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No more bonds... This is one of the biggest farces.... supposedly due to
the amount of surplus (treasury inflows are actually quite a bit different
from having a true budget surplus) we can begin buying back long dated debt
(they have been doing so for several months now) and reducing (and maybe
eliminating) the thirty year from the auction cycle. Sounds great.....
unfortunately, the truth is that national debt is still rising (just look
at the back of Barron's each week) and odds of the economy continuing to
preform at this level (the level upon which many of the assumptions going
forward are based) forever and ever amen, are pretty slim.
The sorry SOB's simply hide the new debt in the Social Security trust fund
and issue more short term debt (that will eventually have to be rolled at
higher rates as the business cycle matures). Anyway, it's just political
smoke and mirrors to make the administration look good... as usual, the
odds are that it will eventually come with a heavy cost to the American
public.
It is typical of the government that they start reducing long term debt
with long term rates at generational lows. With yields in the 6% range they
should be locking in long term financing. Instead what will happen, is that
they will wait for yields to get back into double digits and then be forced
to issue new thirty year treasuries at a much higher rate. AND THEN: When
yields fall back into the 6% range again... start buying back. Thank you
government.
Carolyn Baum (if you have access to a Bloomberg) wrote a great article
Friday on just this subject.
At 09:27 PM 5/30/00 -0500, robert.cummings@xxxxxxxxxxxxxxxx wrote:
>Yes the government is buying back the 30 bond and no plans to issue
>anymore. The new bench mark is the 10 year note. Also there is talk of the
>current bond pit flipping with 10 year note for the extra needed space.
>
>Robert
>
>
>
>At 09:16 PM 5/30/00 -0500, the_omega_man@xxxxxxxxxxxx wrote:
>
>>I read in the Kiplinger Letter today that the government may discontinue
>>30-year bonds completely... Seems the need to issue them is expected to
>>dissipate as government debt is reduced. Any bond traders hearing news
>>along these lines?
>>
>>
>>OM
>>
>>
>>
>>At Tue, 30 May 2000 12:49:09 -0700, "Jim & Bullseye"
>><cayenne@xxxxxxxxxxxxxxxx>
>>wrote:
>>
>> >
>> > The 30 year US Bond futures contract
>> >rolled over to September from June as of
>> >today. The month code for Sept. is the letter
>> >U.
>> >
>
>
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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