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Danish pension operator AkademikerPension said it is exiting U.S. Treasurys because of finance concerns as Denmark spars with President Donald Trump over his threats to take over Greenland.
Oooof. They no longer trust the US government to be a safe or friendly place to keep their money.
Let the ripple effect begin!
That's what this is, a shot across the bow. 100mm is nothing
Seriously, that’s only 10cm.
I think 10cm is plenty, more than enough, maybe even too big
We've been over this. It's how you use it that matters.
0.1m
How much is that in ~~freedom~~ fascism units?
I switched my retirement portfolio bond allocations into precious metal indexes last year in anticipation for something like this. It turned into my best performing asset.
I will also be selling my treasuries, I won't tell the exact amount but it's "slightly" less than 100 million.
I actually rebalanced my 401k tonight and dumped all my bond holdings and most domestic stocks just an hour or so ago. (I did keep the index funds, though.)
Swapping most of the allocations over to foreign stocks (showing about 35% yearly returns, vs the still good 14% I was netting before). I also threw a small chunk into a gold commodity index fund, which is showing 150% growth in the last year. Risky, but what am I going to do? Live long enough to grow old? In this economy?
98 million?
I was expecting the AI bubble to burst and then take down the US economy, but perhaps it's going to be the other way around..
Might be smart to dump any US bonds before the US economy ultimately crashes when the bubble bursts...
Eh, fuck it. We're all goddamn poor anyway.
It's true the wealthy that cause these problems probably won't be impacted, though...
But hey, I hope I'm wrong.
Wouldn't surprise me if the Norwegian pension fund is looking into the same. They do, however, work slow. We'll see if Jonas Gahr Støre continues to receive the stupidest spam imaginable.
They are right to do so. But also, this is a market measured in trillions
The fact that someone stood up and said “we do not trust the honor of the US to fulfill a debt” is important. We’ll see how much of an impact that actually has, but my kneejerk reaction is that it was meaningful.
my kneejerk reaction
:-/
The global market will pounce on $100M in underpriced Treasuries.
A better question is what the Danes plan to replace the reserves with. Now would be a cool time to roll out EuroBonds.
That said...
Schelde chiefly cited the ballooning debt bill facing the U.S. after decades of government overspending.
This is, has, and will continue to be a dumb reason to sell US Treasuries. The Bond Vigilantes always lose their shirts in the end.
Do you assume that a collapse of the US economy is impossible?
It's highly unlikely under current conditions
What conditions would be needed to make it likely?
Not OP, but first and foremost, on this bond thing, countries are going to have to be willing to take a beating in their own economies.
Selling off bonds is like Elon selling off Tesla. The worth/wealth disappears if the market is flooded with paper.
Another condition is in our face: The Buffett Index, which is total stock market value vs. GDP. We topped 200% for the first time a couple of weeks ago. It was around 130% in 1929 and 2008. Most of that bullshit money is in AI. We got real problems.
Quite a few. But, just for starters, you'd need the Federal Reserve to turn off the unlimited money spigot.
I don't think that needs to happen, if you get into a hyperinflation situation, right? And Trump and co have been doing a lot to destroy the underlying productivity of the us economy over the last year.
you get into a hyperinflation situation, right?
You need a sharp drop in available commodities, services, and investments to achieve hyperinflation. It's a phenomenon mostly confined to countries trapped under sanctions or trading in very low volume circulation currency.
The US petrodollar balances supply of money against supply of oil (and other major benchmarks - US real estate, US financial debts, etc). This guarantees a strong global demand for dollars, even (perhaps especially, with respect to debt) during downturns.
And Trump and co have been doing a lot to destroy the underlying productivity of the us economy over the last year.
He's been undermining the global trade economy. But it's a big rock and even the President only has a small hammer.
What has historically triggered big contractions in the US economy has been large scale debt defaults - '20 COVID induced oil price shock, '14 government shutdown, '08 Lehman/AIG massive fraud, '01 Enron/Worldcomm fraud, '87 S&L fraud + oil price shock, etc - all resulted in industry wide credit failures on the order of hundreds of billions of dollars.
What rapidly ended these rescissions was direct intervention by the federal reserve, flooding the financial sector with money and devaluing all that bad debt.
Trump's a dummy, but he knows this One Neat Trick.
OK, that makes sense. Thanks for the long explainer.
I think the AI bubble does feel a lot like the GFC. My understanding is that the amount of leveraging is much higher than pre-gfc, too. And I'm utterly unconvinced that genAI has much real underlying value across most industries (other than some niches like copywriting, and some simple coding tasks)
Read all your comments, would like your take on the Buffett Index topping 200% for the first time (total stock market value vs. GDP). It was around 130% in 1929 and 2008.
Considering the disproportionate amount of stocks in AI, and, so far, no clear path to investors seeing a return, I'm scared shitless.
What's your take on that bit?
would like your take on the Buffett Index topping 200% for the first time (total stock market value vs. GDP). It was around 130% in 1929 and 2008.
I mean, Berkshire itself is trading at 15 p/e. So if you take the index seriously, it's a good place to shelter your money when the storm hits.
But Buffet was a value investor and we're in a growth investor economy. I wouldn't say the index is a good indicator of a pending crash any more than it was three years ago.
Considering the disproportionate amount of stocks in AI, and, so far, no clear path to investors seeing a return, I’m scared shitless.
Bulls make money
Bears make money
Pigs get slaughtered
Diversify your portfolio, understand why you think an investment has a bright future (and when that future has dimmed), don't try to time the market, and don't beat yourself up if you're wrong.
I don't see anything in this market to be afraid of. I see a plethora of opportunities to generate healthy returns long term.
I have no investments. Cashed out what little I had over the past two years of unemployment.
But you have a point in looking to opportunities. Always ways to profit from change and crisis. I'm more worried about the overall health of our individual investments. People usually aren't hustling their money around. Most simply contribute to their Roth or IRA or whatever and let the market play out over decades, just as we were taught.
Most simply contribute to their Roth or IRA or whatever and let the market play out over decades, just as we were taught.
Long term, it has been a smart play. Very hard to find a historical milestone where a $1 invested in Year X is worth less than year X+10, much less X+40
Said everyone right before evitable crashes caused by usanian infinite greed.
Now you are dong something they will notice. The number needs to be much higher.
An avalanche starts as a tiny bit of snow
🥳
We are no where near maxxing out credit, which will happen before these malicious clowns lose control.
I suspect at that point they will print money to pay debt and start a hyper inflation.
But lost in all this is stated inflation higher than the cpi, understated on purpose several times in the last half century.
By 2008 inflation was 5 to 8 percent on average under the old measure. Around 3 on the new.
This is an aside, but why is CNBC misspelling "treasuries"?
Huh, so I spent 10 seconds googling it, and turns out they actually answered this very question 16 ish years ago....
https://www.cnbc.com/amp/2009/08/18/treasuries-and-treasurys-why-the-y.html
...wow, TIL.
Is CNBC children’s NBC?
Check out @titanicx@lemmy.zip's comment. They do it in purpose !
But don't they also have Jim Cramer? He's basically a shouty Barney the Dinosaur.
AI slop?
Possibly. Or maybe they fired the copy editor.
It is correct
Both can be true.
Let's all sell up! There are ways to peacefully protest with robust impact.