Bloomberg: The public sector of the Western economy is moving to the state of 1949

Bloomberg experts in their article analyze the state of the Western financial market. We are talking about the state segment of this market, where problems with bonds are growing against the backdrop of high inflation.

Bloomberg:

We are entering the worst state market since 1949. The collapse of government bonds in the West continues, it goes one week after another. And there is no end in sight for this.

The authors of a major publication write that the Fed has never raised the base rate by 75 points three times in a row in recent decades. Now the range of the base rate in the US has reached the level of 3-3,25%, which makes it pointless to invest in US government debt for the reason that bonds do not bring such income.

The material of a major American publication says that the Fed intends to further increase the key rate, bringing it to at least 4,5 percent.

From the article:

Even if it causes huge damage to the economy, they intend to do it.

Against this background, a record fall in the 5-year bond market in Britain for 30 years is reported. This is connected with the promises of the Truss government to introduce tax breaks.

From the material:

The state of the public sector of the Western economy is such that it comes to a state identical to 1949, when Europe was just beginning to recover from the ruins of World War II.

The authors write that the situation has now become such that any step by the banking regulator to raise the base rate leads to a further decline in the economies of large Western countries.

Comments

[Quote Lavrov]

The state of the public sector of the Western economy is such that it comes to a state identical to 1949

It is not entirely clear what is at stake. There was no nationalization of the economy in the West - then, in honor of which, the speech in the last paragraph went specifically about the public sector.
Most likely, we are still talking about government borrowing, and not about the public sector. And then the article itself and the last paragraph are absolutely not interconnected.
Judging by the growth of bond yields in the market, the demand for them is only growing. Apparently, either the US itself and through satellites like Japan are trying to hold the market, or the market itself sees these securities as a relatively stable instrument.

[Drotro]

Good morning.
Yesterday on Biznes-FM they said that the nationalization of some enterprises had begun in Germany. I listened a bit. But as far as I understand, they have not had this for a long time. And this is due to the fact that the state is forced to provide support to organizations that cannot stay afloat without it. So far, they have definitely nationalized the energy company Uniper.
Подробнее на РБК: https://www.rbc.ru/business/21/09/2022/632abf9c9a79478663122ea4?ysclid=l8iaeogjrv633346583.

There will be more, as they said on the radio. According to analysts' forecasts, other firms will turn to the German government for help.

What is good about Business-FM is that there is not much propaganda there. Usually everything is presented dryly. White is white, black is black.

[Quote Lavrov]

It was and not so long ago. On the example of the United States - the crisis of investment banks. The state first buys a business or part of it, and then sells it. Surely they heard about us as the Central Bank is carrying out the reorganization of commercial banks - this is about the same thing.
Then I wonder why Bloomberg refers to 1949 - in France, this process took place much later.

[9PA]

Bond yields rise as inflation rises and demand for these bonds falls. How to attract a buyer of bonds if their yield is below inflation? It is necessary in Japan for inflation to increase strongly

[Quote Lavrov]

When demand falls, bond yields rise.
Perhaps you mean that the issuer increases the yield on new bond issues and this already stimulates demand? But this is different.

[9PA]

Do you have the most demanded bonds with the best yield? Why American treasuries with a minimum yield are the most in demand. And nobody needs junk-rated bonds with a yield of more than 20 percent?

[Quote Lavrov]

I write about this in the very initial post. It is a question of the cost of risk of an investment. Conditional American bonds at 1.4% will definitely return your investments, and the same Ukrainian ones at least at 100% - it’s not a fact that you will get at least something back.

[9PA]

Well, history has shown that there is nothing “for sure” in this world. The cost of servicing loans is growing rapidly, but the main intrigue is Japan with its super-soft monetary policy, large industrial sector and constant acquisitions of Amer's public debt.

[Zaits]

When demand falls, bond yields rise?
"

So, the discount has not yet been canceled.
The higher the base rate and the lower the demand, the greater the discount.

