patrick.net

edvard2 says

This to me is the bigger concern of this whole situation: Many of those "Tea
Party"/Astroturf politicians have hardly any grasp on how real economics work,
let alone the debt ceiling.

They bitch about the amount of debt and how it is a problem when interest rates are at historical lows. No clue.

Same mindset of people who would pay cash for a car instead of borrowing it at 0%. (or 1%) They don't understand opportunity cost. Meanwhile the stock market is up 15% YTD. Even AAA rated corporate debt is ~4%.

A 5 year CD at 1.5% is better than paying cash if interest rates for five years are 0%.

Interest rates are low, so the market is determining the amount of debt we have is not a risk. The risk premium is nonexistent.

edvard2 says

Many of those "Tea Party"/Astroturf politicians have hardly any grasp on how real economics work, let alone the debt ceiling. All they know is that it has the word "debt" in and so it surely must be bad versus what it really is, which is simply a means to pay bills.

That's what Mugabe says!

mell says

That's what Mugabe says!

You do realize that inflation in Zimbabwe since late 2009 has closely tracked inflation in the US, right?

Since they abandoned their currency and use US dollars mostly....

sbh says

They get their understanding from hatred and prayer. That's all they need.

Not really. They get their understanding from the large billionaire/corporate lobby-backed investments that created the so-called "party" they claim to be from. This little experiment we've seen in congress is nothing more than outside money trying to force legislation that serves to benefit those interests. Nothing more. All that was needed were to find the right people who were generically "conservative" enough who could be counted on to appeal to a largely predictable demographic to get them into office.

When the dust clears I really hope that not only Democrats, but in particular Republicans take a hard look at what caused this whole thing to get out of control. The GOP in particular needs to grow a pair and learn to say no to this group. They need to do so not only for the benefit of their own party, but for their constituency.

Luckily I do feel that at this juncture, this latest act will be the last for the tea party. Perhaps then the GOP can actually get back to being at least somewhat reasonable.

control point says

Interest rates are low, so the market is determining the amount of debt we have is not a risk. The risk premium is nonexistent.

Oh boy, It's 1999 and 2008 all over again. You can't be serious, right?

The outrages multiply!

Obamacare is a backhanded slap in the face of George Washington's corpse. I can imagine only three greater outrages in the history of the planet: The Travel Office Firings - [spits on ground] - the Permian-Triassic Extinction, and Benghazi!.

edvard2 says

The GOP in particular needs to grow a pair and learn to say no to this group.
They need to do so not only for the benefit of their own party, but for their
constituency.

The teabag morons will for the most part get voted out, except in the wacko places like all of Texas.

And the republican party will go right back to them simply becasue they call them their 'base', and it's out of necessity and numbers.

mell says

Oh boy, It's 1999 and 2008 all over again. You can't be serious, right?

Debt instruments are fundamentally different in valuation than Housing (2008) and Stocks (1999).

Rates on a long term instrument, such as the 30 year, are the geometric mean of all of the yields of shorter term instruments plus a risk premium. That is, it is the nth root of all n intermediate yields plus some factor for risk.

Conversely, rates ona short term instrument can be derived from long term instrument minus the risk premium.

All of this is to say that the when we have a upward sloping yield curve, the market is pricing in the expectation of increasing interest rates in the future or is adding risk premium.

Its why you can can a 5/1 ARM at 2.5% but a 30 year fixed rate is 3.5%.

Since inflation (and rates) are at historical lows right now, and the slope of the yield curve remains modest, the upward slope is mostly driven by expectation of interest rate increase in the future. Therefore no risk premium.

Think about it. Smart guys are betting their own money on solvency (ability to pay back the debt) for 30 years with no risk premium attached.

Stocks and houses are valuated differently.

There needs to be a federal proposition system in place ( like California ) to override the power of the fuckups that we elect.
For starters, I propose congress cannot exempt themselves from any laws they pass that the rest of us are forced to follow.

control point says

Think about it. Smart guys are betting their own money on solvency (ability to pay back the debt) for 30 years with no risk premium attached.

The long-term bond yields are significantly higher than a year ago and are influenced by the debt monetization of the Fed to a certain extent. They are still low but they will keep going higher and that will be brutal for the US debt. The US will not be able to pay back its debt without either selectively defaulting or inflating their way out of it. The latter is the more convenient option, but it's a dangerous game and crushing for the middle class. There are no smart guys, you should only rely on yourself.

