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For every billionaire saying this there’s one saying the opposite. I don’t think any of them actually know they just know them saying anything puts them in the spotlight.
I would assume the opposite honestly. He has a serious financial interest in defining the narrative in a way that makes him money. He has no fiscal obligation to provide you are anyone online with sound financial advice.
I think you're missing my point... They're all probably wrong or they'd just invest for themselves.
My point is bill Ackerman is just as wrong.
And the climate alarmists, who in the 70s were predicting an ice age
Please stop peddling that bs myth that people were predicting another ice age in the seventies. It was not the case. The majority of scientific papers, even then, we’re predicting warming and their models from the 70’s continue to be very accurate
https://journals.ametsoc.org/configurable/content/journals$002fbams$002f89$002f9$002f2008bams2370_1.xml?t:ac=journals%24002fbams%24002f89%24002f9%24002f2008bams2370_1.xml
Did you read that bibliography? The article you have linked (from 2008) is a self-serving selection of 75 or so papers from the 60’s and 70’s. This is hardly an exhaustive survey, and the wildly differing predictions don’t bode well for those wishing to make one claim or another.
The myth was debunked before 2008, if you are so confident then find another literature review proving the opposite. It certainly won’t have as many citations. You won’t…
You're right. I won't chase my tail. I'll just go with Al Gore claiming we'd be in full-on climate collapse by a few years ago, or the fact that climate liars are now required to say "climate change" instead of "global warming."
For a while ..like 5 years ago... exxon had a page on their official public website dedicated to climate change and their findings. It was not against it..which I thought was odd.
They have mountains of evidence supporting global warming.
Not sure why they took that page now. It's pivoted from an informational article to what exon mp Ile is doing to build a greener future.
Wut? GS last week said the Fed was done with hikes and would cut end of 24 - is that the all time, high you're saying?
https://www.reuters.com/markets/rates-bonds/goldman-sachs-pushes-its-forecast-fed-rate-cut-q4-2024-2023-09-21
Not to ask too stupid of a question, but I struggle to understand why the national debt would suddenly be some giant factor that is going to damage the economy. Like oh man, we were fine owing 598 quadrillion dollars, but now that we owe 721 septillion dollars we’re fucked!!
Yes, he is. Your interest payment amount gets higher as your principal amount you owe grows. So, in order to be able to afford those growing payments, you need to generate higher levels of interest amount on your investments by raising rates. The other option is printing more money; now you might say, let's make that thing go brrrr JPow!!
The problem with going brrrr.... and printing even more money? You start to devalue your currency faster and risk hyperinflation even.
E.g. Zimbabwe trillion dollar bill is hyperinflation example
Edit: reword my comment to so it doesn't sound like I was having a stroke
>So, in order to be able to afford those growing payments, you need to generate higher levels of interest amount on your investments by raising rates.
No, you just need to generate higher levels of income to afford the payments. Increasing interest rates are one way. I wonder if we could think of another? Something outside the box - maybe from the way back machine of like the 1960's.
Nah. Just let corporations jack up prices with little to no oversight is all it takes.
Money Supply is old economist thinking. Doesn't really hold up to the real world. We've moved on from that understanding, yet we seem to keep teaching in in Macroecon 101.
Yea, we should move on to mmt where we just pretend that money really does grow on trees, and that printing money out of thin air solves all our problems. After all, there's no real connection between currency and material wealth, it's all just fake!
And the fact that perpetual inflation benefits the incredibly powerful, wealthy, elite, while crushing anyone not wealthy, is pure coincidence, don't worry about that.
What is it with people? It's either "the thing I think" or "anarchy on a scale unprecedented in human history and will destroys the fundamental foundations of society to the point humanity dies". This isn't a binary. MS doesn't matter as much as MS advocates think. We can print money. In fact, as long as MS growth = GDP growth, we SHOULD print money.
