There were ads on TV this week about how "cutting" Medicaid would mean you couldn't send your elderly parent or relative to a nursing home. Not sure if it was Dems or Repubs who ran that. Whatever happened to people paying their own way? Everyone wants the govt to pay the nursing home bill and that is not sustainable. Then Susan Collins and others vote to let illegals have Medicaid! There won't be a solution until these programs are stopped. I don't remember any of this when I was young, my relatives paid their own nursing home bills.
David Stockman wrote a book that came out in January 20 24 on Trump in his first term and what it happened since.
The shocking fact was that Trump and Biden added $16 trillion to the national debt in eight years. Let that sink in. At the Pace we are going now. Trump could easily add another $8 trillion. so in 12 years we would’ve added $24 trillion to the national debt between two presidents.
Every president in the 21st century, starting with George W. Bush have collectively bankrupted this country financially with their foreign wars, no budget whatsoever and nothing but deficit spending compounded annually.
What little I have read of this current reconciliation, Bill is nothing but a disaster .
What has happened to the House of Representatives derelict in their duty to create a budget, a detailed budget so that it could be debated on for the country to see.
Not what we have evolved to with these absurd and obscene reconciliation bills that are running 900 pages or more packed with all manner of bad legislation to the point that nobody knows exactly what they are voting on.
This bill is an abomination just like all the previous reconciliation bills and should be vetoed, and Congress made to go back to the table and come up with a budget for everyone to see .
The simple truth is healthcare. Spending has to be cut specifically Medicaid spending.
The defense budget literally needs to be cut in half and we need to close at least 400 overseas military bases that we don’t need . We no longer can afford all of this.
Finally, we have to find a way to face the national debt and find a way to start paying it down or we are going to end up defaulting on that debt either partially or totally because we will no longer be able to even afford paying the interest on the debt Which is exactly the reason Trump wants an interest rate cut.
I think what may end up happening as the de dollarization spreads is we will become like Japan. The Bank of Japan has become the market they buy stocks Bonds whatever.
Can that happen here with the federal reserve will that be the final act of our downfall the fed reserve buying our own debt that they are helping to create and expanding their balance sheet to the moon and back . Those are the real serious questions.
Very good comment. There is a reason the Dollar keeps going down and Gold keeps going up. And lo and behold that happened again in direct response to the passage of the BBB in the Senate, even when its prospects of the reconciliation bill passing the House remains in great question.
Trump will add $8T if there is not a recession during his term. He will own the results of his BBB, which will do nothing to slow spending or debt accumulation.
Putting on my tin foil hat . . . does anyone find it . . . interesting that BBB was also used by the Biden team in 2020? It's almost like Trump is proclaiming his alignment with whatever powers that ran the show during Biden's term . . . or maybe I'm just hallucinating.
On the repos piece, the basic explanation that I got from my sister (a NYC-based reporter on bonds and treasuries for the last 3-4 decades) when this happened last fall was roughly this:
Repo purchases by the Fed are a routine liquidity function targeted at rate (particularly, the federal funds rate) stabilization. Tide of cash goes out to the big banks temporarily offloading their securities, tide comes back in to Fed when they're repo'd by big banks. Quarter-end spike purchases by the Fed, however, are clear signs of market disfunction. Apparently, there is unusually scattershot demand across varying repo-market sectors, meaning there are now too few market players to intermediate between the excessively-liquid dealers and the bone-dry ones. Hypersensitivity to market events is now the order of the day.
Dealers are leery of expanding balance sheets as of FQ or FY end because that results in higher leverage changes and/or additional required capital, so the Fed is, effectively, swooping in to rescue them and muffle the screams of a fundamentally-misaligned market. The theory is that basis trades, taking advantage of what is an unusually-variable difference between treasuries and futures, are driving all this need to cover.
The underlying theme is that our entire economy, through hyper-financialization and Fed/regulatory tinkering in favor of the financial behemoths, is no longer functioning per market principles as understood by economists and bankers for ages. No longer responsive to the usual levers, rules or corrections. Essentially, everything is really broken, probably beyond repair.