The GOP has deteriorated so badly it makes me miss Newt Gingrich.

Socially liberal and fiscally conservative is not a party-affiliation, so stop calling me names, i.e. "Democrat" or "Republican". Neither one fits and is an insult ;) There are a couple of members in both parties though that approximate those views.

I'm not getting the subsidy, but I might sign up next year when our current insurance needs to renew. I do wish it was cheaper.

mell says

Barry's mission.

That's a far-right shibboleth.

mell says

If you consider Ron Paul a full-blown Republican, then you can call me a Republican ;)

I consider Ron Paul to be a dangerous crank. At least on economic issues.

I do give him credit for being against unnecessary wars.

Negotiation = socialism!

As a fake independent/libertoonian pretending to be equally disgusted with both parties, I find it obvious that those with extremely conservative views are the only legitimate lawmakers. Negotiation is like Christians compromising with atheists and Catholics: one side is, by definition, right.

mell says

Why is it so hard to believe that there are people so thoroughly turned off by how this presidency turned out that they turned their backs?

Oh I do in fact believe there are people who think like this but since they were in the minority and the majority of Americans voted Obama into office, then by the nature of how democracy works, he is the President. That's how it all works. So I'm not sure why this seems to be some sort of mystery.

mell says

against the NSA overreach, illegal wiretapping, drone strikes and useless wars, standing up against the big banks, no illegal bailouts instead adhere to the rule of law.. You know, change. It was a compelling story. He pretty much made a 180 on pretty much everything.

Good point. +1.

freak80 says

I do give him credit for being against unnecessary wars.

Ron Paul is isolationist. He still wants to fund an MIC, he just wants them to remain at home more. How useful is a massive MIC that stays in the hangar? A couple of generations without any military action at all, would turn the military machine into a worthless boondoggle that would fail the day we DO actually need it. Sad to say.

If Ron Paul were honest he'd propose defunding all foreign military bases, operations and personnel and slimming down to a Coast Guard & National Guard only.

mell says

The long-term bond yields are significantly higher than a year ago and are
influenced by the debt monetization of the Fed to a certain extent.

30 year is .75% higher than a year ago, and still under 4%. That is not significant - certainly not in the hyperinflation context you guys love to throw around. You don't understand how bonds are valued. When we were running surplus in 1999, the 30 year was over 5%. There is no correlation between budget deficit and bond yields. There is no correlation because the risk premium is zero when there is a surplus, and it is still zero when we have run a deficit.

The Fed printed money in late 2008/2009 and interest rates went DOWN. This is the opposite of what would happen if your hypothesis of "debt monetization of the Fed to a certain extent" was accurate in the slightest.

HydroCabron says

one side is, by definition, right.

And it's OUR side. Always.

edvard2 says

mell says

Why is it so hard to believe that there are people so thoroughly turned off by how this presidency turned out that they turned their backs?

Oh I do in fact believe there are people who think like this but since they were in the minority and the majority of Americans voted Obama into office, then by the nature of how democracy works, he is the President. That's how it all works. So I'm not sure why this seems to be some sort of mystery.

There's nothing in your post I'd disagree with. But since those people exist like you said, why should they be paid shills for the Republican party posting on patnet? I'd say this is the mother of all conspiracy theories ;)

mell says

why should they be paid shills for the Republican party posting on patnet? I'd say this is the mother of all conspiracy theories ;)

I don't believe there are. Was that part of the conversation? I didn't see that.

Ha ha - Dan doesn't even have the balls to respond. He started a NEW thread to insult me, because he knows he can just delete my posts. Not gonna give you the satisfaction, Dan.

This is funny, he wrote:

and the biggest loser ever to open a thread for the sole purpose of attacking another user.

So, Dan - you opened a thread for the sole purpose of attacking me, then wrote that?

What kind of shriveled-up lady balls do you have to have to delete my posts, then attack me when I start a new thread? I didn't want to have to start a new thread; he forced me to.

errc says

I'm surprised dan is censoring

Care to repost it here, now I'm interested to know what was said

I don't know how to re-post it. It was deleted. Dan posted a link to some right-wing article claiming that health insurance premiums would skyrocket for young people. I pointed out that his article fails to mention the fact that 85% of those people will get subsidies, and that they're comparing dissimilar plans, since so-called "catastrophic" plans that don't really cover anything won't be allowed anymore.

