The Times reports
So why did the interest rate paid by the downgraded U.S. to lenders go DOWN not UP? The stock market fell again today, by 6% pushing it into negative territory for the year. Why didn't the Republican debt triumph restore confidence in the stock market?
Did the S&P downgrade lead investors to conclude that U.S. debt is unreliable? And therefore demand the feds pay higher interest to reflect the increased risk? NO, because Treasury bonds are actually AAAA! as Obama said. The U.S. paid less to borrow money today than it did before the debt deal. And investors bought lots of it. But you would never know that by following any of the headline news services.
What actual investors fear is that the people are going broke - thanks to the government austerity policies that the elite and the deluded applaud as they vote Republican, Tory, Christian Democrat, Berlusconi, etc.
So what actually happened today is the stock market went down, so people bought secure debt: 10 year U.S. treasury notes at 2.4%. Another group of ignorami (retirement advisers) used to tell us that we could expect an 8% return on our retirement savings. Really? 10 year treasuries are a good deal - compared with giving Citibank $1 million. Citi is paying .50% That is one-half of one percent.
Wall Street stocks plummeted on Monday as skittish investors, already concerned about the economy, struggled to work out the implications of an unprecedented downgrade of the United States government’s credit rating, and sought safer places to put their money.The "safer place" was... U.S. Treasury 10 year bonds!
So why did the interest rate paid by the downgraded U.S. to lenders go DOWN not UP? The stock market fell again today, by 6% pushing it into negative territory for the year. Why didn't the Republican debt triumph restore confidence in the stock market?
Did the S&P downgrade lead investors to conclude that U.S. debt is unreliable? And therefore demand the feds pay higher interest to reflect the increased risk? NO, because Treasury bonds are actually AAAA! as Obama said. The U.S. paid less to borrow money today than it did before the debt deal. And investors bought lots of it. But you would never know that by following any of the headline news services.
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| interest rates on 10 year Treasury bonds |
So what actually happened today is the stock market went down, so people bought secure debt: 10 year U.S. treasury notes at 2.4%. Another group of ignorami (retirement advisers) used to tell us that we could expect an 8% return on our retirement savings. Really? 10 year treasuries are a good deal - compared with giving Citibank $1 million. Citi is paying .50% That is one-half of one percent.
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