Musk nailed it: "What good is Doge saving $160B when this bill increases the debt ceiling by $5T? It makes mockery of the work." The BBB is like my supper this evening: pure pork
Trump is threatening Musk again. He will sic DOGE on Musk, who has at least created some wealth in this country. What’s Trump done? Serial bankruptcies on his real estate to gain more favorable terms and selling meme coins and now hawking $249 fragrances.
Trump’s also threatened Musk with deportation back to South Africa. Musk is a naturalized citizen, just as Trump’s wife Melania is.
The passage of the modified BBB by the Senate Rs should demonstrate to everyone that we aren’t voting our way out of this mess. With Rs or Ds the results are the same - more debt and more war and less freedom.
Thank you for your informative posts. I forward most of them to my email contacts and, occasionally, fakebook. I have a question that I hope you can shine some light on. If a trillion is in the military budget for '26 do they have to actually spend all of it, or could they simply spend alot less and have a large surplus at year end? I'm hoping...
Sorry, it'll almost certainly be much, much more. Michael Hudson was saying that the budget number is just the beginning, that "aid" to foreign countries jacks it way up. We "lend" the money for the purchases, but the loans never get paid back. Just today Trump authorized an emergency "sale" of $500M in JDAMS to Israel. There is no way that Israel will pay for that now or ever. And that goes for the many, many billions we are continuing to expend over there.
some of the repo spike was due to the usual month/quarter end pressures. banks have to do a bunch of potemkin villaging to ensure the balance sheets pass regulatory capital requirements. The usual bullsh*t in other words. just more of it.
I’m sorta amazing at the brazenness with which the Zios are revealing their power over “american” politicians. And the fervor with which GOP types assure one and all they are “standing with Israel”. But I do think people are starting to wonder about this relationship.
""""The bottom line I continue to see is that MAGA means propping up the Anglo-Zionist Empire by squeezing the rest of the world to pay down our debts. """"
and to pay down Israel's war debt
I am pretty confident Netanyahu is here to shake some hands and pick up a check
someone has to come up with 16 Billion to pay off just the damages from the Iranian missiles
another 200 Billion would be a nice float to get them through the end of the year.
some of the repo spike was due to the usual month/quarter end pressures. banks have to do a bunch of potemkin villaging to ensure the balance sheets pass regulatory capital requirements. The usual bullsh*t in other words. just more of it.
I’m sorta amazing at the brazenness with which the Zios are revealing their power over “american” politicians. And the fervor with which GOP types assure one and all they are “standing with Israel”. But I do think people are starting to wonder about this relationship.
Yes, the stress test results just came out June 27th. Large banks are well positioned to weather a severe recession. The question would be how well positioned are the regional and smaller banks.
Then again, they are looking at reducing the Supplementary Leverage Ratio, which cuts capital requirements. I wouldn't do that until after the next recession. Next time, there might be bail-ins to bail-out the banks.
I’m not sure. I bailed from wall street a few years back so not sure if they are still required but pretty sure they are. It emerged after the GFC. banks are required to maintain certain levels of risk-free capital (this is a consequence of fractional reserve banking). It’s honestly bullshit. All it did was make the big banks even bigger, and it’s not like Uncle Sam would refuse to bail them out again.
And how, I ask, did it happen that the average credit card APR is nearly 30% when “american” companies can borrow in the investment grade bond market for 4%? that’s why the church banned usury. it’s vile, like everything else.
There were ads on TV this week about how "cutting" Medicaid would mean you couldn't send your elderly parent or relative to a nursing home. Not sure if it was Dems or Repubs who ran that. Whatever happened to people paying their own way? Everyone wants the govt to pay the nursing home bill and that is not sustainable. Then Susan Collins and others vote to let illegals have Medicaid! There won't be a solution until these programs are stopped. I don't remember any of this when I was young, my relatives paid their own nursing home bills.
