[AMV] Amerikaanse politiek #482 Silence before the Stormy

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Uncle Sam needs to borrow a ton of money this week — in the middle of a fight with its biggest creditor.
The United States plans to sell about $294 billion of debt, according to the Treasury Department. That's the highest for a week since the record set during the 2008 financial crisis.

Federal revenue is declining because of President Trump's tax cuts, so the government needs to borrow more to make ends meet. At the same time, Washington's borrowing costs have climbed rapidly in recent months.

"The amount of debt coming on the market this week is extremely large," said Rick Rieder, global chief investment officer of fixed income at BlackRock, the world's largest asset manager.

The government is auctioning all this short- and longer-term debt at an awkward time. Last week, Trump vowed to impose wide-ranging tariffs on China, which owns of more Treasury bonds than any foreign country.

China responded by saying it would fight any trade war "to the end." When asked by Bloomberg Television whether China was considering scaling back purchases of US debt, China's ambassador to the United States said, "We are looking at all options."

China holds $1.17 trillion of US debt. It trimmed those holdings by 1.4% between December and January, the latest data show.

"We do rely on international investors in Asia for a good deal of our Treasury funding. And that is something a lot of eyes are focused on now," Rieder said.

Why China keeps buying

Guy LeBas, chief fixed income strategist at Janney Capital, played down concerns about China "abandoning" purchases of US debt.

After all, one reason Beijing owns so many Treasuries is because of a huge trade surplus: China sells more goods and services to the United States than it buys, and it has to do something with all that cash. China chooses to invest in safe assets, like US debt.

"We pay China in dollars for whatever they import to the US. They could take the dollars and hoard them, but that's not a particularly economical exercise," LeBas said.

Washington and Beijing are in talks aimed at reaching a deal that would avert a full-blown trade war. One reason to keep China happy is that Trump needs China and other foreign investors to pay for his tax cuts, which are expected to add more than $1 trillion to the federal deficit over the next decade.

"The amount of debt that has to be issued to fund the tax bill is tremendously high," said BlackRock's Rieder.

Borrowing costs on the rise

At the same time, the Federal Reserve has stopped buying US debt as it unwinds a financial crisis-era program that was aimed at keeping borrowing costs low. And investors are growing more worried that inflation will force the Fed to raise short-term interest rates, making all kinds of debt more expensive.

"It's a tricky dynamic for the markets," Rieder said.

Washington is planning to spend even more very soon. Last week, Trump signed a $1.3 trillion spending bill that will further increase borrowing needs.

The United States ran a $215 billion deficit in February, the biggest in six years. The annual budget deficit could exceed $1 trillion as soon as next year, according to the Committee for a Responsible Federal Budget. The fiscal watchdog group recently warned that interest payments on US debt alone could quadruple to $1.05 trillion by 2028 if current policies stay in effect.

Concerns about the gap between US revenue and spending have helped drive up Treasury rates this year, unnerving stock market investors accustomed to low rates. The 10-year Treasury yield spiked from about 2.4% at the beginning of the year to nearly 3% in February. It's about 2.85% today.

"No one will abandon US Treasuries, but they may demand higher interest rates," LeBas said. He added that borrowing costs don't seem "especially problematic" at these levels.

Rieder anticipates borrowing costs for the federal government will keep rising, especially during the second half of 2018. But he expects very strong demand for Treasuries from life insurers and pension funds that cater to aging baby boomers.

"The demand for fixed income assets is tremendous," Rieder said. "That will put a cap on how high rates go."

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Op woensdag 28 maart 2018 12:35 schreef Trumpinator het volgende:

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De VN mag van mij ook opgedoekt worden. Log bureaucratisch orgaan wat compleet zijn doelstellingen niet gehaald heeft. Vietnam, Joegoslavie, Rwanda etc.

twitter:

realDonaldTrump twitterde op woensdag 28-03-2018 om 12:16:26 Received message last night from XI JINPING of China that his meeting with KIM JONG UN went very well and that KIM looks forward to his meeting with me. In the meantime, and unfortunately, maximum sanctions and pressure must be maintained at all cost! reageer retweet

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Op woensdag 28 maart 2018 12:58 schreef klappernootopreis het volgende:

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belastingverhoging is een vies woord in republikeinse kringen.

twitter:

