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The Current State of the Government Debt

As far as I can tell, Treasury is engaging in normal portfolio reallocation as the debt nears the limit. They are selling securities held by the government to the public. This changes the composition of the portfolio, but does not change the total. However, it does provide funds for the government to continue operations as those sales of intragovernmental holdings bring cash into the treasury. Continue Reading →

This is How a Financial Meltdown Might Be Starting

Buyers suddenly decide U.S. Treasury securities may not be risk-free any more. They start to hedge against possible price decreases. An easy way to do that and limit risk is by purchasing put contracts on Treasuries. Continue Reading →