Treasury Reintroduces 30-Year Bond

[papau]

http://www.treas.gov/press/releases/js2671.htm
Treasury Reintroduces 30-Year Bond

On August 3, 2005, the U.S. Department of the Treasury announced that it would resume selling 30-year bonds beginning early next year. The Bush administration suspended sales of the 30-year Treasury bond in October 2001, saying that the long-term bonds were no longer needed to meet the government’s borrowing needs. Treasury determined that it now has the flexibility to reintroduce the 30-year bonds cost-effectively. Assistant Secretary for Financial Markets Timothy Bitsberger, said the department expects the government to issue about $20 billion to $30 billion in new securities annually during the first three months of next year. The first newly issued bonds will mature on February 15, 2036.

[SteppingRazor]

1. I love how either side is a plus...

They were suspended because "the long-term bonds were no longer needed to meet the government’s borrowing needs."

But they were brought back because "Treasury determined that it now has the flexibility to reintroduce the 30-year bonds cost-effectively."

Huh. So when is anything bad news, exactly?

[unblock]

2. they were supremely shortsighted IDIOTS not to have locked in low rates

fortunately they lucked out and the chinese have been keeping the long rates down, and they're finally pouncing before it's too late.

but we could have locked in decades of low interest payments through refinancings over the last several years.

instead, 2- and 5- year notes will have to be refinanced later at much higher rates.

all this helped to reduce interest payments during shrub's first term but increases them for the next 30.

:grr:

[FloridaPat]

3. Can't starve the beast if you give him a break. I had not realized

that about the bonds. What an amazing jerk we have as president.

[sendero]

4. Why ANYONE...

.... would buy a 30-year instrument from a country that is so far in debt that it will have no choice but to monetize the debt is beyond me.

I wouldn't buy a 30-year with a 8% coupon.