Primates, you know, are made to be broken. Even when the existing ones appear to have science fiction. Or, rather, "fantafinanziari. No exception to the rule nor the bond market, a favorite place of unprecedented storm now affecting the sovereign bonds of all or most of the major economies of the planet.
In a surprise move, the U.S. Treasury Department was urged by his advisors to bring to market a product never seen before: Federal bond maturing in 2111. No, not a typo, we mean just "duemilacentoundici. Because, believe it or not, the idea is this: place a bond on the market in 100 years, a period that is twice that found today in the longer-term securities on the market.
The last, incredible move to restore oxygen to the public finances increasingly tortured Americans. To reveal the news was the Financial Times quoting the minutes of the last meeting of the Treasury Borrowing Advisory Committee, the inner council of the Department convened regularly every three months.
At the last meeting held on Monday, one of these would bring the proposal to the attention of participants, including officials from the Treasury and the Federal Reserve, and 13 veterans of the upper echelons of Wall Financial (eg Goldman Sachs, JPMorgan Chase, Morgan Stanley, RBS and Bank of America Securities and large investment companies such as Soros Fund Management, Moore Capital and Paul Tudor Jones II).
During a press conference Wednesday, the assistant Treasury secretary Mary Miller expressed skepticism about the proposal "centennial" assumption, however, the utility of the possible use of securities with very long maturities. The hypothesis of long-term bonds is based on the needs of the United States to extend the average maturity of public debt, which is still close to five years, seizing the favorable moment by low interest rates (which makes it convenient to borrow that is).
The move certainly seems to say the least. All the more so in the face of the open problems that such a placement would require: that money allocated to an investment that will be paid, at least in theory, only the heirs of the subscribers? How is it possible (if so) make a reliable estimate of a risk the country a hundred years? Unanswered questions, of course, that does not seem to upset investors, however, it is true, how could the committee suggested that the potential demand for long-term bonds (40, 50 or 100 springs) would be worth something like 2.4 trillion dollars of investment in next five years.
In the past the U.S. has issued more than thirty-year bonds. China, France and Britain have also placed securities maturing in 50 years. The news comes a few days later by the alarm launched by the rating agency Moody's, which, after careful accounts of the Americans, had declared itself ready to adjust downward the outlook of U.S.
debt. Growing for a decade now, the general state of Washington is now worth more than 14 trillion, more or less than the gross domestic product. Weigh the interests not just when you think that from 2007 to present their relationship to the GDP has increased by nearly nine times (from 1 to 8%, 8%), while exposure of foreign investors continues to be a risk national financial stability.
One aspect of the latter, which justifies the choice of so-called "ultra-long" bond. The hypothesis is that the bonds can be purchased more than a decade in particular in the domestic market thereby increasing the weight of the latter distribution to creditors. The U.S. debt, in fact, is now largely financed by foreign operators with the Chinese still have almost $ 900 billion of U.S.
securities (about 10% of the total trade in the market, 9,000 billion, or a little 'less than 2 / 3 of the total). A situation opposite to that which characterizes heavily indebted nations like Japan and Italy and yet, over the years have been particularly bad afford ratios (the ratio of debt to GDP exceeds 180% in Tokyo) because of their low exposure to foreign markets.
To date, to get an idea, only 5% of the shares of Japan, belongs to foreign investors. For the U.S. a goal unthinkable. At least for now. 
In a surprise move, the U.S. Treasury Department was urged by his advisors to bring to market a product never seen before: Federal bond maturing in 2111. No, not a typo, we mean just "duemilacentoundici. Because, believe it or not, the idea is this: place a bond on the market in 100 years, a period that is twice that found today in the longer-term securities on the market.
The last, incredible move to restore oxygen to the public finances increasingly tortured Americans. To reveal the news was the Financial Times quoting the minutes of the last meeting of the Treasury Borrowing Advisory Committee, the inner council of the Department convened regularly every three months.
At the last meeting held on Monday, one of these would bring the proposal to the attention of participants, including officials from the Treasury and the Federal Reserve, and 13 veterans of the upper echelons of Wall Financial (eg Goldman Sachs, JPMorgan Chase, Morgan Stanley, RBS and Bank of America Securities and large investment companies such as Soros Fund Management, Moore Capital and Paul Tudor Jones II).
During a press conference Wednesday, the assistant Treasury secretary Mary Miller expressed skepticism about the proposal "centennial" assumption, however, the utility of the possible use of securities with very long maturities. The hypothesis of long-term bonds is based on the needs of the United States to extend the average maturity of public debt, which is still close to five years, seizing the favorable moment by low interest rates (which makes it convenient to borrow that is).
The move certainly seems to say the least. All the more so in the face of the open problems that such a placement would require: that money allocated to an investment that will be paid, at least in theory, only the heirs of the subscribers? How is it possible (if so) make a reliable estimate of a risk the country a hundred years? Unanswered questions, of course, that does not seem to upset investors, however, it is true, how could the committee suggested that the potential demand for long-term bonds (40, 50 or 100 springs) would be worth something like 2.4 trillion dollars of investment in next five years.
In the past the U.S. has issued more than thirty-year bonds. China, France and Britain have also placed securities maturing in 50 years. The news comes a few days later by the alarm launched by the rating agency Moody's, which, after careful accounts of the Americans, had declared itself ready to adjust downward the outlook of U.S.
debt. Growing for a decade now, the general state of Washington is now worth more than 14 trillion, more or less than the gross domestic product. Weigh the interests not just when you think that from 2007 to present their relationship to the GDP has increased by nearly nine times (from 1 to 8%, 8%), while exposure of foreign investors continues to be a risk national financial stability.
One aspect of the latter, which justifies the choice of so-called "ultra-long" bond. The hypothesis is that the bonds can be purchased more than a decade in particular in the domestic market thereby increasing the weight of the latter distribution to creditors. The U.S. debt, in fact, is now largely financed by foreign operators with the Chinese still have almost $ 900 billion of U.S.
securities (about 10% of the total trade in the market, 9,000 billion, or a little 'less than 2 / 3 of the total). A situation opposite to that which characterizes heavily indebted nations like Japan and Italy and yet, over the years have been particularly bad afford ratios (the ratio of debt to GDP exceeds 180% in Tokyo) because of their low exposure to foreign markets.
To date, to get an idea, only 5% of the shares of Japan, belongs to foreign investors. For the U.S. a goal unthinkable. At least for now.
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