how long is this nonsense in America expected to last? anyone know

The_White_Horse

I hear there is something important on 17 october - a potential default - is that correct?

WestonDave

Does the fact that they aren't spending anything now stave off the 17th October (debt ceiling) on the grounds that if they aren't spending anything and the good ole yanks are still paying their taxes, their coffers should be filling up nicely?

Novel way of cutting public debt if it does work like that!

MacMickster

Not according to the Tea Party nutters. The potential default is a myth promulgated by lefties, economists, journalists, those with more than one brain cell, those who don't marry their sister etc. etc.

The_White_Horse

funny how the states seem to be continuing regardless of all these "non-essential" staff not working.

that said, the Republicans need to sort this out. the Bill was passed into law, so accept defeat and get on with it. madness.

socialised medicine is a good idea. what the NHS has become is not a good idea.

Generali

Here is a list from Bloomberg of the US Treasuries that are coming due:



The problem apparently comes when the 15th November payments become due.

There is a potential solution however, one which will almost certainly will come to nothing but it's quite interesting anyway.

Normally when you buy a $100 long term bond, you pay about $100 for it more-or-less. So you pay $100, get 10 or whatever years of coupons (interest payments) and then get your $100 back.

However, what about you pay $100 for a $300 bond and get correspondingly small coupon payments over the 10 year period? If you do that the debt is only $100 according to the law as reported by Bloomberg today.

I honestly can't see the US defaulting. They'll have to stop the pension checks before that happens and that will cause uproar among heavy voting, Republican White People.

Loughton_Monkey

Generali wrote: »

........There is a potential solution however, one which will almost certainly will come to nothing but it's quite interesting anyway.

Normally when you buy a $100 long term bond, you pay about $100 for it more-or-less. So you pay $100, get 10 or whatever years of coupons (interest payments) and then get your $100 back.

However, what about you pay $100 for a $300 bond and get correspondingly small coupon payments over the 10 year period? If you do that the debt is only $100 according to the law as reported by Bloomberg today.

I honestly can't see the US defaulting. They'll have to stop the pension checks before that happens and that will cause uproar among heavy voting, Republican White People.

This is, of course, a rather silly solution dreamt up by accountants. Technically it works, but there are loopholes:

1. Just as the treasury can unilaterlly change the rules to allow "Premium" Bonds [nothing to do with NS&I-types Premium Bonds], they could also change the rules to allow them to buy back a 30 year bond early. So all these investors invest $300 at a much higher rate on the nominal $100, get 1 repayment, along with a "Dear John" letter saying we have closed the bond and here's your $100 capital back. You've just been ripped off by almost $200. A Ponzi scheme if ever I saw one!

2. If you somehow legislated for (1) not happening, then I am sure that cash rich DOW companies would line up to stuff all their cash into these bonds. Every $30 million invested would doubtless appear legitimately in their books as 'worth' $10 million. So there's a $20 million tax loss straight away.....


...... large gin & tonics all round....

Prothet_of_Doom

I was in dayton for a wedding last week and there are only 2 things tourists can do in the 'Birthplace of Aviation'

One is visit the
National Museum of the USAF
http://goo.gl/maps/VHfZC

Which was closed.

And the other thing to do is.....erm... no sorry there isn't anything else worth getting out of bed for.

HAMISH_MCTAVISH

There's always the nuclear option.......

The_White_Horse

Prothet_of_Doom wrote: »

I was in dayton for a wedding last week and there are only 2 things tourists can do in the 'Birthplace of Aviation'

One is visit the
National Museum of the USAF
http://goo.gl/maps/VHfZC

Which was closed.

And the other thing to do is.....erm... no sorry there isn't anything else worth getting out of bed for.

would you have gone there for the museum if you weren't going for the wedding?

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

There's always the nuclear option.......

You mean the US Treasury's own version of Bitcoin.

ging84

I don't really understand the shutdown, they have now said they are getting back pay, so how does this actually save any money?

if i was getting paid anyway, personally i'd be inclined to go to work anyway, i might take a long lunch, knock off early, and spend more time on the internet than normal, but i don't see why everyone needs to sit home on paid leave because of some argument in Washington