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Global bond yields hit 2008 highs, raising stakes for big borrowers

103 points kaycebasques 1 hour ago 93 comments

tananaev 1 hour ago | parent

Finally some evidence that the system is working. Most countries are borrowing like there's no tomorrow, so obviously rates should go up to compensate the risk of not paying back.

HappySweeney 1 hour ago | parent

It isn't the debt levels that are causing the rates to spike, rather the start of the emerging Bretton Woods III era.

AnimalMuppet 25 minutes ago | parent

Could you be a bit more specific about what you think "Bretton Woods III" is?

sph 14 minutes ago | parent

Not sure what GP meant, but I found this googling that term: https://static.bullionstar.com/blogs/uploads/2022/03/Bretton...

HappySweeney 10 minutes ago | parent

This is indeed what I meant.

glimshe 1 hour ago | parent

And the incredible thing is that yields are quite low based on historical standards. The risk of lending to most countries at yields that are barely above real inflation is massive for portfolio growth.

Let's take the US, where you have to consider lending money to the government for 10 years at 5.009%. This barely covers inflation if you consider real numbers rather than the financial fiction ones that have been published in the last 10-20 years.

In the 90s, an era of relative prosperity when the US was the sole remaining superpower, 5-year treasuries were paying 7-9% with inflation in the 2-4% range!

solatic 27 minutes ago | parent

> 5-year treasuries were paying 7-9% with inflation in the 2-4% range

One crucial difference: the US wasn't $40T in debt, and it wasn't pulling trillion dollar deficits. In 1998 the US federal government actually had a surplus! Even 9% interest wasn't going to wreck the Federal budget when the overall amount of debt to be serviced was so much lower.

Everything is relative to size. If your older brother lends you a dollar at 100% daily interest, you can still throw a balled-up Jackson at him a couple days later and walk away clean. But ask anyone who agreed to a crazy 20% interest rate on their car loan what it did to their personal finances, and all you'll hear is horror stories. 9% on $40T would be suicide.

zeroonetwothree 7 minutes ago | parent

Apart from a brief period (which also had higher inflation) yields were more like 6% in thr 90s.

method_capital 1 hour ago | parent

Working is an interesting term (which I agree with btw) because place like Japan with debt at 200%+ of gdp, rates rising are going to annihilate spending in other important areas.

Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

lordnacho 1 hour ago | parent

> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

Who could you vote for, in any democracy, that would fit this?

Also, how many voters would have the wherewithal to identify such a person?

bradleykingz 59 minutes ago | parent

conservatives?

verelo 57 minutes ago | parent

Is that a joke? Seriously. I don't see any conservative remaining, and it's been a while.

tdhz77 29 minutes ago | parent

It had to be a joke. Conservative policies have made things much worse. It’s hard to believe they have a party that gets 60 million people to vote for them.

willy_k 51 minutes ago | parent

Response to sister comment: conservatism, and the groups that claim to support it, are separate. Same with liberals, and socialists, and the Democrat Party.

doobiedowner 31 minutes ago | parent

If that were true, the streets would be punctuated by shrill screams in reaction to the past decade of Republican spending.

dragontamer 31 minutes ago | parent

So name one. These politicans have names, do they not?

We do have the name of one politician who balanced the New York City budget though. Its probably not going to please a lot of people to hear that guy's name though. But that's what people want, right? Balanced budgets?

But no. That's not what people want and we all know it.

p_j_w 44 minutes ago | parent

At least in the US, conservatives have done more to increase the debt than liberals for the last 40 years at least.

fragmede 31 minutes ago | parent

Turns out, that was just a lie that some people told fiscally conservative people to get them to vote against their interests, just like other "wedge" issues like abortion or trans people.

pjc50 41 minutes ago | parent

Trump, sitting on top of a Republican government, is responsible for 10Trn of the debt, about a quarter.

