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  • How Will Fortune Magazine's 10 Stock Picks for 2009 Fare?
    "The Chinese and the Japanese, who have been these bonds’ primary buyers ..."

    Utter nonsense. China recently supplanted Japan as the largest foreign holder of US debt, with a total at the end of October of $652.9 billion, or 6.17% of all US debt. Japan's total was $585.5 billion, or 5.54% (www.treas.gov/tic/mfh....).

    "...[China and Japan] will transform from net buyers of US Government bonds to sellers. By drastically increasing the supply of such bonds on the market..."

    You seem to ignore your own word - transform. IF China or Japan were to become a net seller of US debt (questionable), it would do so gradually. It's not like they would one day drop all of their securities onto the market.

    "Any new US Government bonds that could be auctioned under such circumstances would be forced to pay much higher rates of interest, which would make such new issues too expensive and thus impractical."

    First off, you make no prediction about what interest rates will be.
    But US borrowing "too expensive and thus impractical"? Seriously? Has the going interest rate ever had any impact on the issuance of US debt? Did the government slow borrowing in 1981 when 3-month treasuries, which now yield close to zero, were yielding more than 14%? No, it INCREASED borrowing. So you think that in 2009 we'll see 3-month treasuries yielding at least double-digits, right?

    But beyond that: you think the Fed will have no "interest rate control mechanisms" that aren't "out of commission." Sounds like you mean that the federal funds rate will remain near zero while short-term interest rates are double-digits.

    Think about it, or take a look at a chart - federal funds is almost always very close to the 3-month rate, and when it's been out of whack fed funds has always been higher. You're trying to describe a world where a bank can borrow from the Fed at near-zero rates, then use that money to buy short-term US debt that yields 10+%. It's pure fantasy.
    Jan 05 12:37 pm |Rating: +1 -3 |Link to Comment |View article
  • Yahoo: Disband Quietly - Fast Money Recap (6/12/08)
    Regarding Lehman: if Callan did in fact have the company in the market diminishing its capital through stock repurchasing in the $33 range, she deserved to be dismissed. Is she was just "carrying water" for the honchos, then she wasn't really a CFO anyway, and needed to be dismissed.
    Jun 13 08:14 am |Rating: 0 0 |Link to Comment |View article

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