US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year

ironchef · Nov 11, 2023

piezoe said:
Was that 2.6% the APR or before closing costs? If you did that at 2.6 APR, then you made a very smart decision.. It is almost an arbitrage if you buy Treasury securities or CD's. (I think of true arbitrage as being virtually zero risk.) To get an APR on an equity loan at 3 or below, both your credit rating and timing would have had to have been excellent. May I suggest ABBV is too volatile and risky as an income producer (though it is neither very volatile nor very risky) to get you near a true arbitrage. A little better choice might have been AMGN. Anything with a long steady history of dividend increases, low beta and recession resistant would qualify for consideration. And you might prefer not having all eggs in the same basket. But any dividend common stock leaves you with perhaps more risk than's wise. I'd consider a preferred stock for this use also.. But by actively managing your equity loan for a couple years you will, or already have, create[d] the opportunity to turn it into a virtual zero risk arbitrage via U.S. Treasuries. Perhaps you did that! (Let me just add in passing a warning to others that it's high closing costs on some of these home equity loans that can wreak havoc with the APR and the returns.) I very much like the way you think!
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I checked, I did pay 1 point for the loan so not APR. Would be APR if not a cash out refi. Also, even rental was @ 3.5%.

ironchef · Nov 11, 2023

Overnight said:
Sheesh, kinda' like negative oil. Producers got (briefly) paid to buy barrels.
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I remember the negative oil, many posts on ET on that one. Didn't know how to play otherwise would love to play that one.

piezoe · Nov 11, 2023

ironchef said:
I checked, I did pay 1 point for the loan so not APR. Would be APR if not a cash out refi. Also, even rental was @ 3.5%.
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you're still good!

destriero · Nov 12, 2023

ipatent said:
US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year

Estimated annualized interest payments on the US government debt pile climbed past $1 trillion at the end of last month, Bloomberg analysis shows. That amount has doubled in the past 19 months, and is equivalent to 15.9% of the entire Federal budget for fiscal year 2022.

The figures are calculated using US Treasury data which state the government’s monthly outstanding debt balances and the average interest it pays.

The worsening metrics may reignite debate about the US fiscal path amid heavy borrowing from Washington. That dynamic has already helped drive up bond yields, threatened the return of the so-called bond vigilantes and led Fitch Ratings to downgrade US government debt in August.

“There will be further increases to Treasury coupon auctions and T-bills outstanding going forward,” Bloomberg Intelligence strategists Ira Jersey and Will Hoffman wrote in a research note. “Besides deficits of over $2 trillion in the foreseeable future, climbing maturities following the increase of issuance from March 2020 will also need to be refinanced.”
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What is the net-effect to prices when you add >30% to the national debt from 2018-2020? Just a guess. Then add COVID supply disruptions.

The_Krakenite · Nov 18, 2023

(probably first year for collection was 1914?)
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That year I shall never forget...

The international gold standard prevailed from 1875 to 1914. There was a two-way convertibility between gold and national currencies at a stable ratio.

The Finance Act of 1914 in Canada gave the government the power to act as a lender of last resort to the banking system—one of the powers of a modern central bank. It also provided a means for the government (Treasury Board) to set the Advance Rate, the rate at which it would make loans to the chartered banks.

And then... shit got interesting.

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US Debt Interest Bill Rockets Past a Cool $1 Trillion a Year

ironchef

ironchef

piezoe

destriero

The_Krakenite