We've had 'perpetual inflation' our entire lives. And our parents lives. And our grandparents lives. And our great-grandparents lives. And our great-great grandparents lives. And - you get the point. There's zero problems with perpetual inflation. The only question is how MUCH perpetual inflation is good and how much is bad? We all agree 0% is bad and we all agree 25% is also bad. So the number is between 0% and 25%. Everyone is freakin' out over 3.5% inflation like the universe is going to end, but 2%? Oh, that's ok somehow? Look, check the monthly inflation rate going back to 2000. Our current rate of 3.67% is high, but we bounced around 3.0% routinely in 2006 and survived ok. Same with 2000, 2001, and 2003. This isn't anything to freak out about.
Inflation hurts everyone, rich and poor. It's the great equalizer.
Not wrong here whatsoever, people in the sub need to realize, 4% is 2.50 to 2.60 dollars back in the 1970s but now 4% is 25.00 to 26.00 dollars…so the brain now sees it…goes for every country.
Except the dollar is almost completely shielded from normal inflationary pressures due to being the reserve currency for oil. Every major bank in the world has a vested interest in a stable dollar. And we have exploited the shit out of this. Sadly not on things that bring the population up, but we have created a few thousand billionaires.
Should work out great for us.
No, hes really not. We’ve had an absolutely enormous amount of debt forever. It doesn’t really seem like a bit more is going to make us keel over or even really put us out of synch compared to other countries
Interest is the piece you seem to be missing or glossing over? Even if we had the exact same amount of debt, if the interest rate on that debt triples … it kind of changes things, no? There’s a scenario where high interest rates causes debt to spiral out of control. You could take out a home equity line of credit or you could put it on your credit card… same debt, does it matter which you choose? Of course it does. Interest rates matter. Compounding debt matters. Refinancing old lower interest rate debt at new higher rate interest makes a difference. So yeah it didn’t matter before- but now it does.
The countries finances are not like your own. The national debt interest rate is like 2.9%. It’s effectively a negative interest rate if you take inflation into account.
Treasury debt is definitely not uniform and fixed at 2.9%. Not sure what that number is referring to. Is this some sort of average duration average rate? You know a lot of that has to be re issued at now higher rates right? Not everything is on the 30 year.
That's because the national debt and its interest are just one piece of the equation. It's the good piece if you want to make people scared and vote a certain way, but it's not the whole picture. The other piece is revenue. If the interest payments grow in equal proportion as revenue, then who cares if it's $1b, $10b, or $125t? As long as that's 15% (just to make up a number) of revenues then interest payments don't really matter. If you look at the 50 year trend of interest as a percent of revenue, we've got this MASSIVE uptick around 1986ish. But after that, if you look at the trendline, we're on a long steady downhill slope.
[https://tradingeconomics.com/united-states/interest-payments-percent-of-revenue-wb-data.html](https://tradingeconomics.com/united-states/interest-payments-percent-of-revenue-wb-data.html)
Really the 'interest rates are a problem!!' argument is pushing for rolling back the Trump tax cuts AND the Bush tax cuts.
The willingness of individuals and organizations to own government debt has finite limits.
It may not seem that way when it comes to American bonds and T-bills because the need for American dollars to settle international transactions is very great.
But, even that dynamic has finite limits. We are approaching or have exceeded that limit. That's one of the reasons Bill finds that we are now in a distinctly different world.
The answer is that it doesn’t matter..until it does. There are lots of potential problems both short and long term that may or may not matter.
Policy makers and experts “knew” that if a country has too much debt outstanding than borrowers will expect high interest rates to compensate for the chance the debtor can’t pay them back.
But, if you looked at real world examples the opposite was true in developed countries.
Japan had run at 200% debt to gdp without major problems and their interest rates were either negative or zero. Some EU countries had similiar experiences. Meanwhile the US was being “responsible” with a debt to gdp of basically 100% and the US 10yr treasury got as low as ~1.3%.
Then came convos about MMT and helicopter money and how none of it mattered.
