I really forgot how much I hate the bike leg of the race until my bike ride this morning. I did a bit over 12 miles in 40 minutes. I think I hate the bike leg because I just find it the most boring part of the race. the swim is the first leg so I'm all hyped up with adrenaline. The run I cheat and wear my iPod so I can listen to my music.
So do we really need some pointdexter from Harvard to tell us that there could be a bunch of sovereign defaults in the near future? I can understand if it was a sociologist who said it as they are masters of sating the obvious but it was a frackin' economist who felt the need to say it.
Some talking head was commenting on real and bitter truths about the economy today on BBRG. Here is the only real and bitter truth we need to know. Our standard of living is going down. We will most likely not be better off than our parents and more than likely not be better off than our grandparents were. Sorry but when we have the kind of easy money party and debt binge we've had for the past twenty years there is no mathematical way more debt can solve the problem.
The marketing guys were in the office today. One of my PMs called me and said they were in his office taping and he just had to be on the phone looking like he was working, lol. Before he hung up he told me he and the other PM would be down at the desk with the video crew to tape a talking with the trader segment. I immediately cleaned the desk up- all the Skoal tins into the drawer, all non-essential papers thrown out. I really cleaned it up but I did of course leave the Chuck Norris book right out int he open along with the two pictures I have on my desk- one of me and the boys at the beach, the other me and the husband snowboarding up in Stowe. I got rid of the dip I had in too, lol. Sadly I had not shaved this morning. Thankfully there was no audio to go with the video.
So, first the Fed ups the discount rate. My bond friend tells me that was just a signaling, not an actual tightening event so not really a policy change per se but a signal that policy will be changing. Today what was done though was a tightening event albeit stealth. The Supplemental Financing Program was started by the Treasury at the behest of the Fed. It was done to help manage reserves. The Fed could not pay interest the reserves. The Fed can legally now pay interest on reserves. The SFP was winding down as it was not needed to help manage reserves anymore and the debt ceiling was getting close to being breached. Well then Congress raises the debt ceiling. N o big deal, the SFP was still winding down. Until today when the Treasury renewed the SFP to the tune of $200 billion. I have to wonder why they did that if the Fed can now pay interest on reserves? Well, if they want to drain reserves they could raise the rate they pay on them. That would be a blatant tightening and not received well. So instead the get the Treasury to renew the SFP. Now the Treasury will be able to continue selling bills on behalf of the Fed and thus drain reserves- voila, tightening...
My bond friend said this is a big deal. He did not make a call on if it is a bad deal as there roughly $1 trillion in reserves out there. The Fed does not want them starting to cause inflation so they need to do something to control them. He is not sure if the Fed will be able to pull this off but as he said it will make for really interesting observations and possibly tragic comedy. I think we really need to party like it's 1938 again.
Last night I had to do laundry to get my gi clean for karate- seep the leg!- tonight. So I figured I'd just do all of it in the super huge, industrial sized, super efficient machines in the building laundry rooms. They only take 30 minutes to wash and 30 to dry. Probably cheaper than using the ones in the apartment. I am in the elevator down to the laundry room. It stops at a floor in between and a guy who looks like my friend PF's twin gets in. The elevator starts moving again and he then starts with "So how are the machines in the laundry rooms?" I gave him my assessment. I think he may have been hitting on me.
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