CBSNews twitterde op woensdag 28-03-2018 om 09:24:01 Stormy Daniels' lawyer Michael Avenatti files motion in California federal court, seeking to depose President Trump and his lawyer, Michael Cohen https://t.co/HgF7FL73bK reageer retweet

twitter:

MichaelAvenatti twitterde op woensdag 28-03-2018 om 11:12:30 The motion is set to be heard on April 30, 2018. We are confident that the Court will permit the requested discovery after applying Supreme Court precedent and the well established law in the Ninth Circuit. https://t.co/PQh6UlNyNL reageer retweet

SPOILER

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Op woensdag 28 maart 2018 13:02 schreef klappernootopreis het volgende:

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Als op audiëntie bij een Oosterse leider gaat wordt je er beschouwd als een ondergeschikte. Dat weet Xi, en dat weet Kim. Maar wie weet het niet? Trump.

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Op woensdag 28 maart 2018 13:05 schreef klappernootopreis het volgende:

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Wederom een slimme zet van een advocaat die precies weet wat hij moet doen. Die gast is echt met dé zaak van zijn carriëre bezig.

Ka-ching!!

twitter:

realDonaldTrump twitterde op woensdag 28-03-2018 om 11:52:36 THE SECOND AMENDMENT WILL NEVER BE REPEALED! As much as Democrats would like to see this happen, and despite the words yesterday of former Supreme Court Justice Stevens, NO WAY. We need more Republicans in 2018 and must ALWAYS hold the Supreme Court! reageer retweet

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Op woensdag 28 maart 2018 13:08 schreef KoosVogels het volgende:

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Trump verlangt zo wanhopig naar een schouderklopje dat hij direct maar al z'n kaarten op tafel gooit. Mijn hemel, wat is die man een belabberde dealmaker.

twitter:

MichaelAvenatti twitterde op woensdag 28-03-2018 om 00:53:44 MC and DJT pride themselves on being "tough guy" negotiators who don’t simply roll over because someone demands it. But here, they expect people to believe that MC paid my client $130k immediately after she demanded it, even though they knew all along she was lying. #BS #basta reageer retweet

twitter:

MichaelAvenatti twitterde op woensdag 28-03-2018 om 11:39:04 Here is a link to the detailed pleading we filed in support of the motion. https://t.co/07tha8THpO reageer retweet

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Op woensdag 28 maart 2018 13:26 schreef grrrrg het volgende:
Waarom heeft oom Donald het eigenlijk nooit over Stormy Daniels? Houdt hij niet van vrouwen of zo?

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MichaelAvenatti twitterde op woensdag 28-03-2018 om 13:39:37 Can someone please ask Michael Cohen to call down to central casting again and order up a new hack to speak on his behalf? I’m bored with batting around David Schwartz. #neednewchallenge #basta reageer retweet

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Op woensdag 28 maart 2018 13:35 schreef klappernootopreis het volgende:

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Dat Avenatti zo'n succes heeft, heeft te maken met het automatisme wat er bij de Trump advocaten zit ingebakken. Blijkbaar heeft Trump al zoveel civiele schennisovertredingen gepleegd, dat ze zonder er bij na te denken al bij voorbaat een zwijgsom overmaken. Op gegeven moment komt er weer een zaak en zullen die onkosten wel verrekend worden. Maar nu Trump president is, staan ook de financiele handelswijze van zijn juristen onder een vergrootglas, en als ze dan proberen geld voor die "onkosten" los te weken bij Trump is dat een hele riskante zaak. Avenatti heeft dit natuurlijk goed in de gaten. Hoe langer deze zaak loopt, hoe onrustiger Cohen wordt. Op gegeven moment moet die namelijk zijn belastingaanslag invullen..

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Op woensdag 28 maart 2018 13:59 schreef klappernootopreis het volgende:

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Er IS een reden waarom de handtekening van Trump niet op die NDA staat. Om de schuldvraag te verdoezelen. Nu moet de voorbarig gehandelde Cohen er voor opdraaien. Wedden dat die tandenknarsend in zijn kantoor loopt te ijsbenen?

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Op woensdag 28 maart 2018 14:04 schreef OllieA het volgende:
Begint wel een beetje een topicreeks van kletskoek van beide kanten te worden.

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Op woensdag 28 maart 2018 14:19 schreef klappernootopreis het volgende:

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Hij kan voor afschaffen pleiten, maar ik denk dat een aanpassing van die amendment realistischer is. Pas dan kun je genoeg bipartisan steun krijgen om dit er door te drukken.