I'm 100% certain the Democrats or PACs that support them ran those ads. Remember the Paul Ryan look alike pushing granny over the cliff?
David Stockman wrote a book that came out in January 20 24 on Trump in his first term and what it happened since.
The shocking fact was that Trump and Biden added $16 trillion to the national debt in eight years. Let that sink in. At the Pace we are going now. Trump could easily add another $8 trillion. so in 12 years we would’ve added $24 trillion to the national debt between two presidents.
Every president in the 21st century, starting with George W. Bush have collectively bankrupted this country financially with their foreign wars, no budget whatsoever and nothing but deficit spending compounded annually.
What little I have read of this current reconciliation, Bill is nothing but a disaster .
What has happened to the House of Representatives derelict in their duty to create a budget, a detailed budget so that it could be debated on for the country to see.
Not what we have evolved to with these absurd and obscene reconciliation bills that are running 900 pages or more packed with all manner of bad legislation to the point that nobody knows exactly what they are voting on.
This bill is an abomination just like all the previous reconciliation bills and should be vetoed, and Congress made to go back to the table and come up with a budget for everyone to see .
The simple truth is healthcare. Spending has to be cut specifically Medicaid spending.
The defense budget literally needs to be cut in half and we need to close at least 400 overseas military bases that we don’t need . We no longer can afford all of this.
Finally, we have to find a way to face the national debt and find a way to start paying it down or we are going to end up defaulting on that debt either partially or totally because we will no longer be able to even afford paying the interest on the debt Which is exactly the reason Trump wants an interest rate cut.
I think what may end up happening as the de dollarization spreads is we will become like Japan. The Bank of Japan has become the market they buy stocks Bonds whatever.
Can that happen here with the federal reserve will that be the final act of our downfall the fed reserve buying our own debt that they are helping to create and expanding their balance sheet to the moon and back . Those are the real serious questions.
Very good comment. There is a reason the Dollar keeps going down and Gold keeps going up. And lo and behold that happened again in direct response to the passage of the BBB in the Senate, even when its prospects of the reconciliation bill passing the House remains in great question.
Trump will add $8T if there is not a recession during his term. He will own the results of his BBB, which will do nothing to slow spending or debt accumulation.
"Those are the real serious questions."
Serious questions only get serious answers in a serious country. I'm afraid we're past that.
Putting on my tin foil hat . . . does anyone find it . . . interesting that BBB was also used by the Biden team in 2020? It's almost like Trump is proclaiming his alignment with whatever powers that ran the show during Biden's term . . . or maybe I'm just hallucinating.
On the repos piece, the basic explanation that I got from my sister (a NYC-based reporter on bonds and treasuries for the last 3-4 decades) when this happened last fall was roughly this:
Repo purchases by the Fed are a routine liquidity function targeted at rate (particularly, the federal funds rate) stabilization. Tide of cash goes out to the big banks temporarily offloading their securities, tide comes back in to Fed when they're repo'd by big banks. Quarter-end spike purchases by the Fed, however, are clear signs of market disfunction. Apparently, there is unusually scattershot demand across varying repo-market sectors, meaning there are now too few market players to intermediate between the excessively-liquid dealers and the bone-dry ones. Hypersensitivity to market events is now the order of the day.
Dealers are leery of expanding balance sheets as of FQ or FY end because that results in higher leverage changes and/or additional required capital, so the Fed is, effectively, swooping in to rescue them and muffle the screams of a fundamentally-misaligned market. The theory is that basis trades, taking advantage of what is an unusually-variable difference between treasuries and futures, are driving all this need to cover.
The underlying theme is that our entire economy, through hyper-financialization and Fed/regulatory tinkering in favor of the financial behemoths, is no longer functioning per market principles as understood by economists and bankers for ages. No longer responsive to the usual levers, rules or corrections. Essentially, everything is really broken, probably beyond repair.
Thanks very much!