Conservatives gave up on principles long ago and have settled for simply lying about everything, including what's happening and who's responsible for it.

podocarp 22 minutes ago | parent

The words are so overloaded. Republican is just generic right wing. I think the "conservative" the parent is talking about is the neoliberalism like what Milton Friedman would propose. He would have wanted half of the government gone, next to no market intervention (he even argued against seatbelts in one lecture). That would actually be the "conservative" someone you stereotypically imagine like Ron Swanson would adopt, who describes the perfect government as just a person in a tiny white room. The Republicans are a joke, just like the Democrats. They're both there for themselves, and have no actual agenda, manifesto, ideals, or values. They've got all the junk identity politics, religion, abortion, immigration crap mixed in such that you're either picking crap or crap. There's nothing "liberal" about the Democrats and nothing "conservative" about the Republicans. The Republicans were even the ones who freed the slaves! Make of that what you will.

idiotsecant 11 minutes ago | parent

I think democracy is perhaps a fundamentally unstable system. It requires constant corrective force, and a lot of it, from a lot of people. When the members of that democracy start to get a little too comfortable it fails.

Humans are designed to operate in smallish clans with benevolent dictators whose right to rule is based on social currency with people they personally know. Anything else is a house of cards on unstable foundation.

I'm not sure how you fix that, but democracy so far has maybe been the least bad patch.

wongarsu 5 minutes ago | parent

Some green parties. Their primary goals might seem unrelated, but turns out caring for the environment and climate change is correlated with long-term thinking.

Note I said "some", before rushing to mention all the examples of green parties engaging in misguided policies. Those also exist

In the anglosphere it's more difficult because first-past-the-post voting makes such parties unlikely to succeed or be relevant

nemomarx 1 hour ago | parent

Eliminate candidates who promise to lower taxes (slows down debt repayment substantially) and those who promise new or expanded services. Who's left? "I'll tax you a little more and not spend that money" is a tough pitch, even if it would be helpful for the debt.

I think Clinton was the last us president to balance the budget and start reducing the deficit so I guess see what he did.

AnimalMuppet 32 minutes ago | parent

See what Clinton did? Well, he said he'd create a plan to balance the budget. And he did. It was a ten-year plan, and it involved doing very little for the first eight years, and then doing the real work in years nine and ten - that is, after Clinton was out of office, even if he got a second term.

Then 1994 happened, and the Contract With America. The Republicans took both the House and the Senate, and they passed a balanced budget , then, whether Clinton liked it or not.

So that's what "Clinton" did. He pretended he was going to do something, and the Republicans called his bluff, and made him do it.

Note well: Republican majorities in any other set of circumstances have not yielded a balanced budget. I'm not saying that they're the answer (what they did under Trump shows that they very clearly are not the answer for fiscal responsibility). All I'm saying is that "Clinton balanced the budget", while technically true, isn't really the way that played out.

idiotsecant 13 minutes ago | parent

So all we have to do is engineer a scenario where one party screws over the other one by accidentally doing good governance.

Or just hurry up and invent ASI and let it be someone else's problem to take care of this crazy human zoo.

huurtehoog 52 minutes ago | parent

Japan is closer to 130% debt-to-gdp. The 200% number is based on gross debt and ignores some other mitigating factors for shock value.

method_capital 47 minutes ago | parent

Great.

Rates going higher increases interest expense materially. You either rack new debt or you cut in places that are uncomfortable. The point is: responsible leadership in the developed world has gone mia for decades. There's a price to be paid that's real.

outside1234 38 minutes ago | parent

Or you print lotsa yen, which is probably what will happen here

huurtehoog 19 minutes ago | parent

Remains important to base any analysis on the correct numbers.

kingleopold 44 minutes ago | parent

japan is an empire, longest one too, you can't vote for that LMAO

AnimalMuppet 37 minutes ago | parent

Except that the emperor doesn't actually rule Japan - the Diet does, and you can vote for them.

kingleopold 36 minutes ago | parent

Good luck with that after literally a thousand and more years, they can be most violent if times comes,

npongratz 43 minutes ago | parent

> vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly

I wish you luck. Endless promises and short term thinking are the main things the system incentivizes. Each politician is temporarily renting their seat, paid for by other people. Each bureaucrat is studiously, steadfastly avoiding learning anything that threatens their continued employment, which is paid for by other people.

cyanydeez 40 minutes ago | parent

you don't think what they promise is important?

Just seems like one of those weird ambiguities.

outside1234 38 minutes ago | parent

More likely they are going to "monetize" the debt. Aka print yen to pay it off.