[Olga]

This profitability still needs to be secured and maintained.
Multiply the growth by 0,25% by the bond amounts. And these are real payments. To print more banknotes means to accelerate inflation. They are now like a squirrel in a wheel.
Option - reducing investment is also not an option

[9PA]

Option cycle of high stakes and strict monetary policy

[Olga]

Stagnation is inevitable here, at least. Afraid to fall behind.
Yes, and they have already chosen a different path - to fight to the last Ukrainian

[Quote Lavrov]

But there is one caveat. US GDP. It is huge. And all their debt is less than 1.5 of their GDP. In the same Japan - 2.3.
So until the dollar-financial system itself collapses, this debt will not be so critical for the US. Negative - definitely

[9PA]

Comrade reality is much worse, the US national debt is already greater than their GDP, and in Japan by 1.5-2 times. The world requires a new paradigm

[Olga]

US national debt is already greater than their GDP

And, if we add to this that their GDP is formed mainly by services (well, for example, they love lawyers), and not by the real sector...

[9PA]

IT sector is services? Is the financial sector services? Biopharm? USA is the leader of progress

[Olga]

The question is the real value of such assets. For an investor.
They draw ratings for themselves, respectively, NPV for companies is also "drawn"

[9PA]

What is more expensive than Microsoft or Rosneft in real terms?

[Olga]

You are trying to get boxers from different weight categories into the ring and thus show the winner.
All these ratings work well in a peaceful, stable, non-crisis period.
As soon as food, financial, energy crises emerge, it turns out that raw materials suppliers (and companies) not only show excellent dynamics, but become strategically necessary. We are considering the issue not so much about companies as about the prospects of countries (this is closer to the topic of the article).
I agree about IT, here we are sooo behind. This affects the course of the SVO.

Quote: 9PA

USA is the leader of progress

Even in supersonic?

[9PA]

I recently read one article, what is the superiority of the West over its colonies (the developing world): the high quality of the human resource, high technology and the availability of funding. This is the foundation of paxamerican

[Olga]

Foundations sometimes collapse under the influence of factors.
Resting on our laurels is not the best choice.
This is not progress. This is a vacuum cleaner.
But have you ever wondered why, having such a wonderful foundation, the United States is pursuing a policy of containment?!

Catastrophically there is no time, otherwise I would argue with you on the topic of the American world.

[9PA]

The policy of containment, I think this is a normal logical action aimed at maintaining its dominant position. In one I agree with GDP, if not now then never. We are catastrophically behind.

[Negruz]

What is more expensive than Microsoft or Rosneft in real terms?

You better think: when you need to survive, do you go to Rosneft or to Microsoft?

[9PA]

Well, kagbe high technologies have penetrated as much as possible into all spheres of life. And when will it be necessary to discover complex deposits, where to get technologies?

[Negruz]

Am I asking a difficult question? Did you word it incomprehensibly?

[9PA]

Urya I don't like to shout, I want to say that the world has changed hi-tech is the future. And now it is impossible to say unequivocally what is more important resource extraction or IT

[Negruz]

Did I ask something about the "future" or about "more important"?

[Luminman]

Quote: Quote Lavrov

There was no nationalization of the economy in the West

Slightly more than a third of the economy of France and Italy belongs to the state. There are state-owned enterprises in Britain and the Scandinavian countries. In Germany, they are trying to bring the energy sector under state control ...

Quote: Quote Lavrov

When demand falls, bond yields rise.

The government is raising interest rates to keep bondholders from fleeing. You're confusing stocks...

[Stas157]

Quote: Quote Lavrov

It is not entirely clear what is at stake.

Around this time (1944), the United States, taking advantage of the predicament of countries (WW2), imposed its Breton Woods system, in which base currency dollar became. Now, I understand, this system is starting to burst at the seams.

[Johnson Smithson]

Judging by the growth of bond yields in the market, the demand for them is only growing.

do not confuse the price of a bond with its yield,
bond yields are growing just at low demand, they increase payments in order to sell them anyway,
reliable government bonds with good demand have low yields

[Negruz]

Judging by the growth of bond yields in the market, the demand for them is only growing.

