Search results

MAW, with all due respect: a) the various points you make are all reasonably well-known; b) their validity doesn't change the fact that we're discussing an imperfect heuristic, rather than a mathematical proposition; c) since I know sle quite well, I know he IS in fact an extremely...

Now that we have our true resident options experts, bwol and tj, weighing in on the subject, it's officially hopeless.

Non-commerical USD longs are still near record high (off the recent peak, but still extreme). One change has been that AUD and JPY are now in long territory, which suggests that people are long everything vs EUR.

Sure thing... I suppose we should really call what the BoJ is doing Credit Easing (CE), rather than QE. And, to me, the striking difference is the quality of the assets they purchase, rather than the quantity. Moreover, they have been getting proportionately more aggressive with their...

This pricing actually makes some sense, given the structure of the EFSF and the portion of it underwritten by the Germans. So EFSF is not really subordinated French paper and it can trade through France. Ultimately, however, it depends on the conditional default probabilities, as well as the...

Well, I don't know of another CB that is buying quite such a plethora of private assets (REITs, ABS, equities, you name it). To me that's pretty extreme.

Well, Japan has been doing pretty serious money printing all along... Far more serious than Bernanke, Merv or anyone else. Not enough to offset the other stuff, obviously. As to the JGBs, looking at the futures doesn't really work due to the occasional CTD changes. Also, your figures...

+1

I have no problem with that... Isn't it the American people who are supposed to get all this accomplished? And, if they're not getting it done, they must be happy with the status quo, which brings us back to the original problem.

Nothing wrong with that... However, I am curious as to who you think should bear ultimate responsibility for things going wrong in a democratic society.

Well, don't vote for them next time, recall them, impeach them, whatever... Failing that (let's say you're a minority) and provided you're that unhappy, renounce your citizenship and find a better place to live. If you're not sufficiently unhappy to leave, quit your whining and just grin and...

Precisely... Point is that the electorate is ultimately responsible for both the numerator and the denominator. If the citizenry elects representatives that are not capable of cutting spending, the citizenry must pay for their failure through higher taxes. Isn't that ultimately what democracy...

I am certainly happy with disagreement... And yes, the Irish govt was running a deficit prior to the crisis, but they had the room for it, as their prior stock of government debt was just so low. So, just like some others, they were running a deficit that they could easily afford. In...

Ireland is a reasonably good example, because their recent deficits have been caused by their banking system and by the Euro, rather than by their tax policies. Again, US and the UK are running similar deficits and are doing nothing about them. While I agree spending is a problem, that's a...

Sure, and now they're paying for it, by increasing VAT (among other things). Countries like the US are running large deficits even now and that's w/o VAT. A country like Norway is in surplus, with an extemely low debt load, and yet it has VAT. Then there's Poland, South Korea and New Zealand...

Yep, so bills trading above par would mean negative yields, which is a reasonably rare occurrence. For an explanation of why this can (and does) happen occasionally see my earlier post.

Yeah, but surely we can't blame VAT for their current predicament? Moreover, Ireland is actually doing quite a lot a better than a whole lot of other places. Finally, according to what I have seen, throughout the 00s, Ireland had the one of the lowest effective personal income tax rates in...

T-notes ARE bonds (as opposed to bills) and yes, bonds, including t-notes, can easily trade above par (as Mav74 mentioned). And no, if you buy a bond above par, that doesn't necessarily mean that you will suffer a loss at redemption.

Well, quite clearly, taxes don't have to be everywhere and always like vampires. If your political system and institutions are so screwed up that they can't come up with a taxation framework that's optimal for the population and acceptable to the majority, how is that a problem of the VAT...

Yep, I mean like in parts of Europe... Specifically, I mean like in Ireland, where they did, in fact, slash taxes (e.g. corp) after they adopted the pan-EU VAT framework (although not sure there's any causal relationship).