LPisGood 31 minutes ago | parent

“Promise endlessly” is an oft touted criticism of social safety net programs, when the reality is that reducing vast tranches of corporate welfare is typically more than enough to solve budget shortfalls.

sph 18 minutes ago | parent

> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

Maybe we should consider the possibility that there is no such candidate, or if there is, they cannot compete against the 'populists'. What then?

smallmancontrov 10 minutes ago | parent

> Maybe we should vote for people who are financially literate, can think long term, and can "conserve" rather than politicians who promise endlessly?

Conservatives:

    +-------------------------+----------------------------------------+
    | President Name          | Deficit Increase (+) or Decrease (-)   |
    +-------------------------+----------------------------------------+
    | Donald Trump (2nd term) |                                    N/A |
    | Donald Trump (1st term) |                                 +11.1% |
    | George W. Bush          |                                  +4.3% |
    | George H. W. Bush       |                                  +1.8% |
    | Ronald Reagan           |                                  +0.5% |
    | Gerald Ford             |                                  +0.8% |
    | Richard Nixon           |                                  +0.7% |
    | Dwight D. Eisenhower    |                                  -1.8% |
    +-------------------------+----------------------------------------+
Liberals:

    +-------------------------+----------------------------------------+
    | President Name          | Deficit Increase (+) or Decrease (-)   |
    +-------------------------+----------------------------------------+
    | Joe Biden               |                                  -5.7% |
    | Barack Obama            |                                  -6.7% |
    | Bill Clinton            |                                  -6.1% |
    | Jimmy Carter            |                                  -0.1% |
    | Lyndon B. Johnson       |                                  +1.9% |
    +-------------------------+----------------------------------------+
Deficit rate = (federal outlays - federal receipts) / GDP. Change = deficit rate in final fiscal year - deficit rate in first fiscal year. The % symbol below means percentage points of GDP, not relative percent change. The first and last fiscal years whose end dates occurred during each presidency are used. Transition fiscal years can therefore span two administrations. Figures are OMB actuals through FY2025 and are rounded to 0.1%.

whatever1 1 hour ago | parent

There is 0 risk to getting repaid from the US. We will print for the lenders the exact amount they are promised.

Promises kept. All is good

andrewmutz 1 hour ago | parent

Printing money causes inflation and inflation causes increasing interest rates. It is possible to enter a positive-feedback cycle, and has happened to countries before.

I'm not predicting that this will happen, but we do need to take the debt seriously and not assume we will be able to just print money to get rid of it.

llm_nerd 52 minutes ago | parent

I feel like there is an inside joke here, so I apologize if I am being a bit spectrum-y taking it at face value.

Every sovereign can print money and repay lenders, but doing so cause an inflationary cycle. When it looks like that is inevitable, borrowing rates start spiralling, so you have to print more money, and soon you are Zimbabwe.

Like the US is catastrophically indebted -- both parties have been negligent on this, though one party has been much, much worse than the other -- and right now there's a certain defeated malaise about 40T in debt. The last time bond rates were this high the country had only $6T in debt, and even that was considered a catastrophic level, and bond rate trends are...not looking good for those want government funds leftover after servicing the debt.

"Oh but we'll just grow the economy..."

The debt has grown by 6.5x, and the GDP has grown by 2.8x since 2002. The math just isn't mathing. And remember that bond prices were historically low, and if there was ever a time to pay down the debt....

Nope, $2T deficit, "hide in the ballroom bunker and hold the world hostage with the nuclear launch button" projects, and now a hilarious $1.3T bribe to voters. Utterly busted. It is astonishing that it took this long for the world's lenders to chuckle and say nah.

ajross 43 minutes ago | parent

> the US is catastrophically indebted

Debt service costs as a percent of GDP are in fact lower than they were in the 1980's, when things came out fine. Is this the best way to run the budget? Likely no. Should we make policy changes? Certainly yes.

Is the best way to drive that policy argument flinging around adjectives like "catastrophically indebted". No. If you have a suggestion make a suggestion. Screaming about "The Problem" without discussing policy is echo chamber logic.

method_capital 36 minutes ago | parent

Buffett claimed you could solve the deficit problem instantly by firing congress when they run deficits. Obviously, untenable (they'll cheat, admin overhead, etc).

