If the U.S. defaults who will profit?

[Bosso 63]

[brooklynite]

1. Smart investors with money...

If you can avoid the panic and assume that EVENTUALLY the US Government will get its act together, T-Bills will shoot up to higher interest rates once borrowing authority is settled.

You'll also be able to buy depressed stocks for long-term holding.

[A HERETIC I AM]

11. And if interest rates "shoot up" as you say....

what happens to the value of T-Bills currently held?

[brooklynite]

19. Nothing

Bond are generally not revalued once bought. Question is whether they can be redeemed in advance of maturity and repurchased.

[A HERETIC I AM]

21. Wrong. (Edited)

Last edited Tue Oct 15, 2013, 04:09 PM - Edit history (1)

Not just wrong, but COMPLETELY AND UTTERLY wrong.

Bond (sic) are generally not revalued once bought

The value of a bond changes all the time, with each and every trade, and as a consequence, so does its yield. What does NOT change is the "Coupon rate" or the amount the bond pays in interest to the holder on an annual basis. This does not apply to so-called "Zero Coupon" bonds which INCLUDES T-Bills (US Treasury Securities that have maturities of less than 1 year) because they do not pay interest payments.

Question is whether they can be redeemed in advance of maturity and repurchased.

Again, NO. They can not be "redeemed" before they mature. They can however, be sold, and bought quite easily, as the market for US Treasuries is the most liquid and deep bond market on the planet.

Words matter. Words have definitions. "Redeem" means something different than "Sell".

Edit;

The answer to the question I asked you - What happens if interest rates shoot up? is ..

the value of any bonds held will fall.

[Bucky]

2. The Illuminati, who planned this whole thing out

...from their moon base.

[Bosso 63]

6. The Illuminati live in Atlantis.

They moved there back in '08' after shorting the housing bubble.

[NuclearDem]

20. Unfortunately, it will be the Illuminati.

The Reptilians and Arilou put too much money in T-bills.

[el_bryanto]

3. While I agree that some investors may make some short term profits on this

I don't think that anybody really benefits from it. The whole economy of the world will take a hit, and we don't know how big a hit that will be.

Bryant

[oldhippie]

10. +1 nt

[Bosso 63]

12. I would have assumed that major players,

( institutional investors for example), would have stopped this by now.

[el_bryanto]

16. I think they would like to. Clearly.

The Tea Party at this point is out of control - at one point they had control, but at this point they don't.

Bryant

[Lifelong Dem]

4. Ones who secede from the United States?

[BainsBane]

5. No one

I was tempted to say China because they might benefit from US decline, but they hold a great deal of our debt. The financial sector does not want default. This is not about profits; it's about idiocy.

[Bosso 63]

9. Idiocy to be sure, but as it gets down to the wire, big money would want to hedge there bets.

[BlueCaliDem]

7. No one. We all lose. Even the Teapublicans. eom

[Paper Roses]

8. If the stock market tanks, the rich will buy stock at a bottom price.

The rest of us will go down the tubes.

When things rebound---if they do--- the rich will cash in.

Meantime, the rest of us are on the street.

[Historic NY]

13. Eric Cantor for one...

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.



http://www.salon.com/2011/06/28/eric_cantor_conflict_of_interest/

[Bosso 63]

14. Well there you go.

Thanks!

[Myrina]

17. ^^ Time for an ethics investigation on Mr Cantor ^^

Yes indeed.

[Recursion]

15. Anyone short on securities (nt)

[mahina]

18. That's the most important question.

Credit default swap owners as well as the others mentioned. I wonder what Goldman Sachs holds.

[geek tragedy]

22. No one. The downside is HUGE for everyone, including the very wealthy. nt