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View Diary: GOP clueless about how sovereign bond market works (212 comments)

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  •  the real problem is no one knows (7+ / 0-)

    I am certain there are some things they can do, but these systems were never designed to deal with this situation, nor should they have needed to be.

    It's the first part that gets to the heart of the matter - it's all interconnected and when one things fails, there will be a domino effect. I can guarantee you most of the external (bank, etc) systems the treasury interacts with related to bonds are not designed to handle what will happen, either.

    Want a progressive global warming novel, not a right wing rant? Go to www.edwardgtalbot.com and check out New World Orders

    by eparrot on Tue Oct 08, 2013 at 09:41:55 AM PDT

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    •  When Lehman collapsed, it rippled out to an (1+ / 0-)
      Recommended by:
      eparrot

      external mutual fund company that had invested its money market assets in Lehman commercial paper which became worthless.  The fund broke the buck and initially announced a value of $0.97, a shock to investors who assume $1 = $1.  Fluctuation is exceedingly rare.  And of course the situation was much worse than what was first announced.  Even the TaxFree US Government Money Market had its assets frozen.  The interconnectedness of the banking and finance system became apparent as more and more people were affected by the money markets that were supposed to be as good as cash but became illiquid.

      There is no existence without doubt.

      by Mark Lippman on Tue Oct 08, 2013 at 07:21:52 PM PDT

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      •  yep (0+ / 0-)

        my point was more a technical one in response to the observation that the Treasury has technical challenges regarding prioritization - all the interconnected parts will have technical challenges as well. But you are absolutely correct that the actual economic interdependency is huge.

        Want a progressive global warming novel, not a right wing rant? Go to www.edwardgtalbot.com and check out New World Orders

        by eparrot on Wed Oct 09, 2013 at 08:27:30 AM PDT

        [ Parent ]

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