November 5, 2024 at 11:28 AM Today is election day and I needed to take a break and decided to watch CNBC videos on government debt. Found a fantastic run down on an argument for U.S. state debt defaults (Why 27 States Are Going Broke). The fact that the huge Covid stimulus has run out and most states didn't need it that much and spent the money or lowered taxes. They are now addicted to Federal stimulus that is now gone.
November 14, 2023 at 11:42 PM There is big money in US household's balance sheets. And it is currently unrecognized. Matt Levine of Bloomberg Opinion writes about it this week. He explains it well. Here's a link but you have to scroll past another one of his hit pieces on Goldman Sachs to see it.
Mortgage mark-to-market
At the Wall Street Journal, James Mackintosh has a fun column about the fact that a lot of US homeowners3 are sitting on big mark-to-market gains on their home mortgages. If you borrowed $500,000 to buy a house at 3% interest for 30 years, and then mortgage rates went up to 8%, that mortgage is now arguably worth just $287,000. Your debt went from $500,000 to $287,000, so your net worth increased by $223,000. Mackintosh writes:
Apply the logic used in the market, and there’s been a transfer of well over $1 trillion in wealth from banks and bondholders to borrowers as rates have soared—a gain in wealth widely ignored by the beneficiaries . . ." read more (but you have to scroll down to find the mortgage stuff).
As I see it, some Wall Street genius will come up with a way for consumers to buy their mortgages back from the anonymous investor pools that own them. You read it here first.
Hat tip to David Zale for bringing this to my attention.
Disclosures: My wife and I have a mortgage we took out at 2.25% 10-year interest-only mortgage - the proceeds are nicely invested in a mix of stock funds, preferred stocks and US treasuries. Let's hope in 8 years when it comes due the investments are worth more than the mortgage.
February 22, 2023 at 11:25 AM I've been clearing up some old emails and found one from 2016 of US Debt Clock.org. This one has so many data points to geek out on. Most alarming statistic $246,844 of government debt per U.S. Taxpayer. YIPES.
Debt Clock
August 27, 2015 at 5:03 AM My buddy, and market cognitive psychology expert, Stephen Duneier of Bija Advisors puts some perspective on recent market movements. His two points: first, the correlation between US and Chinise stock markets (.215 monthly) is low, very low. He notes that the two markets moved in the same direction in only 57% of months - that's pretty close to random. Secondly, when you look at recent US market movements in the attached rolling monthly chart going back to 2009 they don't look so special.
August 9, 2011 at 3:26 PM 
The Federal Reserve Open Market Committee (FOMC) statement that it will keep interest rates near zero until mid-2013 basically will create a bubble in everything except U.S. dollars. Where will you see bubbles? Stocks, gold, bonds, Asian currencies, commodities, Swiss Francs, old cars, collectibles, worn-out shoes, sand and just about anything