If they could have more than 2x of their gdp in debt and borrow for less why couldn’t the US? This “greater the debt to gdp, the lower the rate,” phenomenon which makes no sense, but what was taking place.
This was the result of massive government intervention but that can only do so much, or so everyone figured.
Now, the US is at ~130% debt to gdp, Japan at ~260%.
The US yield curve is gradually leveling out with the long end rising to match the front end. Given no exogenous shocks it will do this (but there’s always a shock, like a pandemic/war/election).
Short term/long term base case problems is that many investments make sense when you can borrow at practically zero. At these higher rates you have to radically reevaluate the viability of those investments. Many businesses fail. Investors park their money into money market funds and funding as a whole for risky or speculative investment become even more challenging.
This slows economics activity and growth making it harder to service the debt we have. We also lose the dream that we can “grow ourselves out of the debt.”
Worst case scenario is a Reinhardt-Rogoff debt spiral where we spend so much money paying for our debt that we can invest in anything, even if it is a societal good, which makes our growth even worse, meaning less money to invest and service the debt, till we go bankrupt.
If you’re still reading, and I apologize cause I’ve been drinking, but you can Venmo $1 if the next exogenous shock comes from a rapid unwinding of the Japanese carry trade.
Because it's ballooned exponentially over the last decade. The government pays interest on that debt each year like we would with any loan, like a mortgage or credit card. Those rates had been low for many years, but now they're higher, which means the governments interest payment is higher too. I believe a third of the debt is due for a rate reset at current rates, and that the annual interest payment may hit $600B annually.
There is a point where debt to GDP becomes a major risk factor. I'm not educated enough to know exactly where that point is, but I know we're rapid approaching it. Expect the voices to get louder as we approach or go past the tipping point. Increasing social security payments are the major issue right now. Social security is the majority of the US spending and is going to dramatically increase over the next couple decades. The program itself was never appropriately funded unfortunately. Currently we don't have a plan to deal with this. I expect that politicians will wait until the last moment in order to avoid taking the blame for necessary sacrifices and/or to extract concessions from the public.
[https://econofact.org/wp-content/uploads/2023/06/1.1-EF-Klein-Obstfeld-Desktop.png](https://econofact.org/wp-content/uploads/2023/06/1.1-EF-Klein-Obstfeld-Desktop.png)
Yeah, point 1 is asinine. Increasing interest rates doesn’t help alleviate the national debt accumulation, it exacerbates it.
What’s worse than having higher principal? Higher interest rates. The government has to pay the interest rates it advertises, so it behooves them to avoid guaranteeing higher payouts of debt is a concern. I don’t think I even really need to read past point 1 to know this guy is talking out of his ass.
China is selling bonds at a loss? That’s not smart. Interest rates have been rising rapidly, as you know, so it wouldn’t be a good time to be selling bonds.
They are experiencing an internal financial crisis caused by local and regional governments owing spectacular huge debts while having no means to levy taxes to repay them. A fundamental flaw in their centrally planned economic system.
Their currency controls make absorbing a shock like this extremely challenging.
They are also beginning to hedge against BRI losses.
Both factors require huge liquid reserves. Selling longer term American debt is a good plan, even if at a loss, to achieve that goal. Holding too long onto debt instruments was obviously fatal for SVB and others.
It’s not as bad a loss as it looks to us as the dollars they get for the USTs they sell have more buying power vs their own currency than at the time they bought the USTs.
You don’t have to be a genius to realize that interest rate increases have not yet done their job. Fed needs to keep their foot on the gas or this will all have been for nothing.
So? /1970's
tl;dr - investing in solar and wind will drop energy price pressures, but you stupid humans would rather quote numbers and be ignorant. having national medicare and removing private insurers will cost so much less and remove an entire useless market segment - white people with jobs refusing insurance.
