Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"We have some new okra sprouts coming up. Just planted marigold seeds."
@Crash - oh how I envy. Two feet of snow, slush and ice here on top of frozen soil and heading 10 degrees below zero (F) for the next several days. On the plus side I do have plenty of good reds, firewood, and stacks of books available.
@Crash: Marigolds! If what you planted are anything like the calendula* seeds I put out ~ 15 years ago, they reseed like mad and make a good cover you'll never have to replant.
* A marigold native to North America, only distantly related to some of the available ornamental marigolds. Common names can be a bit misleading ...
@Crash: Marigolds! If what you planted are anything like the calendula* seeds I put out ~ 15 years ago, they reseed like mad and make a good cover you'll never have to replant.
* A marigold native to North America, only distantly related to some of the available ornamental marigolds. Common names can be a bit misleading ...
The ones I've got are redmetamorph. I actually like the acrid aroma. And I'm using pots on the deck, we own no land.
For those who think their FDIC-insured bank accounts/CDs would be safe in the event of a Treasury bond default: https://fred.stlouisfed.org/series/USGSEC Things would be OK perhaps in the short-term if it's just a missed Treasury payment--a technical default- but not in the long-term for any extended standoff and collapse. The whole system is built on the "risk-free" rate of Treasuries, lives or dies with it. Banks own $4.4 trillion in government debt. And yes, it is a political issue. The extremists' goal of this standoff is to destroy the social safety net, cut Food Stamps, welfare, unemployment benefits, Medicaid and, in the long-term, Social Security and Medicare. And so the fate of T-Bill and Treasury bond holders, the U.S. dollar, and our entire financial system is wrapped up with this debate.
Meanwhile, the idea that the FDIC because it is financed by banks and not the government can save all the banks that would go bust in an extended default is wrong. The FDIC depends on the Deposit Insurance Fund--https://investopedia.com/terms/d/deposit-insurance-fund.asp--to bail out banks. As of the FDIC's last 2021 annual report issued in April of 2022--https://fdic.gov/about/financial-reports/reports/2021annualreport/2021-arfinal.pdf--the insurance fund had $115 billion set aside to bail out banks. That's good for a few banks, not for an entire financial system in disrepair. Even worse, what is the Deposit Insurance Fund invested in? Treasury bonds! See page 133 of the annual report.
If we miss a T-bill/Treasury payment because of our government being held hostage, the world will survive. But going over the edge into a serious government bankruptcy would be end times for the capital markets. Nor am I trying to be alarmist. In fact, this scenario makes me almost positive the situation won't get any further than brinkmanship and everything for wealthy T-Bill/Treasury-bond holders--and every other investor in the financial food chain--will be fine. And even if the extremists kept pushing, the 14th amendment will be invoked: https://newrepublic.com/article/169857/debt-ceiling-law-terminate-constitution A missed payment and the volatility that will result because of it will be a buying opportunity. Meanwhile, some awful concession will be made regarding the safety net for America's poorest most vulnerable citizens--politics in the extreme.
I'm betting that the extremist group can remain blazingly stupid longer than the rest of the world can remain rational. I hope they prove me wrong but I'm not counting on it.
"Two feet of snow, slush and ice here on top of frozen soil and heading 10 degrees below zero (F) for the next several days. … I do have plenty of good reds, firewood, and stacks of books available.
@Mark - Sounds like a living hell out there. Some music to ease the pain ….
@LewisBraham - Thanks for the above post. Much appreciated. A default on its debt by the largest superpower (and financial center) in the world would have many ramifications - some probably not yet imagined. Like I said elsewhere, the FX (foreign currency exchanges) would be a nightmare on the morning after. (Sorry for the apparent oxymoron)
Totally agree that defaulting would have grave consequences just like back in 2011. Even for a brief moment it would be a mess when Standard and Poor down graded treasuries to AA from AAA.
If things get really bad, social security checks may get delay and Medicare service may get suspended.
@sven Millions of people ( at least half of them lower income GOP voters I suspect) live from SS check to SS check. I think like most Americans currently, they are not paying attention to the debate or potential consequences, and if asked would respond sorta similar to the signs " get your government hands off my Medicare" signs in Tea Party rallies against Obamacare
Missing a T bill payment will have little immediate effect on most people, until their SS check doesn't arrive. They will see horrible headlines about the stock and bond markets but the instigators of this trick will somehow spin it as the other party's fault until the checks don't arrive and people ( even Congress members who have federal health insurance) are told they do not have functional health insurance when they arrive in the ER with chest pain. People will unfortunately die.