You could very easily force congress to balance the budget (both parties and the media have complained endlessly about this for exactly no good reason). You could also freeze spending at current levels and force congress to do it's job: allocate our limited resources most productively.

Hard to get re elected doing the right thing, but maybe we just need a throw away set of leaders to do the hard work?

llm_nerd 36 minutes ago | parent

> Debt service costs as a percent of GDP are in fact lower than they were in the 1980's

This is an amazing use of the "in fact" trope, in exactly the same misleading way[1]. I talked about debt, and you casually shifted to servicing costs which presumes that rates stay historically low...when they're actually rapidly rising. Comical.

In the 1980s, the debt to GDP ratio was less than half what it currently is. Rates were higher, making the debt a crisis level then, but maybe you haven't noticed...rates are going up. Indeed, right now the rates were historically low, and anyone with functioning grey matter saw what was coming.

The US has an absolutely solidified, structural deficit -- utterly zero chance of paying down the debt, and a desperate need to constantly be borrowing more -- and an enormous debt. The trajectory of rates say this is crisis levels.

It's actually kind of funny reading your ridiculous comment -- "screaming", "echo chamber", etc -- when you sound completely in denial.

Your argument is basically the guy that used the "0% interest for six months" checks he just got with his 28% credit card, telling everyone that it's free money, so there's no problem if he goes wild. ROFL.

Sounds like it's time for a $1.5T military budget and a $1.3T bribe! Free money!

Sidenote: When asked about the bond market, Trump seriously offered up the "military solution". Utter insanity.

[1] - It's also simply a lie, making this extra funny. The highest historic servicing cost was 3.2% of GDP. It is currently projected at 3.3%, and that presumes rates don't keep spiralling up. So your "in fact" was simple bullshit, even as you tried the narrative shift by changing from debt to servicing costs.

ajross 14 minutes ago | parent

You're doubling down with more hyperbole. What's the policy suggestion? What do you propose to cut? Where do you propose to find new revenue? What compromises are you willing to make to other priorities and what stands are you taking on which you won't budge?

Shouting about deficits is, to be blunt, just crack for the incurious mind. It's a party you're throwing for people who agree with you. Refusing to treat with the very real (and despite your hyperbole, very soluble) problems is likewise a trick your brain is using to expand the guest list: you can get almost everyone to sit at a "Deficits Suck" table, it's much harder to populate a "Let's Talk About Entitlement Restructuring and a VAT" forum.

But it's the boring wonks at the forum (the one's you're shouting at!) who are ultimately on the hook for saving you.

llm_nerd 10 minutes ago | parent

> What do you propose to cut? Where do you propose to find new revenue?

I'm not American, and no one needs to "save me". The country is a fucking idiocracy, and you elected a fascist self-dealing conman pedophile rapist. I pointed out objective, indisputable reality and you responded with some farcical lies and pearl clutching nonsense.

But you know, when your country is bankrupt, increasing military spending $600B, paying for endless vanity projects for that disgusting bag of shit to emblazon his shameful name on your country for eternity, or even entertaining the disgusting "bribe the population" farce is just fantasy.

Endlessly giving tax cuts and breaks to your kleptocracy/plutocrat class...maybe an incredibly stupid thing to do, no?

Nah, something something 1980s nothing we can do hey let's build an arch to celebrate the most catastrophically destructive president in history!

zaphar 32 minutes ago | parent

There are really just two ways to avoid the inflationary spiral. You can either increase income (i.e. grow gdp) or you can decrease spending (i.e. cut entitlements).

This is as close as it can be to clearly explain. The problem is that most of our politicians are not explaining it and instead ignoring it. As an individual the only thing you can do is vote for candidates who are willing to have that hard conversation with the public. Unfortunately it looks like that would require voting for a third party candidate and a vanishingly small minority of the electorate is willing to do that. So given all of that context I'm not really sure that the term "Catastrophically indebted" is wrong.

whatever1 42 minutes ago | parent

Not sure it plays out that determistically. If the gov prints money to just payoff debt without increasing the government spending, there is no new money entering the market.

You just pay off old promises that were expected to be kept.

The real risk is that new lenders will not be willing to lend you, yes. But not outright inflation.

SilasX 39 minutes ago | parent

So you agree it's a problem, but still characterized the situation as "all is good" in your first comment. I would not call that good, and I would be have used different words to characterize/trivialize this situation.

neilwilson 34 minutes ago | parent

That assumes the new lenders have an aggregate alternative.

