Comments on: Sometimes I agree with Dr. Jen http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/ Thu, 14 Oct 2010 13:09:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: psh http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94414 psh Fri, 26 Jan 2007 13:31:53 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94414 Stakes are higher in a hollowed-out, stagnant shell of a country with an gluey inbred caste system. Your derisory petit-bourgeois skills aren't worth squat unless you get the chance to rub elbows with your betters at Ivy Club, or at least Cottage or Cap & Gown, not that there's anything wrong with that. Your betters need the extra wealth and ease to think lofty thoughts. Stakes are higher in a hollowed-out, stagnant shell of a country with an gluey inbred caste system. Your derisory petit-bourgeois skills aren’t worth squat unless you get the chance to rub elbows with your betters at Ivy Club, or at least Cottage or Cap & Gown, not that there’s anything wrong with that. Your betters need the extra wealth and ease to think lofty thoughts.

]]> By: Guest http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94413 Guest Fri, 26 Jan 2007 11:45:18 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94413 and you're not there anymore... a whole bunch of people in the financial sector don't have much in the way of power, money or prestige - only aspirations - and very demanding bosses and clients. Any power and prestige they may attain (and need and want just to survive) doesn't last long if they don't deliver the profits. but I'd bet the Chinese student that is trying to sue his way into Princeton is after all three (interesting something like that would be happening if the U.S. is on the verge of collapse.) and you’re not there anymore…

a whole bunch of people in the financial sector don’t have much in the way of power, money or prestige – only aspirations – and very demanding bosses and clients. Any power and prestige they may attain (and need and want just to survive) doesn’t last long if they don’t deliver the profits.

but I’d bet the Chinese student that is trying to sue his way into Princeton is after all three (interesting something like that would be happening if the U.S. is on the verge of collapse.)

]]> By: bsetser http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94412 bsetser Fri, 26 Jan 2007 11:04:58 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94412 if only. at the treasury, we had power and presige ... if only.

at the treasury, we had power and presige …

]]> By: Guest http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94411 Guest Fri, 26 Jan 2007 09:03:24 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94411 power = prestige = money http://www.nacubo.org/documents/research/2006NESPressRelease_website.pdf power = prestige = money

http://www.nacubo.org/documents/research/2006NESPressRelease_website.pdf

]]> By: bsetser http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94410 bsetser Fri, 26 Jan 2007 08:28:06 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94410 Academics care about academic prestige; bureaucrats about power; financiers about their annual bonus ... I don't think the most traders care so much if the bond market isn't as powerful as it once was so long as their bonus is getting bigger. that is all. Academics care about academic prestige; bureaucrats about power; financiers about their annual bonus …

I don’t think the most traders care so much if the bond market isn’t as powerful as it once was so long as their bonus is getting bigger. that is all.

]]> By: Guest http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94409 Guest Fri, 26 Jan 2007 08:17:33 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94409 re: "They may not be as powerful as they once were... but they are a lot richer than they used to be. And Wall Street and the City have always cared more about money than any thing else ... " except for, perhaps, Moscow and Beijing? which, according to some sources, are said to be winning the 'greatest wealth gap in the world' contest. 'East' or 'West', what do the folks in academia, government and labour care about most? just not sure where you're going with this. re: “They may not be as powerful as they once were… but they are a lot richer than they used to be. And Wall Street and the City have always cared more about money than any thing else … ” except for, perhaps, Moscow and Beijing? which, according to some sources, are said to be winning the ‘greatest wealth gap in the world’ contest.

‘East’ or ‘West’, what do the folks in academia, government and labour care about most?

just not sure where you’re going with this.

