1. Great Reminder from Howard Lindzon….1998 Forbes Cover ….Feel Familiar.Continue reading
1. Rising Rates? A 3% jump in yields would send the U.S. debt service from $303 billion to $975 billion.
We would spend more on debt service than defense, and would approach the cost of funding Social Security. The Federal Reserve knows how tenuous the situation can become if yields were to surge higher.
Barrons-Scary Debt-Service ScenarioPCM Report June 2021 https://www.barrons.com/articles/keep-an-eye-on-the-money-supply-its-been-shrinking-51622851213?mod=past_editions
10 Year Treasury Yield 1.56% Last
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1. Money Market Funds Getting Overwhelmed with Wall of Cash.
Dave Lutz at Jones Trading -If government money market funds have to keep investing at zero per cent, the economics of the industry “breaks down”, said FT – A steady drip has come from the Fed, which is buying $120bn of Treasuries and agency mortgage-backed securities each month. The Treasury department has compounded the situation by doling out funds associated with the Biden administration’s stimulus package passed in March. At the same time, the Treasury has also been shrinking the stock of short-term bills in circulation as part of its efforts to lengthen the maturity of the government’s outstanding debt.Continue reading
1. Market’s Attention to Geopolitical Risk Drops to Negative….Lowest in 5 Years.
Chart of the week-BlackRock Geopolitical Risk Indicator – globalContinue reading