Musk nailed it: "What good is Doge saving $160B when this bill increases the debt ceiling by $5T? It makes mockery of the work." The BBB is like my supper this evening: pure pork
"The Big Beautiful Bill should be called the BBB Act because that’s what the US Credit Rating will be in a few years."
https://x.com/AndrewYang/status/1930330139637813492
I don't give it that long.
Trump is threatening Musk again. He will sic DOGE on Musk, who has at least created some wealth in this country. What’s Trump done? Serial bankruptcies on his real estate to gain more favorable terms and selling meme coins and now hawking $249 fragrances.
Trump’s also threatened Musk with deportation back to South Africa. Musk is a naturalized citizen, just as Trump’s wife Melania is.
Crickets from the MAGAtards.
The passage of the modified BBB by the Senate Rs should demonstrate to everyone that we aren’t voting our way out of this mess. With Rs or Ds the results are the same - more debt and more war and less freedom.
Thank you for your informative posts. I forward most of them to my email contacts and, occasionally, fakebook. I have a question that I hope you can shine some light on. If a trillion is in the military budget for '26 do they have to actually spend all of it, or could they simply spend alot less and have a large surplus at year end? I'm hoping...
Sorry, it'll almost certainly be much, much more. Michael Hudson was saying that the budget number is just the beginning, that "aid" to foreign countries jacks it way up. We "lend" the money for the purchases, but the loans never get paid back. Just today Trump authorized an emergency "sale" of $500M in JDAMS to Israel. There is no way that Israel will pay for that now or ever. And that goes for the many, many billions we are continuing to expend over there.
That’s not enough to fight Iran again, but it may be enough to finish off what’s left of Gaza.
some of the repo spike was due to the usual month/quarter end pressures. banks have to do a bunch of potemkin villaging to ensure the balance sheets pass regulatory capital requirements. The usual bullsh*t in other words. just more of it.
I’m sorta amazing at the brazenness with which the Zios are revealing their power over “american” politicians. And the fervor with which GOP types assure one and all they are “standing with Israel”. But I do think people are starting to wonder about this relationship.
Mark I really appreciate your work. Thank you from South Africa.
Thanks! Small world. Or so it sometimes seems.
.
""""The bottom line I continue to see is that MAGA means propping up the Anglo-Zionist Empire by squeezing the rest of the world to pay down our debts. """"
and to pay down Israel's war debt
I am pretty confident Netanyahu is here to shake some hands and pick up a check
someone has to come up with 16 Billion to pay off just the damages from the Iranian missiles
another 200 Billion would be a nice float to get them through the end of the year.
.
some of the repo spike was due to the usual month/quarter end pressures. banks have to do a bunch of potemkin villaging to ensure the balance sheets pass regulatory capital requirements. The usual bullsh*t in other words. just more of it.
I’m sorta amazing at the brazenness with which the Zios are revealing their power over “american” politicians. And the fervor with which GOP types assure one and all they are “standing with Israel”. But I do think people are starting to wonder about this relationship.
Wasn’t there some sort of “stress test” on the big banks just recently as well?
Yes, the stress test results just came out June 27th. Large banks are well positioned to weather a severe recession. The question would be how well positioned are the regional and smaller banks.
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250627b.htm
Then again, they are looking at reducing the Supplementary Leverage Ratio, which cuts capital requirements. I wouldn't do that until after the next recession. Next time, there might be bail-ins to bail-out the banks.
https://www.reuters.com/business/finance/us-poised-cut-capital-requirements-banks-ft-reports-2025-05-15/
I’m not sure. I bailed from wall street a few years back so not sure if they are still required but pretty sure they are. It emerged after the GFC. banks are required to maintain certain levels of risk-free capital (this is a consequence of fractional reserve banking). It’s honestly bullshit. All it did was make the big banks even bigger, and it’s not like Uncle Sam would refuse to bail them out again.
And how, I ask, did it happen that the average credit card APR is nearly 30% when “american” companies can borrow in the investment grade bond market for 4%? that’s why the church banned usury. it’s vile, like everything else.