Normally, investors rush into Treasurys at a whiff of economic chaos but now they are selling them as not even the lure of higher interest payments on the bonds is getting them to buy. The freak development has experts worried that big banks, funds and traders are losing faith in America as a good place to store their money.
“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”
That could be bad news for consumers in need of a loan — and for President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets.
God investors are dumb as shit
raises fear that confidence in America is fading
Just now that fear is being raised?
Why would anyone still have faith in this country?
That’s how shit the rest of them are.
European markets and bonds seem to be catching a lot of the fleeing capital so… big doubt.
We were up 3-0 in the finals and blew the lead. Enjoy generations of poverty if your family can survive the great depression.
People from the U.S. (and even parts of Europe) do not understand how corrupt, stupid, and unstable majority of the world is. It is genuinely unfathomable.
This does not excuse the fascism of the current admin, nor the war-crimes of the U.S. as a whole, but they are nowhere even remotely close to the likes of Moldova.
USD denominated bonds are by definition 100% exposed to the USD and it has been falling consistently (with but a single dead cat bounce) against other major currencies since Trump took over.
International investors are probably avoiding the Dollar (and hence Dollar-denominated assets) in favor of other currencies.
This would also explain why Gold keeps on beating records almost daily: it’s sort of a “traditional” currency hence benefits from outflows from major currencies.
If this turns into the end of the Reserve Currency status for the USD, expect massive problems in the US with Inflation and servicing the massive US National Debt (if Treasury auctions have lower demand, Treasure yields have to go up in order to sell them, which is equivalent to say that interest rates on US Government loans go up).
Which makes sense to all of us who see Trump as a Russian asset who’s goal is not to cripple America but to destroy it. This is the end game and why Americans need to really ramp up their protests. This is the literal death of America we are witnessing as killed by Russia (and probably China too)
killed by Russia
And don’t forget tech-bros like Elon Musk.
And remember he doesn’t have to be an official asset, merely being someone useful to them effectively does the same thing - with deniability for the Russians
When US policy can change in hours, based on the whims of a madman, it’s not exactly difficult to see why people lose faith in that stability. Investors want long term stability, and right now things are complete chaos.
As a guy who thought about buying bonds recently and decided to go to gold instead, my thinking was that Trump and/or Elon could definitely make some attempt to steal/divert treasury bonds, hold bonds hostage for some change he wants, or some other fuckery. The US can’t go bankrupt - so long as you can trust the leaders to do the most basic rational things. But you can’t trust them to do that right now.
If the US loses it’s Reserve Currency status because too many international investors are existing it, more printing will directly translate to Inflation.
So whilst technically the US can’t go bankrupt, it most certainly can end up with Hyperinflation and all its problems if the printers start going full steam (metaphorically speaking, since nowadays most currency is digital) to stop the bankrupting of the US following Trump/Musk fuckery and foreigners (as well as larger local investors) refuse to buy those new Dollars and actually accelerate their the exiting from positions in USD (and that’s not just going to be cash positions but also USD-Denominated assets such as Stocks, Bonds and Treasuries) which seems to have been started happening already judging by news such as this.
I’ve stopped assuming these guys will account for facts, nor that they keep the “no” finance guys around when making decisions.
I think 100% of decisions are made by Trump in the Oval Office based on the object permanence of the last person or tweet he’s seen.
I can heartily say as an American I have no faith whatsoever in this country and wish all the best in the world to the Canada-Europe-Japan conglomerate to be the only possible beacon of hope on the planet.
They (trump, republican toadies billionaires ,etc) have no faith whatsoever in this country either. that’s why they’re grabbing everything they can, selling the country for parts and fucking off to Greenland.
Nothing will meaningfully improve until the rich fear for their lives
Desperation is unlikely to produce meaningful improvements
We got powerful armed unions after the Ludlow massacre/10 day war, and workers rights/min wage/40hr work week after triangle factory fire and the ensuing riots.