On the contrary: rising bond yields indicate that investors do not want to invest in them and are attracted by higher rates....

This is the reverse "pole" of the basic "risk / return" investment formula, which are directly proportional ....

[Conjurer]

Judging by the growth of bond yields in the market, the demand for them is only growing.

The growth of bond yields is a forced, with tears in the eyes, measure of their imitator, in this case, the US government. Who in their right mind would just increase the income of buyers and their debt service costs for no reason? This means that there is a serious reason for this, or a fear of the manifestation of this reason, i.e. preventive actions. Do you know what is the reason?
The Fed's actions to curb inflation are more like robbing the US population in favor of the bankers who own the Fed. An increase in the rate at such a level of public debt will lead to an increase in the budget deficit, respectively, to a reduction in state support programs and an increase in borrowing. That is, the US state is more and more hooked on its bankers and is collecting more and more money from its citizens in their favor (you need to give back the national debt) .

[smart ass]

For a long time there was a program “however” in it, the clown alone in each new series for 10 years talked about the US national debt and how it is about to bend down)))

[tralflot1832]

Bullshit!!! Everything is normal in the USA, the investor-speculator is fleeing to the states, the birds are already sparkling. I have been saying for a long time that Europe will pay for the country. It’s good that it has self-isolated. Do they need to be on the front lines, analysts? I am not against such a "mistake" by the military commissars.

[rocket757]

Everything is fine and calm, maybe the winner in the big political / economic game will have it! And while everything is very different ...
So many different forecasts, opinions, choose for every taste.
What else ... to predict the logic of the actions of some serious figures, important political groups that can influence current events ..... well, you can’t see it from the sofa !!!

[tralflot1832]

It’s still visible from the sofa, but as soon as chaos begins, which they are trying to unleash for any reason, and we ourselves give a reason, will the authorities have enough strength to pass such an exam as it should. We need to deal with our media. they say. For a word incorrectly said, they are now clinging.

[rocket757]

We have problems above the roof ... to deal with, fix, there is a lot of things.
Just isolate yourself and deal with your own problems ... probably it won’t work out, it’s too much now everything is intertwined, interdependent.
So, rocking your boat, this is not right at all now, BUT ... I really want to express my most correct living opinion! Can't hold on.
Although, there is also enough constructive criticism, but whoever listens to it and shakes it off, it’s impossible to understand, alas.
The state is large, inert and ... everything takes time, in addition to everything else, other things.

[Reptiloid]

Quote: tralflot1832

.... as soon as chaos begins, which they are trying to unleash for any reason, and we ourselves give a reason, will the authorities have enough strength to pass such an exam as it should. We need to deal with our media .....

SVO is coming. And not earlier than later, the official decided to feed on larvae. Well, let him eat with his family and shoot on video ..... but why offer people.
He conceived new productions similar to develop. Right now. Ugh.

[Reptiloid]

Quote: rocket757

... the logic of the actions of some serious figures, important political groups that can .... well, you can’t see it from the sofa !!!

The logic is not visible from the couch, Victor, but there are results, but not everyone guesses.
For example, the head of the Russian Ministry of Industry and Trade said a week ago that if the Russians change their mentality, then it is quite possible to use fly larvae instead of meat for food. What for? If Putin said that everything is fine with us with meat, but Manturov wants the larvae of dung flies to “come in.” How is that? A step towards globalist ideas? If in Europe there is a shortage of energy and a reduction in production, then in our food industry there is no need to replace meat with dung fly larvae. Where does he plan to take these pseudo-meat producers? Because of the bump? And what about their meat?

[rocket757]

Perhaps the GDP will have to expand the list of those of his subordinates who are not known what ...
It won’t be so unexpected, balabol and show their nonsense, many began ... alas, alas, the picture is so-so, not inspiring.

