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Category Archives: bond market forces US debt reduction

Weekly Short Economic Stories

Profit margins in this quarter’s US earnings season are the highest ever. Revenue growth isn’t impressive, and most of the growth continues to be from business units outside the US. But what is impressive is how companies are holding down costs. Thank you 16% real unemployment rate. Profit margins are one of the best mean-reverting datasets there are –> translation: if something tends to […] Read the rest of this entry »

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Weekly Short Economic Stories

The US debt ceiling talks continued -more or less. It comes as no surprise that Congress and the White House are taking until the Treasury imposed deadline.  The $4T deficit reduction deal is apparently off the table, and we’re stuck with trying to get a $2T reduction done. Doubtless even that would have most of the cutting 5-10 years out.  Pathetic.  If $2T is […] Read the rest of this entry »

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Weekly Short Economic Stories

$200B/year in cuts will not get the job done. Back in April I crunched some numbers on what I thought we’d end up with in terms of a deficit cutting plan (which was oddly enough – $200B in cuts per year for 10 years).  This is the sort of graph that NEEDS to be shown to the public so that necessary cutting of $300-$400B/year […] Read the rest of this entry »

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US debt warning from S&P

The week started with a bang.  S&P ratings agency issued a statement reaffirming US Treasury bond AAA credit rating, but they issued a negative outlook which means there’s a 1 in 3 chance of lowering the debt rating in the next 2 years. In the 70-year history of S&P, they’ve never put US sovereign debt on a negative rating watch. This is the least threatening […] Read the rest of this entry »

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