Blacks got the right to vote after the death of MLK and the ensuing riots and organized violence of the Black Panthers.
It’s sad how suppressed our educations are in this police state of a country.
That’s the only thing that ever has
Why not?
This is arguably bigger news than the stock market.
It definitely is. If bonds don’t sell, or at least no longer sell cheap, then the US might get bigger problems with their budget.
If US Bonds are no longer the de facto safe haven asset…
The USD is no longer the world’s de facto reserve currency.
That means that even if all the tariffs were rescinded, Trump croaked and somehow JD Vance took a ‘be at least somewhat more competent and less stupid’ pill, and never reinstated them…
Well it would mean the dollar would crash against other currencies, we wouldn’t be able to import anywhere near as much, and US international debt payments as a percentage of the yearly budget would climb fast.
… And then that could spiral into both massive austerity at home, and/or ‘lol we are defaulting on our international debt’ either by formal declaration, or… basically hyperinflation.
That means that even if all the tariffs were rescinded, Trump croaked and somehow JD Vance took a ‘be at least somewhat more competent and less stupid’ pill, and never reinstated them…
It’s too late for that. The US has shown that any appearance of stability can be upended at the whim of whatever singular person is president at the time, and there are no systems in place to prevent that. The idea of “checks and balances” has been shown to be a lie.
Trump signed a trade agreement with Canada and Mexico last time he was president and immediately violated them at the start of this term. He’s been constantly back and forth on tariffs with no warning. The word of the US has become completely worthless.
It doesn’t matter if all Republicans suddenly realize “this is bad”, remove Trump, and put someone stable in his place. The world had been shown that regardless of how stable the current president is, in 4 years the citizens could vote for a complete idiot (and I remind you Trump did win the popular vote. The citizens voted for this) and the market is in turmoil again.
Other countries aren’t unstable idiots of course and aren’t going to tear up existing agreements (because they value stability) but they sure as fuck won’t be renewing any contracts (at least not without far less favorable terms for the US and escape hatches incase another idiot is put in charge) and will be making contracts with other nations instead.
Trump has killed the US and a financial superpower, the US just doesn’t know it yet. It won’t be felt until existing contracts expire and new ones are signed.
No disagreements, no notes.
We (USians) are completely cooked, totally fucked.
We’d have to erect a new government, and then actually demonstrate stability for a decade or two… to begin to be able to undo Trump’s damage, to be treated as anything other than basically a rogue nation that also has the world’s… either the first or second largest/most powerful military.
I can only hope some more civilized places may begin to more seriously consider Americans seeking asylum… though I of course completely understand why they wouldn’t.
then u sell ur aircraft carriers and f35s lul
Oh sure, here, buy our aircraft carriers and aircraft that even we can barely understand our own logistics and and maintenance supply lines and procedures for, that will all nearly mmediately break if they stop getting software updates.
Like, I hear you lol, but its kinda like saying ‘sell your literally custom made hyper car that will depreiciate by 80% in value and the parts manufacturer will go out of business when you buy the car.’
I am saying you’d have to be an idiot at this point to buy one, we wouldn’t be able to sell them at this point.
Now I am all for downsizing the military in general, have been for basically all my life since middle school… but uh yeah, that would look more like decommissioning and downsizing.
But uh also also, the military industrial complex are basically the only domestic manufacturing jobs we really have, aside of our shitty overpriced domestically assembled but internationally owned and sourced consumer cars… and the Trumpublican party is, you know, in charge, what with the fascist coup and all that.
That’s not what happens in this scenario… Those aircraft carriers and F35s get activated.
For another victory in Afghanistan?
Hey.
HEY!
There are a lot of penguins on some godforsaken island in the middle of nowhere that need to be bombed until they understand democracy and freedom.
(‘freedom’ and ‘democracy’ subject to terms and conditions, limited time offer, no refunds)
republicunts plans to finance rich people tax cuts with additional debt in shambles
i heard this was thier lynchpin to fund the tax cuts?