If you follow the accounting in a floating exchange rate system you’ll find they don’t.

Find me a banker that will turn down free basis points and I’ll show you a pink unicorn.

fragmede 10 minutes ago | parent

The math that isn't mathing is that GDP needs to stop being the number we look at. Goodhart's Law says that "When a measure becomes a target, it ceases to be a good measure." and GDP is no exception. If I pay a cleaner $200 to clean my home, that's $200 into the GDP. If I do it myself, that's not reflected in the GDP. If I buy a robot maid, pay for it once, and it cleans my apartment for me, thats an ongoing quality of life improvement that's not going to be reflected in the GDP. If that $50,000 robot maid frees up 10 hours/week for me to do other stuff, GDP might actually fall instead of rise.

grey-area 21 minutes ago | parent

What could possibly go wrong.

Nobody has ever tried this before!

epistasis 1 hour ago | parent

If you loan the person that prints dollars their own dollars back, there's really zero risk of not getting paid back because they can always print dollars and pay you back. The risk is inflation, same as any currency out there.

I take that back there is a risk they decide to burn trust as someone who doesn't honor deals, which is a new risk that didn't really exist at the nation state level a generation ago...

toomuchtodo 1 hour ago | parent

The debtor inflating the debt away is a soft default, even if not a mechanical "true" default of not making a payment.

Yields will rise and reallocation will occur to hedge against this inflation via debasement risk, as investors will manage against inflation adjusted real return versus other investment opportunities.

epistasis 50 minutes ago | parent

Well just as bad for international lenders as inflation is the devaluation that Trump intentionally caused. We have the worst deficits ever, zero appetite for even acknowledging that there exist, and only massive plans for double digit percentage increases in the deficit on the tab.

It was a mad strategy both cause more inflation with overspending and devalue the dollar! The traditional route for nation state debt management is to grow your economy to make the debt smaller, not make your currency worth less while contracting the economy by deporting a huge chunk of your workers.

toomuchtodo 48 minutes ago | parent

There is no way to grow the US economy due to structural demographics except immigration levels the US electorate is unwilling to accept. We have long ago exceeded the debt we could accumulate based on the future growth curve inherent to the prime working age cohort.

The credit card of young workers and a growing population ("demographic dividend" in demographics parlance) has hit its limit to spend against, broadly speaking. You can either pay down the sovereign debt with higher taxes, default on it, or inflate it away. Growth is over, growing out of the debt will be impossible.

Terra Incognita: The Economics of a Shrinking World [pdf] - https://news.ycombinator.com/item?id=49352811 - August 2026

> "As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women. We fit a single-factor model to 236 countries since 1950: the common component peaked in 1978, and what drives fertility down today are country-specific trends, 219 of them negative and not one leveling off. None of the commonly cited mechanisms can account for this pattern, so we offer a conjecture: modernity itself, which makes a third child expensive and childlessness cheap. Children come in integers, so it takes very little to move a cohort’s fertility rate from 1.8 to 1.3. And nothing in an economy pushes fertility back to 2.1. We close with the main economic consequences, in particular slow growth."

The demographic future of humanity: facts and consequences [pdf] - https://news.ycombinator.com/item?id=44866621 - August 2025 (400 comments) (slides 31-33 of this PDF)

More US Counties See Population Drops Under Trump’s Immigration Crackdown - https://www.bloomberg.com/news/articles/2026-03-26/us-census... | https://archive.today/OGwWj - March 26th, 2026

The US Is Flirting With Its First-Ever Population Decline - https://www.bloomberg.com/news/articles/2026-01-30/trump-imm... | https://archive.today/LdA0d - January 30th, 2026

Goldman Strategists See US Stocks Lagging All Peers Next Decade - https://www.bloomberg.com/news/articles/2025-11-12/goldman-s... | https://archive.today/aINUx - November 12th, 2025

(think in systems)

fragmede 33 minutes ago | parent

> the US electorate is unwilling to accept

is unwilling, or has been told to be afraid of?

toomuchtodo 33 minutes ago | parent

It is irrelevant if the votes and elections continue to the outcome stated. "If this then that." Japan is equally xenophobic towards immigrants, with similar immigration flow outcomes. Do they care? They do not.

echelon 11 minutes ago | parent

> There is no way to grow the US economy

AI and robotics.

