6,000 Nuclear Weapons No Longer Matters?
Now we're going to have to threaten to use them....
Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.
Got that one?
The Market has now called the bluff of Obama and the rest of the government: go ahead and keep deficit spending, and there will be private companies that are safer - in terms of credit risk - than the United States Government.
This is not "exceedingly rare", it is a warning.
A strong, clear warning.
It's one I expect the administration to ignore, but sticking one's head in the sand on this issue is extremely dangerous. Doing so could easily lead to the government winding up with a spiral going the wrong way - and fast.
Don't expect Obama and Geithner to "get it" until it's too late... but as I pointed out this weekend we are rapidly approaching the point where all this arm-waving simply won't matter.
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