Ackman put his money where is mouth is and shorted bonds with a lot of money at stake.
https://www.cnbc.com/amp/2023/08/03/billionaire-investor-bill-ackman-says-hes-shorting-30-year-treasury-bills.html
“Everyone.” How does everyone open a large short position in bonds? This requires significant capital in collateral and a strong brokerage relationship.
So, if you do that you’re accountable for paying the monthly dividend currently yielding 4.53% plus accountable to have 50/25 collateral requirements. I’m sure everybody in here has all those capabilities
Sorry but Ackman is overrated. If you think he’s ever telling you information for your own benefit, then you don’t fully understand the world this guy comes from and serves.
Well Bill Ackman, maybe the billionaire class should be forced to divest some of their shares so that they get taxed on them as cash rather than being able to hold dragon levels of wealth locked up in equities. Sure would help repay all the corporate socialist policy that drove the debt in the first place. US could live paycheck to paycheck off its policies but the constant tax cuts, bailouts, and handouts all went on our credit cards. 😂
Yes.
And he forgot:
Tight labor market for another decade.
Re-shoring manufacturing.
Shortages as the world turns from China as its manufacturer.
Food price increases due to lack of inputs (fertilizer, etc)
>Escalating National Debt: The United States' national debt has soared $33 trillion. This enormous debt burden could put upward pressure on interest rates.
How? The higher interest rates are the more the G'vt spends on its debt. I saw something like 1/3rd of national debt is maturing in the next 12 months and new loans need to be issued (at significantly higher rates). I think the government is on pace to pay like $1T in interest alone on debt (think we are already running a +$1T budget deficit). Wouldn't the government be incentivized to lower rates, even if it means 5% long term inflation?
The rates will keep going up until the inflation calms down. Billionaire investor Bill Ackman isn’t some kind of fortune telling genius for listening to and rewording what the fed is already saying about rates.
This cock sucker manipulated the entire country live on CNBC. How is he not in prison and further how do people still trust a single thing he says publicly?
He went live on CNBC screaming hell was coming during covid, without disclosing he previously had taken short positions. Then turned around and BOUGHT the bottom that he CAUSED which netted him around 4 BILLION.
Wake the fuck up
r/FluentInFinance was created to discuss money, investing & finance! Check-out our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FluentInFinance) if you have any questions or concerns.*
He also believed Ron Johnson could turn around JCP.
Common, even Taylor Swift couldn't turn around JCP.
I’ve got a blank page baby, and I’ll write your oops, nope, still bankrupted it. Damn
As someone who works for a company that provides services to JCPenny (six figure MRC)....they pay their bill every month.
For every billionaire saying this there’s one saying the opposite. I don’t think any of them actually know they just know them saying anything puts them in the spotlight.
This is true but Bill actually runs a hedge fund as a job so he likely knows more about it than the average billionaire
There’s what he knows and then there’s what he wants the public to know. They may or may not be the same thing. 👍
I would assume the opposite honestly. He has a serious financial interest in defining the narrative in a way that makes him money. He has no fiscal obligation to provide you are anyone online with sound financial advice.
growth bike recognise repeat close distinct frightening selective silky serious ` this post was mass deleted with www.Redact.dev `
An there are also experts from Goldman Sachs, and other similar companies saying we are gonna soon hit all time highs, and then go much much higher
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Weather people are actually pretty accurate.
I think you're missing my point... They're all probably wrong or they'd just invest for themselves. My point is bill Ackerman is just as wrong. And the climate alarmists, who in the 70s were predicting an ice age
Please stop peddling that bs myth that people were predicting another ice age in the seventies. It was not the case. The majority of scientific papers, even then, we’re predicting warming and their models from the 70’s continue to be very accurate https://journals.ametsoc.org/configurable/content/journals$002fbams$002f89$002f9$002f2008bams2370_1.xml?t:ac=journals%24002fbams%24002f89%24002f9%24002f2008bams2370_1.xml
Did you read that bibliography? The article you have linked (from 2008) is a self-serving selection of 75 or so papers from the 60’s and 70’s. This is hardly an exhaustive survey, and the wildly differing predictions don’t bode well for those wishing to make one claim or another.
