They are talking about reintroducing the 30 year bond

[still_one]

for years they were saying their was no reason to have a 30 year bond, and got rid of new issues. Now they are talking about bringing it back

Any idea what the implications mean?

[unblock]

1. it confirms that they're F*CKING IDIOTS, or WORSE

why the HELL didn't the government lock in low long term interest rates before they started jacking up rates?

well, in truth, the answer is that they wanted the actual interest payments during the shrub years to be low, especially prior to stealing the second election. now, the government will have to pay for this deep into the future because either we continue to finance with short-term debt, which rises as the fed hikes with short lags; or, we finance the debt with 30-year bonds, which are now higher than when they were prior to the fed hike cycle started.

we should have locked in the lowest rates when we had a chance. and no, this didn't take a market-timing genius, this was patently obvious.


either their truly incompetent, or they just don't give a f*ck about government financing, or they are actually trying to bankrupt the government.


in the short run, at least, this will put selling pressure on the long bond, which means the 30-year bond will increase a fair amount in yield.

[still_one]

2. Thanks

I didn't understand why they were so hot to get rid of it in the first place

[AllegroRondo]

3. They got rid of it during the Clinton years

we were running a budget surplus and didnt need to borrow money on long term bonds.

Now that we are in huge deficits, it makes sense to lock in the interest at long term rates before the rates go up more.

[still_one]

4. really, I remember Paul o'neil really pushing it

[still_one]

5. you are wrong, it was under bush, in 2001

In October 2001, back when Federal Reserve Chairman Alan Greenspan was worried that massive government surpluses would force the repayment of all government debt (hah!), the U.S. Treasury stopped issuing the 30-year bond. And despite calls for its revival dating back to at least December 2002, when Mike Steinberger suggested bringing it back in this space, the Bush administration remains emphatically opposed to the long bond's return. "We have no plans to issue 30-year bonds," Timothy Bitsberger, the assistant treasury secretary for financial markets, told reporters on Wednesday.

http://slate.com/id/2113154

[ProfessorGAC]

7. However, His Reasoning Is Still Correct

The timing may be in error, but they're following a standard banking protocol of extending the liability of the loan. The debt incurred now is only a liability in 30 years, which gives them far more time to enhance revenues and "profitability" to ahve the cash they'll need at that time.

Banks also do this all the time by offering longer term CD's and notes to savers. This gives them liquidity (as cash) and know that they won't have to face a run-off of those funds for several years.

This is good business. It's just that it should be unnecessary. The idiots in this administration ruined a great financial position and now have to borrow to survive. It's stupidity in the strategy, but sound in the follow-up tactics.
The Professor

[AllegroRondo]

8. My mistake - must have misheard the news this morning

[newportdadde]

6. Did you know new issue Series EE bonds are now locked in?

Happened this past month, interest is now locked in on new Series EE bond. Must realize were this thing is going.

[mmonk]

9. Since paying our bills is no longer a concern by our government

what would a real rating be on these bonds?