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I thought the government was just buying back the higher interest rate bonds
of the past(10%+) and replacing them with the current lower interest rate
bonds- (not shorter duration)- replacing them with shorter duration is
foolish indeed.
Steve
----- Original Message -----
From: Stewart Taylor <staylor@xxxxxxx>
To: <robert.cummings@xxxxxxxxxxxxxxxx>; <the_omega_man@xxxxxxxxxxxx>
Cc: Omega List <omega-list@xxxxxxxxxx>
Sent: Wednesday, May 31, 2000 7:38 AM
Subject: Re: NO MORE BONDS? (was: fyi)
> 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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