“For the first time ever, the rate on 30-year mortgages slipped below that of 30-year Treasury bonds.”

At one point in the never-ending financial crisis, one in ten U.S. mortgage payments were late — I do not know what the figure is today.  But the following, given the current financial climate among Americans, is a real relief because the market is at least beginning to view the current state of the U.S. finances realistically.

At least this market understands just how pathetic, naive and dangerous those who think the U.S. is too big to fail really are:

“We live in a time in which market distortions are higher than usual,” our colleague Chris Mayer observes. “This thought really hit me when I saw something that I probably never should have seen: For the first time ever, the rate on 30-year mortgages slipped below that of 30-year Treasury bonds. In effect, the market was saying that an individual looking to borrow against his home is a better credit risk than the US government.”

It has come to this.  (Read more  of the above cited article here.)

Just one more thought, since the U.S. refuses to either lower its debt, reduce the deficit or balance the budget, these negative financial effects will multiply.

These consequences must multiply, since the U.S. refuses to change its ways.

 

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