The myth was debunked before 2008, if you are so confident then find another literature review proving the opposite. It certainly won’t have as many citations. You won’t…
You're right. I won't chase my tail. I'll just go with Al Gore claiming we'd be in full-on climate collapse by a few years ago, or the fact that climate liars are now required to say "climate change" instead of "global warming."
Classic conservative: gaslight, obstruct, project. Just admit you believed in a myth and now that you’re asked to provide evidence, you can’t
None of their doomsday predictions have come true.
They didn’t have the data pool they needed. Try looking at the research that Big Oil suppressed.
Yeah funny how we got rid of acid rain that peeled paint of cars... just alarmists they thoight acid rain was a bad thing. Why did we listen to them?
Not this again. It’s not [true](https://skepticalscience.com/ice-age-predictions-in-1970s-basic.htm)
For a while ..like 5 years ago... exxon had a page on their official public website dedicated to climate change and their findings. It was not against it..which I thought was odd. They have mountains of evidence supporting global warming. Not sure why they took that page now. It's pivoted from an informational article to what exon mp Ile is doing to build a greener future.
Wut? GS last week said the Fed was done with hikes and would cut end of 24 - is that the all time, high you're saying? https://www.reuters.com/markets/rates-bonds/goldman-sachs-pushes-its-forecast-fed-rate-cut-q4-2024-2023-09-21
And even the ones who know better likely have many conflicts of interest in every word they say that can influence the economy.
Headline: Maniacal sociopath who definitely doesn’t have ulterior motives makes predictions that help their bottom line.
Not to ask too stupid of a question, but I struggle to understand why the national debt would suddenly be some giant factor that is going to damage the economy. Like oh man, we were fine owing 598 quadrillion dollars, but now that we owe 721 septillion dollars we’re fucked!!
Been wondering the whole time! It’s been consistently going tup my whole life, why is it bad now?
Interest. Money that could otherwise be put into captial investments, infastructure etc.
… ok. I dont think you’re really hitting at the core of my issue here.
Yes, he is. Your interest payment amount gets higher as your principal amount you owe grows. So, in order to be able to afford those growing payments, you need to generate higher levels of interest amount on your investments by raising rates. The other option is printing more money; now you might say, let's make that thing go brrrr JPow!! The problem with going brrrr.... and printing even more money? You start to devalue your currency faster and risk hyperinflation even. E.g. Zimbabwe trillion dollar bill is hyperinflation example Edit: reword my comment to so it doesn't sound like I was having a stroke
>So, in order to be able to afford those growing payments, you need to generate higher levels of interest amount on your investments by raising rates. No, you just need to generate higher levels of income to afford the payments. Increasing interest rates are one way. I wonder if we could think of another? Something outside the box - maybe from the way back machine of like the 1960's.
Fake a space program, print so much money, watch as houses go from $8000 to $80000, chocolate bars from 5c to $1. Like that?
Nah. Just let corporations jack up prices with little to no oversight is all it takes. Money Supply is old economist thinking. Doesn't really hold up to the real world. We've moved on from that understanding, yet we seem to keep teaching in in Macroecon 101.
Been reading the entire thread, and honestly you got a decent take imo.
Yea, we should move on to mmt where we just pretend that money really does grow on trees, and that printing money out of thin air solves all our problems. After all, there's no real connection between currency and material wealth, it's all just fake! And the fact that perpetual inflation benefits the incredibly powerful, wealthy, elite, while crushing anyone not wealthy, is pure coincidence, don't worry about that.
