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 By Prieur du Plessis, on July 21st, 2010 posted in: Economy, Guest Bloggers, Treasuries  Leave your comment
This post is a guest contribution by Rebecca Wilder, author of the of the News N Economics blog. Jim Hamilton used the Federal Reserve Flow of Funds data to pose a question: who will buy “the additional $8 trillion in net new debt that would be issued over the next decade under the CBO’s alternative fiscal scenario?” I thought the analysis was curious and too “partial”. If one believes the deleveraging story, then domestic private saving is going to rise. The answer to his question seems pretty obvious …
Let’s say consumption goes back to the 1960-style 62% of GDP, then get ready for household Treasury accumulation. Spanning the decade of 1960, households held on average 30% of the Treasury’s liabilities. A simple example illustrates my point. If the Treasury’s book doubles to $16.5 trillion, and the household share of Treasury holdings rises to 30% – as of Q1 2010 the stock of Treasuries outstanding was just about $8.3 trillion (see L.209 here) – then households will accumulate over $4 trillion of these new Treasuries. That’s just households, and holding all else equal (like financial funds and businesses). So the answer is: the domestic private sector. Source: Rebecca Wilder, News N Economics, July 19, 2010.
Gary Shilling, president of A. Gary Shilling & Co., talks about Europe’s sovereign debt crisis and the prospects for the euro and U.S. Treasury market. Source: Bloomberg (via YouTube.com), July19, 2010. Considering the technical picture of the euro, Adam Hewison (INO.com) provides a short video analysis, arguing that the euro is on shaky ground. Click here to access the presentation.
More on this topic (What's this?) The Secret System that Blew Another Hole in the Euro (Money Morning, 4/25/12) EUR Avoids New 4-Month Low (Jutia Group, 5/18/12) EUR Stages Broad Recovery (Jutia Group, 4/22/12)  By Prieur du Plessis, on March 6th, 2010 posted in: Bonds, Economy, Investment, Markets, Money, Treasuries Leave your comment
This week on Wealthtrack, Consuelo Mack, sits down with Bruce Berkowitz. He is Morningstar’s Domestic Equity Fund Manager of the Decade and portfolio manager of the five-star Fairholme Fund. Berkowitz explains how he has beaten the S&P by more than 200 percent over the past decade and where he is finding value now. Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives. Source: Wealthtrack, March 5, 2010. More on this topic (What's this?) Economist Gary Shilling: S&P 500 will drop 43% this year? (Value Investing, 4/11/12) Check Yourself (Random Roger's Big Picture, 5/18/12) Is This Bull Market Over? (Investment U, 4/16/12) |
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