[Reptiloid]

Yes, the list will have to be expanded without fail. What is the calculation for? Everyone is busy with SVO, referendums .... but what will it be?
To feed the Russians with an abomination, and even re-educate them, let them educate their children. Moreover, they say, the Russians want to eat plant foods. But flies are not plants, not fruits and not vegetables! Flies are the army of Beelzebub!
Well, if according to science, then this is the symbolism. A fly (both housefly, and dung, and cadaveric) cannot itself grow from a larva and become an adult! Her body cannot produce growth hormone! Therefore, she eats what everyone knows.
I remember that the American science fiction writer Paul Anderson, in the story "Evelit's Retribution" from the History of the Future, wrote about a planet where people (descendants of earthlings) as a result of a mutation lost the ability to produce growth hormone themselves, and since almost all animals and plants were poisonous to people have succumbed to cannibalism.
The official said, like, change the mentality. First, it turns out, we will switch to larvae, and then where? To cannibalism? Or to what serves as food for the larvae of flies?
Why am I writing this. So that the Russians do not let themselves be deceived --- to please the globalists. After all, this food is just according to Schwab's theory!

[rocket757]

Quote: Reptiloid

.What is the calculation?

So there were always enough tricks of all sorts ... to climb to the top and strengthen there, this also needs to have excessive flexibility.
In general, I won’t say anything good, but wee wee is forbidden.

[Reptiloid]

At the same time, there are such words of followers

.... you need to come up with a story related to healthy lifestyles ...

OR something else

.... make it look like minced meat from vegetable meat

[rocket757]

Let's not spoil our taste...
Themselves, let them eat all sorts of ... different things, but we will use the old fashioned way, natural products.

[Reptiloid]

Quote: rocket757

..... and we are the old fashioned way .....

There, somewhere, it was also that the Magnit chain of stores increased the number of plant products by ~ 7 ~ 10%. This means that there are more and more sausages, sausages, which only APPEAR meat... Do people know WHAT they eat? In general, in Russia, vegetable and cereal dishes have always been prepared --- because they appeared long before potatoes. But now the situation is completely different, when sausage can be WITHOUT MEAT. Thus, Denis Manturov, says ---

....we keep pace ...... with those directions ...... in the World ...... vegetable raw materials instead of animal protein ......

He also said that the state should support this mess with soft loans. The Ministry of Agriculture and other federal agencies must support this. because

mentality change

--- this is not enough.

[rocket757]

At all times, the buyer was heading with his FEET!
I do not like this shop, the goods in it, go to another.

[Reptiloid]

Have a nice day Victor

Quote: rocket757

.....
I do not like this shop, the goods in it, go to another.

But, no matter what they go and come up with all sorts of enticements, or even just a hoax.

[rocket757]

Good morning, Dmitriy
A man’s head and Jean, so as not to fall for deception, in a beautiful wrapper!
Not everyone knows how to do this, the main thing is that the general tendency for sanity to be preserved among the majority of our people.

[Scientist_]

Quote: Quote Lavrov

When demand falls, bond yields rise.
Perhaps you mean that the issuer increases the yield on new bond issues and this already stimulates demand? But this is different.

The yield of bonds is calculated not from the face value, but from the current market price. When demand falls, so does the price, but coupon payments and redemption remain the same, so yields rise.

[Olga]

The yield on ordinary government bonds is so low that it often barely covers inflation and does not allow the accumulation of significant capital. However, among Treasury bonds there are TIPS - Treasury Inflation Protected Securities. These papers include inflation protection. Coupon payments are fixed not by a certain amount, but by a percentage. The face value of the paper also changes depending on the consumer price index. Accordingly, with the growth of consumer prices, the face value of the bond and the coupon yield increase.

[aszzz888]

Bloomberg: The public sector of the Western economy is moving to the state of 1949

As soon as it passes "to the state" of 1897, then it will have hooves, and they will fall off on their own!

[arbitr459gmail.com]

Let's carry out the Morgenthau plan, turn Europe into a potato field!

[dementor873]

Their defense industry is now fully untwisted on the military orders of Europe after the supply of rubbish to the outskirts and the ghost of the great and terrible Russia. So Marshall 2 and they are in chocolate.