Monday, 9 March 2009

Not so much a financial crisis - more a re-financing crisis

As the old saying goes a rolling loan gathers no loss - so let's hope that the US government isn't trying to roll too many of them at the same time.

According to Bloomberg

The average maturity of U.S. debt fell to 49 months in the fourth quarter, the lowest since reaching 48 months in the second quarter of 1983, when yields were dropping from the record highs set in 1981. Now, Treasury may have to refinance almost half its $6 trillion of debt over the next year.

“They have made a terrible mistake with their debt management,” said Jim Bianco, president of Chicago-based Bianco Research LLC.

Jenni Engebretsen, a Treasury spokeswoman in Washington, declined to comment on debt management policies. The department said last month that it plans to boost the average maturity to 52 months in the next five years, which will require more sales of longer-term notes and bonds. The government forecasts that the amount of debt due in 12 months will drop to about 33 percent through 2013, from about 44 percent Dec. 31.

No comments:

Post a Comment