Bond sales are only politically connected to the budget; not financially. Not selling bonds would in no way hinder congress from passing a budget.
Not really. US debt is held in those bonds, and it is a perpetual game of selling and repaying them. If they don’t sell anymore, the old ones have still to be repaid - or default. You don’t want to experience this.
I’m no expert but it seems to me if the yields have to go up to get buyers, it’s like raising the interest rates on a loan. You can still get the loan but you have to buy less car/house if you want to afford the payments.
You’re mostly right.
Most T Bills and Bonds… they don’t work like a credit card or a home loan.
Those are things you pay a bit on every month, and the interest rate is an APR, which means Annualized Percentage Rate, which means the monthly interest rate you are paying is the APR divided by 12.
So with those, the bank gets money every month untill you pay it all off.
With Bonds… say a 5 year Bond… you pay for the Bond, newly issued by the US govt, and 5 years later, you hand it back to them, and they pay you the face value + interest rate.
But, people who have already bought a bond, well they can sell it again, before it matures, to… some other guy, some other country, some other firm.
Thats called the ‘secondary market’, and most of the time you hear a news story about bond prices and yields, its a second party selling a bond to a third party.
Generally, when the US does an issuance auction of new debt directly… well, it has to generally track the prices and yields set by the various secondary markets, sorta like how you’d wanna check a car salesman’s price against kelly blue book to make sure you’re getting a reasonable deal.
There were moments in thr GFC, 07 08 09, where US debt auctions … didn’t actually result in the amount of bonds expected to sell, actually selling, because there were enough potential bond buyers who assessed that the US was offering unreasonable prices and yields, given the economic turmoil.
… I am not an ‘expert’ either, but I do actually have a BSc in Econ, and I apparently remember a good deal of my courses, and enjoy infodumping lol.
There are two different kinds of bonds, you described the couponless bonds, but most bonds pay a coupon. We are responsible for paying interest on those bonds bi-yearly. It’s an important part of the trade dynamic because the bonds can be traded for USD and produce USD for the older. If there is no international trade there’s no reason for them to hold our bonds.
So just to help your example most people are looking for the cashflow. They give the US $1,000 and they want the $40 a year. They can then use the 40$ a year to exchange for goods and services without having to shuffle around much money. Since banks, countries and industrys are tied to this income the threat of default is truly a global wrecking ball.
Ah, ok, I appreciate the correction!
Doing my best trying to remember my course work from almost two decades ago, looks like I missed an important detail.
… and that detail makes the situation… even worse, wonderful.
Thank-you for your info dump :)
Yay, validation lol!
The prices and yields of bonds have an inverse relationship:
If price goes down, yield goes up.
The yield is also known as the interest rate.
This interest rate * the purchase price is paid by the US government to the bondholder at the end of the duration of its term.
When you look at the US Federal budget, and see the amount that goes toward making debt payments…
This, bonds, are a very big part of what you are looking at.
If the interest rate on US debt instruments are going up… that means more and more of the budget has to be allocated toward debt repayment.
While yes, extremely directly, bond yields rising doesn’t… mechanically make the passing of a budget impossible in some kind of procedural way…
It very much makes the stakes higher as now our growing debt problem is growing even faster.
Waaaay biger news
Can’t fund that big bad military when all those dollars go to pay off those bonds.
I sold some bonds 3 days ago. I just don’t trust this administration won’t default on something in the next 6 months. Or do something else to drop out AAA rating.
Yeah, I’ve been trying to figure out what to do rather than just holding cash (cause inflation is likely to go up). But bonds don’t feel safe, I think the best bet is looking to assets outside the US, but that’s exactly what this article is calling out, the US doesn’t feel safe anymore.
I’m debating precious metals or possible even Bitcoin since that’ll probably get pumped by the admin announcing the government buying it. Problem is they might try and sell off gold to do it which would probably drive down the price of that.