Thanks so much for the link to the new republic article. I am slowly digesting it and I wonder why I haven't heard much about this way out of the dilemma.
It does remind me that although we think the quality of contempory thought in previous years was much higher than now ( Federalist Papers, Gettysburg address etc) there was also an awful lot of junk similar to what we seem to be mired in now ( Hamilton and Burr's duel and extreme animosity, the attacks on Jefferson and his "black wife", Lincoln as a baboon etc)
Comments
@Crash - oh how I envy. Two feet of snow, slush and ice here on top of frozen soil and heading 10 degrees below zero (F) for the next several days. On the plus side I do have plenty of good reds, firewood, and stacks of books available.
I hope you don't lose your electricity, @Mark.
* A marigold native to North America, only distantly related to some of the available ornamental marigolds. Common names can be a bit misleading ...
Things would be OK perhaps in the short-term if it's just a missed Treasury payment--a technical default- but not in the long-term for any extended standoff and collapse. The whole system is built on the "risk-free" rate of Treasuries, lives or dies with it. Banks own $4.4 trillion in government debt. And yes, it is a political issue. The extremists' goal of this standoff is to destroy the social safety net, cut Food Stamps, welfare, unemployment benefits, Medicaid and, in the long-term, Social Security and Medicare. And so the fate of T-Bill and Treasury bond holders, the U.S. dollar, and our entire financial system is wrapped up with this debate.
Meanwhile, the idea that the FDIC because it is financed by banks and not the government can save all the banks that would go bust in an extended default is wrong. The FDIC depends on the Deposit Insurance Fund--https://investopedia.com/terms/d/deposit-insurance-fund.asp--to bail out banks. As of the FDIC's last 2021 annual report issued in April of 2022--https://fdic.gov/about/financial-reports/reports/2021annualreport/2021-arfinal.pdf--the insurance fund had $115 billion set aside to bail out banks. That's good for a few banks, not for an entire financial system in disrepair. Even worse, what is the Deposit Insurance Fund invested in? Treasury bonds! See page 133 of the annual report.
If we miss a T-bill/Treasury payment because of our government being held hostage, the world will survive. But going over the edge into a serious government bankruptcy would be end times for the capital markets. Nor am I trying to be alarmist. In fact, this scenario makes me almost positive the situation won't get any further than brinkmanship and everything for wealthy T-Bill/Treasury-bond holders--and every other investor in the financial food chain--will be fine. And even if the extremists kept pushing, the 14th amendment will be invoked: https://newrepublic.com/article/169857/debt-ceiling-law-terminate-constitution A missed payment and the volatility that will result because of it will be a buying opportunity. Meanwhile, some awful concession will be made regarding the safety net for America's poorest most vulnerable citizens--politics in the extreme.
The 'do nothing party' is already hard at work attempting to stick it to the most vulnerable No more sliced cheese, white rice under proposed Iowa SNAP bill
Road to Hell
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@LewisBraham - Thanks for the above post. Much appreciated. A default on its debt by the largest superpower (and financial center) in the world would have many ramifications - some probably not yet imagined. Like I said elsewhere, the FX (foreign currency exchanges) would be a nightmare on the morning after. (Sorry for the apparent oxymoron)
If things get really bad, social security checks may get delay and Medicare service may get suspended.
Millions of people ( at least half of them lower income GOP voters I suspect) live from SS check to SS check. I think like most Americans currently, they are not paying attention to the debate or potential consequences, and if asked would respond sorta similar to the signs " get your government hands off my Medicare" signs in Tea Party rallies against Obamacare
Missing a T bill payment will have little immediate effect on most people, until their SS check doesn't arrive. They will see horrible headlines about the stock and bond markets but the instigators of this trick will somehow spin it as the other party's fault until the checks don't arrive and people ( even Congress members who have federal health insurance) are told they do not have functional health insurance when they arrive in the ER with chest pain. People will unfortunately die.
Thanks so much for the link to the new republic article. I am slowly digesting it and I wonder why I haven't heard much about this way out of the dilemma.
It does remind me that although we think the quality of contempory thought in previous years was much higher than now ( Federalist Papers, Gettysburg address etc) there was also an awful lot of junk similar to what we seem to be mired in now ( Hamilton and Burr's duel and extreme animosity, the attacks on Jefferson and his "black wife", Lincoln as a baboon etc)
https://en.wikipedia.org/wiki/Burr–Hamilton_duel