...right now, with the 10-year rate at 2.19% — 2.19%! — the market is basically signaling that it doesn’t care a bit about the deficit, but that it’s terrified about growth prospects.Twenty four hours later, the rate on 10-year notes climbed to 2.34%.an increase of 15 basis points in less than a full day. I wonder what Krugman thinks now.
Krugman thinks? Since when?
ReplyDeleteI'm starting to get sick of people equating the stock market or bond market with the market. This a trick often used by statist apologists to justify their Keynesian faith.
ReplyDeleteFor all we know the individuals buying treasuries could be apart of some unknown central bank program or people trying to win favor with the administration.
Also because the government is an anti-market institution then so are the debt and financers (bond purchasers) of that debt.
30 yr up 30+ bps in minutes on what would have been a failed auction yesterday, were it not for the PD's obligation to step in and buy the junk.
ReplyDeleteHe's still a genius in his own mind.
ReplyDeleteThe market isn't signaling anything. The Banksters are keeping the rate low.
ReplyDelete"Oh that? That's just a sign that the market is improving, because of Obama's spending. See? Keynesianism works. But we're nowhere near out of the woods yet, because there needs to be way more spending. The Fed could engineer another dot.com bubble to offset the collapse in the bond bub...woops, I meant collapse in the movement towards safety, Bernanke has the tools to do that. He could start monetizing new 100-year bonds. Since we're in a liquidity trap though, Obama has to increase spending by 100 bajillion kajillion bippityboppitybillion dollars, but I know he won't spend that much, so I can always blame future calamity on Obama's stingy, confidence fairy derived, right wing brainwashed, apologetic to the terrorist Tea Party spending program of "only" 100 kajillion mecka-lecka-high-mecka-hiney-ho dollars." - Paul "Hari Seldon" Krugman.
ReplyDeleteNot only 100 yr bonds. In the latest TBAC Minutes, floating rate bills were discussed!
ReplyDelete>I wonder what Krugman thinks now.
ReplyDeleteWhat a silly question, Wenzell. Krugman thinks that the Fed should print more money and that the government should spend more.
What is Krugman going to think? Whatever the situation the Krugman solution is always more money printing and more government spending.
Krugman is still thinking about how wrong he was when he said there was no way QE2 would increase commodity prices unless real demand was stimulated....
ReplyDelete...and the next day the rate was down to 2.24%. Certainly makes for convenient arguments looking at only a 1 one-day trend. Looking over the week after the S&P announcement (8/8-12) the rate is down 34 basis points.
ReplyDelete