But I’m sure there won’t be any insider trading of those before it happens /s
Preventing this was originally what people thought was causing him to pause
There’s a reason for that. Maybe if all those well-off bankers hadn’t thrown in with trump in hopes of deregulation their portfolios would still be slowly climbing up with the DJIA under a democrat instead of flopping around like a fish out of water under trump.
If ya’ll want another layer of irony to all this:
George Soros initially rose to general public fame/infamy with large bets against British Pound in 1992, that effectively defeated the Bank of England’s attempts to stabilize the currency, resulting in its devaluation, and something like a billion $ profit for Soros.
Fast forward to now, and Trump supporters have spent the last 5 or 10 years acting like Soros is secretly the most underhanded and influential ‘world controller’ bogey man that exists, and they blame everything they don’t like on being funded by him… despite pretty much all of his charities and funds and causes he donates to being publically available knowledge… and despite Soros being a fairly small fish in the modern ocean of much, much more wealthy and infuential corporations and individuals.
… So, now, Trump very well may have done basically the same thing as what Soros did 3 decades ago: force the devaluation of the USD and cause economic mayhem, but… at a much, much larger scale than Soros did.
The Trump supporters have utterly and entirely lost their own plot, that they themselves mostly fabricated.
Soros gets blamed not because he is a democratic billionaire, but because he’s a [[[certain kind]]] of democratic billionaire.
After the fall of the USSR he was a major funding source for anti-corruption and pro-democracy efforts that disempowered Russian interests in several countries. White supremacists sharing Russian propaganda back then is where the conspiracy theory started, at least in the US.
His charities helped a lot of liberal politicians in Eastern bloc states start their careers by providing education and funding.
Including one Viktor Orbán.
That’s not really on him personally though, as much as I can’t stand Orbán. Presumably some of those other people went on to become doctors, teachers and so on as well.
accidentally drops my latkes on the floor
Wait, what ever could you mean?
Because every accusation from them is a confession. They didn’t yell at Soros because they hated what he did, they were just jealous.
Oh come on, “Freak” sell off makes it sound like there’s some mystery as to what caused this when it’s blindingly obvious what the problem is here. The markets, and far more importantly all decent and rational people throughout the world, won’t and shouldn’t have any confidence in anything as long as Donald Trump is president. The only thing that starts to fix this mess is his resignation or impeachment (and that is only a start, investigations criminal charges and sentences amendments to laws etc. all need to happen too).
since impeachment happened twice with trump, with no convictions, only for show and sound bites for MSM, its unlikely he will get charged or sentenced at all.
Not happening, so I’d plan accordingly.
The only thing that starts to fix this mess is his resignation or impeachment (and that is only a start, investigations criminal charges and sentences amendments to laws etc. all need to happen too).
Or removal by other means.
maybe you shouldnt have backed trump in his eleciton.
I guess I picked a bad time to stop huffing glue.
Can you fly this economy and land it?
Have you ever been to an El Salvadorian prison, Joey?
Joey, do you like it when JD Vance rubs up and down on your leg?
You ever seen a grown man naked?
Surely you can’t be serious.
Johnny what can you make of this?
It’s not really a “freak” event when the causes are blatantly clear and self-inflicted.
I am very annoyed that this use of ‘freak’ and further corruption of the term ‘black swan event’ have just gotten completely common place.
A black swan event is supoosed to be something completely impossible to have been predicted before hand because you didn’t have enough knowledge to even understand there was a kind of risk you were not accounting for.
An ‘unknown unknown’, to use the only useful idea Donald Rumsfeld ever came up with.
… This bond sell off is utterly predictable, unless you are completely brainwashed into a delusional level of normalcy bias and complacency.
All you have to do is realize the US is acting like an unstable dictatorship… which it very obviously is… and this is an easily predictable outcome for anyone with a decent knowledge of macroecon theory/history.
Just because we have chiselled abs and stunning features, it doesn’t mean that we too can’t not die in a freak gasoline fight accident.
