Steve Posted October 3, 2008 Report Share Posted October 3, 2008 http://www.msnbc.msn.com/id/26994238/ Economist in academia have a say. Remember the administration saying if we didn't act right now disaster was at hand. Its been a few days. What's happened? Jack Schitt has happened. I'm not sure if Poulson and the administration panicked or they were trying to pull one over on all of us. Either way, their warnings are proving false with each day. The sky isn't falling. Furthermore, with Citibank and JPMorgan Chase buying assets of Washington Mautual and Wachovia, the free market is doing its job. Previous chairman of AIG wants to buy into his former company. The government may have acted precipitiously with the 85 billion dollar cash infusion there. This bailout is seeming less and less needed with each passing day. I think some intervention is needed but not nearly on the scale that is proposed. Finally, the fact that Wall Street (and other industries) still provide the lions share of funding for the campaigns we will ALWAYS have a problem. Link to comment Share on other sites More sharing options...
shygye Posted October 3, 2008 Report Share Posted October 3, 2008 Commercial Paper Look at the Discount Rate Spread for commercial paper. It is over 400 basis points, when historically it is usually less than 50 points. Link to comment Share on other sites More sharing options...
Faustian Posted October 3, 2008 Report Share Posted October 3, 2008 You have no desire to debate honestly. You NEVER support your position. Never say never' date=' SD. You know this. It just makes you look stupid and dishonest.[/quote'] Ok, so what's your take on this RY? Still waiting.......... Link to comment Share on other sites More sharing options...
USVirgin Posted October 3, 2008 Report Share Posted October 3, 2008 I have a question for you (and all) as an economic dimwit. Nobody's talking about this but... What if the US allows the domino effect to continue to destroy foreign banks to the point where foreign governments decide to call in their investments in the US in terms of our government bonds (our national debt)? Could it happen? Would it make us irrelevant, foreign policy wise? Is it a threat to national security? Would it bankrupt us (I'm sure we could freeze our assets, but that would ruin our credit and relevance at the same time)? Is there an urgency that the politicians are acting upon that they are not telling the public about? Or is this another myth? There is a pretty smart international group here. Enlighten me. Link to comment Share on other sites More sharing options...
rogueyam Posted October 3, 2008 Report Share Posted October 3, 2008 What if the US allows the domino effect to continue to destroy foreign banks to the point where foreign governments decide to call in their investments in the US in terms of our government bonds (our national debt)? Could it happen? ...Or is this another myth? It is a myth. A bond is a contract that specifies payments which are to be made on a certain schedule. The bondholder does not have the option of unilaterally accelerating that schedule. The payments will be made when the bond says they will and no sooner under any circumstances. Otherwise, what is the point of issuing bonds? Link to comment Share on other sites More sharing options...
Faustian Posted October 3, 2008 Report Share Posted October 3, 2008 It's not that simple....there are many different stipulations. Governments can change things...... Another persons solution... http://www.courant.com/news/opinion/op_ed/hc-stodderoped1002,0,6346929.column Still waiting for yours RY................. Link to comment Share on other sites More sharing options...
shygye Posted October 3, 2008 Report Share Posted October 3, 2008 What if the US allows the domino effect to continue to destroy foreign banks to the point where foreign governments decide to call in their investments in the US in terms of our government bonds (our national debt)? Could it happen? ...Or is this another myth? It is a myth. A bond is a contract that specifies payments which are to be made on a certain schedule. The bondholder does not have the option of unilaterally accelerating that schedule. The payments will be made when the bond says they will and no sooner under any circumstances. Otherwise' date=' what is the point of issuing bonds?[/quote'] That is a too simplistic answer. There is a bond market, where bonds are bought and sold. It is common for people and institutions sell bonds before their maturity to cash out. Link to comment Share on other sites More sharing options...
rogueyam Posted October 3, 2008 Report Share Posted October 3, 2008 That is a too simplistic answer. There is a bond market, where bonds are bought and sold. It is common for people and institutions sell bonds before their maturity to cash out. What you have posted is stupid. The subject is whether bondholders can "call in their investments" in such a way as to "bankrupt us" (i.e. bankrupt the United States Treasury). Bondholders cannot do this as I explained in my post. If person X sells his U.S. Treasury Bond to person Y then this imparts no additional direct financial obligation on the U.S. Treasury. The same bond payments that were previously obliged to X are now obliged to Y. That is all. I was right. You are wrong. You should stick to trivial matters. You suck at ideas and stuff. Link to comment Share on other sites More sharing options...
shygye Posted October 3, 2008 Report Share Posted October 3, 2008 RY, you have just proved that capitalistic market operations is beyond your feeble comprehension capabilities. The value of the bond is set in the bond market trading. If countries decide to dump Treasury bonds the value of the bonds would plummet. Link to comment Share on other sites More sharing options...
Bangkoktraveler Posted October 3, 2008 Report Share Posted October 3, 2008 That is a too simplistic answer. There is a bond market' date=' where bonds are bought and sold. It is common for people and institutions sell bonds before their maturity to cash out.[/quote'] What you have posted is stupid. The subject is whether bondholders can "call in their investments" in such a way as to "bankrupt us" (i.e. bankrupt the United States Treasury). Bondholders cannot do this as I explained in my post. If person X sells his U.S. Treasury Bond to person Y then this imparts no additional direct financial obligation on the U.S. Treasury. The same bond payments that were previously obliged to X are now obliged to Y. That is all. I was right. You are wrong. You should stick to trivial matters. You suck at ideas and stuff. The government's own words on Treasury bonds is: [color:red]"You can hold Treasury bills, notes, bonds, or TIPS until they mature, or sell them before they mature. " [/color] SOURCE For I bonds: Early redemption penalties: Before 5 years, forfeit 3 most recent months' interest After 5 years, no penalty For EE bonds: Early redemption penalties: Before 5 years, forfeit 3 most recent months' interest After 5 years, no penalty Link to comment Share on other sites More sharing options...
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