often seem to include a line like the one in this one: "And bond traders will kick us miles down our road once they wake up and realize
by glhaynes 16y ago
These kinds of articles often seem to include a line like the one in this one: "And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece."
What is it that makes people think people in US bonds are "asleep"? I certainly don't know whether they are or not, but it seems to go against the almost dogmatic claims you see elsewhere that the market "knows" and already has rational future expectations priced in.
- gamble 16y agoThe Starbucks Principle: Just because something seems stupid and wrong, like opening four Starbucks outlets on the same intersection, that doesn't mean the market will punish it. Some people are deeply offended by the fact that America's unique position in the world economy allows it to run an incredible deficit without being punished by the market. The bond vigilantes are just a bogeyman invoked to preserve the illusion of a just world. The reality is that heavily-indebted examples like Japan suggest that the US can probably be mismanaged for decades before real consequences kick in.