If you have to lie and leave out important information, then delete posts when people provide that missing information, then you didn't have much of a point in the first place, did you?

This is meaningless PR fluff. They won't stop funding the Teabaggers, they'll just tell them to adjust their public strategy to less DIRECT attempts to sabotage. I prefer the more honest and direct approach.

Minions: not just for Despicable Me.

sbh says

That means that the Koch bros., Rove, and their rich friends convinced less than 18% of the US population to vote their way, and yet they have the power to destroy our economy and plan to unless they get their way."

What's wrong with money buying political power? That's the Libertarian ideal. Only pussies want justice for all.

freak80 says

What's wrong with money buying political power? That's the Libertarian ideal. Only pussies want justice for all.

Everyone has their own view of what justice is. Democrats spend plenty of money buying political power too, so don't get me started.

I'm not sure how this is really "news" there have been countless reports, studies, and news releases showing exactly where the money has been coming from when it comes to these so-called "grass roots" movements. This has been going on for years. Well before Obama too. Even many of the Tea Party members are likely well-aware of this even if they don't want to admit it.

What does need to happen is more light needs to be shown on this back room type of influence. The more attention it gets, the less effective this sort of behavior will be.

sbh says

Ryan suggested significant entitlement reform

He supports significant entitlement reform until the days where he campaigns in Florida for elderly vote.

sbh says

the Wisconsin congressman angered tea partiers by not mentioning the word “Obamacare” once.

They're not into political correctness. Nope: not at all.

It's only political correctness when non-conservatives do this.

OBLIGATORY: I hate, hate, hate Obamacare. Hitler and Stalin are looking up from hell and turning pale with shock at Obamacare.

Ryan is probably simply speaking to the degree that most in his party- save for the Tea partiers- already know. They lost this one and if they don't concede, their party will suffer even more PR damage than its already received.

sbh says

Ryan is no dummy, but he is cowardly. He rarely moves outside of cover.

Maybe its actually an ingenious act. When it all comes crumbling down as it will shortly, Ryan can sit back and say: " See? I never said to repeal Obamacare... It wasn't my fault the rest in my party shut down the government".

sbh says

It may have begun already:

GOP dropping Obamacare in shutdown debate?

How rich! I'll have to go back and find the post, but I'll toot my own horn and re-mention my previous prediction:
1: Republicans would concede defeat.
2: Will say something that basically boils down to: " You guys won this time.... but we'll be back!" - in other words they'll use some other thing to try and get Obamacare defunded.

Or- maybe just maybe- they'll stop wasting time and move on to "usual" GOP type things, like trying to cut spending on any and all useful programs while increasing funding on others.

mell says

I have given my own list of issues important to me where he did 180s on

really? Can you repost it?

Most of the Republican caucus, in their hearts, supports Obamacare.

They probably also believe that taxes on the upper class are too low, and that government spending needs to be raised in some places, and slashed in others.

That said, their fundraising depends on demonizing the Democrats and limning any Democratic president as The Antichrist.

Some really are flat-earthers (Inhofe, Bachmann), but the rest know very well that Obama is not Black Stalin.

It's how all politics works, and the particular virulence of the current Republican scare-mongering derives from the intellectual and moral vacuity of their racist, dumbass supporters.

APOCALYPSEFUCK is Comptroller says

Ryan is a whimpering twit. A real conservative would demand the disbandment of Medicare and the surrender of the Social Security trust to Lehman Investors and then execute a bunch of seniors with a machete on cableTV someplace in international waters and claim exemption from murder laws "in the name of Jesus and the Founders."

His conservative values come straight from comrades Marx and Engels.

Exactly! At the very least he could organize a senior cruise and ensure that pnemounia bacteria would be pumped through the vents and name the project "Operation Fiscal Solvency."

Heraclitusstudent says

He supports significant entitlement reform until the days where he campaigns in Florida for elderly vote.

sbh says

Yes, he'll reshape the message down there.

"I promise to keep Government out of your Medicare!!"

freak80 says

"I promise to keep Government out of your Medicare!!"