]]> By: bsetser http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94408 bsetser Thu, 25 Jan 2007 19:09:35 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94408 The big risk with agencies is prepayment -- not default. they have insurance against default from the agency ... and supposedly central banks are buyers only of the good, safe high rated tranches of private MBS ... The big risk with agencies is prepayment — not default. they have insurance against default from the agency … and supposedly central banks are buyers only of the good, safe high rated tranches of private MBS …

]]> By: Emmanuel http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94407 Emmanuel Thu, 25 Jan 2007 17:25:00 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94407 Thanks for that. With the ongoing housing Chernobyl, it's interesting that they're going into <a href="http://asia.news.yahoo.com/070125/3/2wdtm.html">agency debt</a> bigtime. I remember, you said it was "seeking alpha, foreign central bank style" or something to that effect. As always, caveat emptor--implicit US government backing or not, I'd be wary of these MBS "lovelies." Thanks for that. With the ongoing housing Chernobyl, it’s interesting that they’re going into agency debt bigtime. I remember, you said it was “seeking alpha, foreign central bank style” or something to that effect. As always, caveat emptor–implicit US government backing or not, I’d be wary of these MBS “lovelies.”

]]> By: bsetser http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94406 bsetser Thu, 25 Jan 2007 16:29:15 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94406 Emmanuel -- judging from the Fed's custodial data (a bad proxy, but the best we have), central banks have decidely shifted towards agencies over the past year. http://www.federalreserve.gov/Releases/h41/Current/ I also suspect that a few central banks have taken advantage of the dollar's mini rally to lighten up on some of the dollars they bought in q4. there were a couple of weeks then when it was back to 2004 all over again ... that said, i don't really see the advantage to a central bank of buying the long end of the treasury curve right now. you get more carry on the very short-end (and there are lots of short-term agency bills out there as well). and unless you think long rates are gonna fall from here, there isn't much advantage to locking in current rates. Emmanuel — judging from the Fed’s custodial data (a bad proxy, but the best we have), central banks have decidely shifted towards agencies over the past year.

http://www.federalreserve.gov/Releases/h41/Current/

I also suspect that a few central banks have taken advantage of the dollar’s mini rally to lighten up on some of the dollars they bought in q4. there were a couple of weeks then when it was back to 2004 all over again …

that said, i don’t really see the advantage to a central bank of buying the long end of the treasury curve right now. you get more carry on the very short-end (and there are lots of short-term agency bills out there as well). and unless you think long rates are gonna fall from here, there isn’t much advantage to locking in current rates.

]]> By: Emmanuel http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94405 Emmanuel Thu, 25 Jan 2007 14:04:18 +0000 http://blogs.cfr.org/setser/2007/01/25/sometimes-i-agree-with-dr-jen/#comment-94405 Higher bond rates helped spook the DJIA into a three-figure fall today. It seems <a href="http://quote.bloomberg.com/apps/news?pid=20601087&sid=at2fPRyhpmm4">official buyers</a> were in shorter supply than usual in today's 5-year note auction: <i>U.S. Treasuries fell, pushing yields to the highest level since August, as an industry report suggested the worst of the housing slump may be over and an auction of five-year notes drew lower-than-average demand. Indirect bidders, the class of investors that includes foreign central banks, bought 21.8 percent of the securities sold, compared with 48.8 percent in December.</i> If this trend holds up, we all know what that means: BW2 might be at last crumbling as those loaded foreign CBs recognize the raw deal they've been given all this time. BTW: Does anyone know where to get the number of "indirect bidders" (which includes official buyers) in Treasury auctions? I don't get this information from the <a href="http://wwws.publicdebt.treas.gov/AI/pdf/ofl0125071.pdf">auction results</a>. Higher bond rates helped spook the DJIA into a three-figure fall today. It seems official buyers were in shorter supply than usual in today’s 5-year note auction:

U.S. Treasuries fell, pushing yields to the highest level since August, as an industry report suggested the worst of the housing slump may be over and an auction of five-year notes drew lower-than-average demand.

Indirect bidders, the class of investors that includes foreign central banks, bought 21.8 percent of the securities sold, compared with 48.8 percent in December.

If this trend holds up, we all know what that means: BW2 might be at last crumbling as those loaded foreign CBs recognize the raw deal they’ve been given all this time.

BTW: Does anyone know where to get the number of “indirect bidders” (which includes official buyers) in Treasury auctions? I don’t get this information from the auction results.

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