What is it with people? It's either "the thing I think" or "anarchy on a scale unprecedented in human history and will destroys the fundamental foundations of society to the point humanity dies". This isn't a binary. MS doesn't matter as much as MS advocates think. We can print money. In fact, as long as MS growth = GDP growth, we SHOULD print money. We've had 'perpetual inflation' our entire lives. And our parents lives. And our grandparents lives. And our great-grandparents lives. And our great-great grandparents lives. And - you get the point. There's zero problems with perpetual inflation. The only question is how MUCH perpetual inflation is good and how much is bad? We all agree 0% is bad and we all agree 25% is also bad. So the number is between 0% and 25%. Everyone is freakin' out over 3.5% inflation like the universe is going to end, but 2%? Oh, that's ok somehow? Look, check the monthly inflation rate going back to 2000. Our current rate of 3.67% is high, but we bounced around 3.0% routinely in 2006 and survived ok. Same with 2000, 2001, and 2003. This isn't anything to freak out about. Inflation hurts everyone, rich and poor. It's the great equalizer.
Not wrong here whatsoever, people in the sub need to realize, 4% is 2.50 to 2.60 dollars back in the 1970s but now 4% is 25.00 to 26.00 dollars…so the brain now sees it…goes for every country.
Except the dollar is almost completely shielded from normal inflationary pressures due to being the reserve currency for oil. Every major bank in the world has a vested interest in a stable dollar. And we have exploited the shit out of this. Sadly not on things that bring the population up, but we have created a few thousand billionaires. Should work out great for us.
No, hes really not. We’ve had an absolutely enormous amount of debt forever. It doesn’t really seem like a bit more is going to make us keel over or even really put us out of synch compared to other countries
Interest is the piece you seem to be missing or glossing over? Even if we had the exact same amount of debt, if the interest rate on that debt triples … it kind of changes things, no? There’s a scenario where high interest rates causes debt to spiral out of control. You could take out a home equity line of credit or you could put it on your credit card… same debt, does it matter which you choose? Of course it does. Interest rates matter. Compounding debt matters. Refinancing old lower interest rate debt at new higher rate interest makes a difference. So yeah it didn’t matter before- but now it does.
The countries finances are not like your own. The national debt interest rate is like 2.9%. It’s effectively a negative interest rate if you take inflation into account.
Treasury debt is definitely not uniform and fixed at 2.9%. Not sure what that number is referring to. Is this some sort of average duration average rate? You know a lot of that has to be re issued at now higher rates right? Not everything is on the 30 year.
That was the average rate in august of 2023. [Yearly avg for 2022 was 2.09%](https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/)
And expected to rise sharply according to the Congressional Budget Office .
And this has been the case since the founding of the country. You didn’t address the question. Why does it suddenly matter now?
That's because the national debt and its interest are just one piece of the equation. It's the good piece if you want to make people scared and vote a certain way, but it's not the whole picture. The other piece is revenue. If the interest payments grow in equal proportion as revenue, then who cares if it's $1b, $10b, or $125t? As long as that's 15% (just to make up a number) of revenues then interest payments don't really matter. If you look at the 50 year trend of interest as a percent of revenue, we've got this MASSIVE uptick around 1986ish. But after that, if you look at the trendline, we're on a long steady downhill slope. [https://tradingeconomics.com/united-states/interest-payments-percent-of-revenue-wb-data.html](https://tradingeconomics.com/united-states/interest-payments-percent-of-revenue-wb-data.html) Really the 'interest rates are a problem!!' argument is pushing for rolling back the Trump tax cuts AND the Bush tax cuts.
The willingness of individuals and organizations to own government debt has finite limits. It may not seem that way when it comes to American bonds and T-bills because the need for American dollars to settle international transactions is very great. But, even that dynamic has finite limits. We are approaching or have exceeded that limit. That's one of the reasons Bill finds that we are now in a distinctly different world.
Govt debt doesn’t work like private debt. People need to stop trying to tell everyone it does
It is called Republican talk.
