5 ms·

Because they want to be exposed to riskier instruments, not because they see any kind of risk in financing the american debt...

by d--b 13d ago

toomuchtodo 13d ago
Indeed, but as US treasuries yield go, so do mortgage rates. Do mortgage backed securities carry more risk than US treasuries? Maybe not. Those with mortgages are highly incentivized to continue to pay their mortgages every month, while the US government doesn't appear willing to stop growing the debt. The quote in JumpCrisscross' comment explains this: > These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early." TLDR More yield for similar risk profile while pushing up mortgage rates over time (all US consumer debt is priced off of US treasury yields; less demand for treasuries will push up their yields). Watch the 10Y and 30Y curves for where the market thinks rates are going. (think in systems)
- bushbaba 13d ago
  If the U.S. defaults it’s likely the economy would go to shit or see high inflation. Either way your f’d
  - toomuchtodo 13d ago
    Yeah, I'm just watching where on the fucked meter we're currently at. Happens slowly, then all of a sudden. Trump says he will cease trading with top partners unless Fed lowers rates - https://www.cnn.com/2026/09/04/economy/trump-trade-fed https://www.cnn.com/2026/09/04/economy/trump-trade-fed - September 4th, 2026
    - josefritzishere 13d ago
      I do like that Hemmingway quote... https://medium.com/thought-thinkers/what-happens-gradually-then-very-suddenly-060a6c163cec https://medium.com/thought-thinkers/what-happens-gradually-t...
      - java-man 13d ago
        the people in power now never read Hemingway.
        josefritzishere 13d ago
        People complain about the kids not reading... I agree more with you. Boomer don't read either.
        pseudohadamard 12d ago
        Several of them barely even read, period. Unless their name is on every powerpoint slide in a large font.

Because they want to be exposed to riskier instruments, not because they see any kind of risk in financing the american debt...

by d--b 13d ago

Because they want to be exposed to riskier instruments, not because they see any kind of risk in financing the american debt...

toomuchtodo 13d ago

Indeed, but as US treasuries yield go, so do mortgage rates. Do mortgage backed securities carry more risk than US treasuries? Maybe not. Those with mortgages are highly incentivized to continue to pay their mortgages every month, while the US government doesn't appear willing to stop growing the debt. The quote in JumpCrisscross' comment explains this: > These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early." TLDR More yield for similar risk profile while pushing up mortgage rates over time (all US consumer debt is priced off of US treasury yields; less demand for treasuries will push up their yields). Watch the 10Y and 30Y curves for where the market thinks rates are going. (think in systems)

bushbaba 13d ago
If the U.S. defaults it’s likely the economy would go to shit or see high inflation. Either way your f’d
- toomuchtodo 13d ago
  Yeah, I'm just watching where on the fucked meter we're currently at. Happens slowly, then all of a sudden. Trump says he will cease trading with top partners unless Fed lowers rates - https://www.cnn.com/2026/09/04/economy/trump-trade-fed https://www.cnn.com/2026/09/04/economy/trump-trade-fed - September 4th, 2026
  - josefritzishere 13d ago
    I do like that Hemmingway quote... https://medium.com/thought-thinkers/what-happens-gradually-then-very-suddenly-060a6c163cec https://medium.com/thought-thinkers/what-happens-gradually-t...
    - java-man 13d ago
      the people in power now never read Hemingway.
      - josefritzishere 13d ago
        People complain about the kids not reading... I agree more with you. Boomer don't read either.
      - pseudohadamard 12d ago
        Several of them barely even read, period. Unless their name is on every powerpoint slide in a large font.