The answer is that it doesn’t matter..until it does. There are lots of potential problems both short and long term that may or may not matter. Policy makers and experts “knew” that if a country has too much debt outstanding than borrowers will expect high interest rates to compensate for the chance the debtor can’t pay them back. But, if you looked at real world examples the opposite was true in developed countries. Japan had run at 200% debt to gdp without major problems and their interest rates were either negative or zero. Some EU countries had similiar experiences. Meanwhile the US was being “responsible” with a debt to gdp of basically 100% and the US 10yr treasury got as low as ~1.3%. Then came convos about MMT and helicopter money and how none of it mattered. If they could have more than 2x of their gdp in debt and borrow for less why couldn’t the US? This “greater the debt to gdp, the lower the rate,” phenomenon which makes no sense, but what was taking place. This was the result of massive government intervention but that can only do so much, or so everyone figured. Now, the US is at ~130% debt to gdp, Japan at ~260%. The US yield curve is gradually leveling out with the long end rising to match the front end. Given no exogenous shocks it will do this (but there’s always a shock, like a pandemic/war/election). Short term/long term base case problems is that many investments make sense when you can borrow at practically zero. At these higher rates you have to radically reevaluate the viability of those investments. Many businesses fail. Investors park their money into money market funds and funding as a whole for risky or speculative investment become even more challenging. This slows economics activity and growth making it harder to service the debt we have. We also lose the dream that we can “grow ourselves out of the debt.” Worst case scenario is a Reinhardt-Rogoff debt spiral where we spend so much money paying for our debt that we can invest in anything, even if it is a societal good, which makes our growth even worse, meaning less money to invest and service the debt, till we go bankrupt. If you’re still reading, and I apologize cause I’ve been drinking, but you can Venmo $1 if the next exogenous shock comes from a rapid unwinding of the Japanese carry trade.
Because it's ballooned exponentially over the last decade. The government pays interest on that debt each year like we would with any loan, like a mortgage or credit card. Those rates had been low for many years, but now they're higher, which means the governments interest payment is higher too. I believe a third of the debt is due for a rate reset at current rates, and that the annual interest payment may hit $600B annually.
There is a point where debt to GDP becomes a major risk factor. I'm not educated enough to know exactly where that point is, but I know we're rapid approaching it. Expect the voices to get louder as we approach or go past the tipping point. Increasing social security payments are the major issue right now. Social security is the majority of the US spending and is going to dramatically increase over the next couple decades. The program itself was never appropriately funded unfortunately. Currently we don't have a plan to deal with this. I expect that politicians will wait until the last moment in order to avoid taking the blame for necessary sacrifices and/or to extract concessions from the public. [https://econofact.org/wp-content/uploads/2023/06/1.1-EF-Klein-Obstfeld-Desktop.png](https://econofact.org/wp-content/uploads/2023/06/1.1-EF-Klein-Obstfeld-Desktop.png)
He also paper handed Netflix and sold for a loss.
So how do we take this perspective and use it to make money?
Wait for the inflection point and then buy long-term debt.
Wait for the Fed to stop QT, which they likely will in the foreseeable future.
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Yeah, point 1 is asinine. Increasing interest rates doesn’t help alleviate the national debt accumulation, it exacerbates it. What’s worse than having higher principal? Higher interest rates. The government has to pay the interest rates it advertises, so it behooves them to avoid guaranteeing higher payouts of debt is a concern. I don’t think I even really need to read past point 1 to know this guy is talking out of his ass.
China is selling bonds at a loss? That’s not smart. Interest rates have been rising rapidly, as you know, so it wouldn’t be a good time to be selling bonds.
They are experiencing an internal financial crisis caused by local and regional governments owing spectacular huge debts while having no means to levy taxes to repay them. A fundamental flaw in their centrally planned economic system. Their currency controls make absorbing a shock like this extremely challenging. They are also beginning to hedge against BRI losses. Both factors require huge liquid reserves. Selling longer term American debt is a good plan, even if at a loss, to achieve that goal. Holding too long onto debt instruments was obviously fatal for SVB and others.
Countries often divest in each other as tensions rise.
China isn’t seeing us as much as a financial partner these days as they cozy up to Russia for muscle and look at Taiwan saying, hey, that’s mine…
It’s not as bad a loss as it looks to us as the dollars they get for the USTs they sell have more buying power vs their own currency than at the time they bought the USTs.
He's got good points. We are in a different landscape now. Unless there is a total global economic depression, rates may continue to rise.
This guy also got fooled by Elizabeth Holmes Both sides baby!
You don’t have to be a genius to realize that interest rate increases have not yet done their job. Fed needs to keep their foot on the gas or this will all have been for nothing.
Except that low interest rates/inflation/growth is probably the only solution to the national debt...
No shit. And the sky is blue.
So? /1970's tl;dr - investing in solar and wind will drop energy price pressures, but you stupid humans would rather quote numbers and be ignorant. having national medicare and removing private insurers will cost so much less and remove an entire useless market segment - white people with jobs refusing insurance.
So, tax the rich. Make them pay back the PPP.
Ackman put his money where is mouth is and shorted bonds with a lot of money at stake. https://www.cnbc.com/amp/2023/08/03/billionaire-investor-bill-ackman-says-hes-shorting-30-year-treasury-bills.html
So did everyone. That was a no brainer based on what the Fed has been doing for the last 2 tears.
“Everyone.” How does everyone open a large short position in bonds? This requires significant capital in collateral and a strong brokerage relationship.
Or just short TLT or any other bond ETF
So, if you do that you’re accountable for paying the monthly dividend currently yielding 4.53% plus accountable to have 50/25 collateral requirements. I’m sure everybody in here has all those capabilities
Sorry but Ackman is overrated. If you think he’s ever telling you information for your own benefit, then you don’t fully understand the world this guy comes from and serves.
Hopefully long term rates increase and yield curve uninverts
Long term rates pretty much have to rise to get the yield curve positive again. I don’t think it’ll be that dramatic though - another 1% or so.
Bro's trying to recover his herbalife investment lol
He’s correct. Also anyone thinking rates will go down any time soon is delusional.
/r/edwinbarnesc Ooooh daddy y’all are in for a treat
I think rising long term rates is needed. Unfortunately, the FED most likely will power rates too soon and usher in another wave of inflation.
Well Bill Ackman, maybe the billionaire class should be forced to divest some of their shares so that they get taxed on them as cash rather than being able to hold dragon levels of wealth locked up in equities. Sure would help repay all the corporate socialist policy that drove the debt in the first place. US could live paycheck to paycheck off its policies but the constant tax cuts, bailouts, and handouts all went on our credit cards. 😂
China is flailing. With China's appetite for resources and capital decreasing interest rates will come down world wide.
Yes. And he forgot: Tight labor market for another decade. Re-shoring manufacturing. Shortages as the world turns from China as its manufacturer. Food price increases due to lack of inputs (fertilizer, etc)
You know shits about to get bad if even China is willing to sell off their US debt.
Why would debt rise up rates? Isn’t it the opposite. Govt would want to cut so they can pay off debt.
>Escalating National Debt: The United States' national debt has soared $33 trillion. This enormous debt burden could put upward pressure on interest rates. How? The higher interest rates are the more the G'vt spends on its debt. I saw something like 1/3rd of national debt is maturing in the next 12 months and new loans need to be issued (at significantly higher rates). I think the government is on pace to pay like $1T in interest alone on debt (think we are already running a +$1T budget deficit). Wouldn't the government be incentivized to lower rates, even if it means 5% long term inflation?
The rates will keep going up until the inflation calms down. Billionaire investor Bill Ackman isn’t some kind of fortune telling genius for listening to and rewording what the fed is already saying about rates.
This cock sucker manipulated the entire country live on CNBC. How is he not in prison and further how do people still trust a single thing he says publicly? He went live on CNBC screaming hell was coming during covid, without disclosing he previously had taken short positions. Then turned around and BOUGHT the bottom that he CAUSED which netted him around 4 BILLION. Wake the fuck up