Engineering is becoming cheaper.

Graphics design is becoming cheaper.

Lawyering is becoming cheaper.

Entertainment, film, and gaming (not hardware) is becoming cheaper.

This will eventually hit manufacturing and logistics and critical inputs.

We'll be able to have an entire robotic supply chain domestically save for raw materials.

It will hit drug design and medicine. Physics and materials science.

We'll increase the supply of energy, develop cheaper and more cost effective transportation.

The improvements will pay dividends. They'll buy further improvements.

toomuchtodo 10 minutes ago | parent

Provide a date and resolution criteria, I'll bet you $10k to a charity of the winner's choice via longbets.org. This is cope imho. Words are cheap. We'll get this about the same time as Full Self Driving ("Supervised"). "3 months maybe, 6 months definitely." [1] Your comment is hopeful sci-fi aspirations, without any guarantees.

[1] https://x.com/elonmusk/status/823727035088416768 - January 23rd, 2017

epistasis 11 minutes ago | parent

The self-destructive ess of the current regime in the US is astounding. Through control of media channels, a cabal gained power through fear mongering and false narratives, with the hope of wealth through corruption once in power. But the vehicle that drove them to power is now headed off a financial cliff and there's no one at the wheel that can steer.

rob74 47 minutes ago | parent

One contributing factor might be that AI companies are raising money via (amongst other methods) also issuing bonds, which might compete with government bonds.

smallmancontrov 22 minutes ago | parent

The system was always working, ZIRP was the market screaming that it had more capital than things to do with the capital. Of course, thinking about this too hard quickly leads to the idea of rolling back some of the enormous tax and policy privileges granted to capital, so it was critical for us to not think about it too hard.

2OEH8eoCRo0 1 hour ago | parent

"I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody."

- James Carville

pjc50 1 hour ago | parent

The war(s), especially with the impact on pipelines and the Houthis taking over more of Yemen, are finally affecting fuel prices and hence turning the global economic outlook less positive.

You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.

danans 1 hour ago | parent

> You can print money, but you can only ""print"" oil for a short time from reserves, which the US and China have been draining.

What's different between the two is that apparently China hasn't made an equivalent dent in its oil reserves, despite no significant reduction in travel, and despite reducing its import demand by 1 OPEC.

It's not entirely clear how - but theories include shifts from flights to train travel and shifts from gasoline cars to EVs.

Apparently the main reason they have started buying crude again is not for internal consumption as much as taking advantage of the massive crack spread in refined petroleum products (like diesel) which they export.

ethagnawl 40 minutes ago | parent

> It's not entirely clear how - but theories include shifts from flights to train travel and shifts from gasoline cars to EVs.

From a distance, those look like pretty sound theories.

It's wild that the pols and talking heads in the US have been screeching about how "dangerous" China is since the 90s (I remember family members making crude jokes about why I should be learning Mandarin instead of Spanish in middle school) and, yet, here we are doing everything we can to hand them the reins of world power.

pjc50 38 minutes ago | parent

> China hasn't made an equivalent dent in its oil reserves

I think the easiest explanation is that this probably isn't true. The US SPR is underground, it would be quite easy for China to manage its equivalent in secret, for whatever reasons.

The Chinese EV shift is real and significant, though.

whateveracct 1 hour ago | parent

Not just reserves, but also all the oil already on ships slowly making its way to its destination. I think I even saw someone predict that around September, the oil issue would get worse due to how slowly those ships move.

Onewildgamer 19 minutes ago | parent

Are you referring to this https://www.youtube.com/watch?v=Jf3rHAXOZj0

rdm_blackhole 58 minutes ago | parent

France is in a dire situation right now.

10y OAT are at 4.5% and rising with almost 100bps difference with Germany and no budget for 2027 since there is no majority in the parliament.

There is also a 6% deficit expected and growth has been revised down to 0.4% although during the first 6 months of 2026 there was actually a decrease of 0.2% of GDP in total so finishing the year in recession is totally possible.

Unemployment could also reach around 9% (15% in real terms if you count the people who have given up and/or been removed from the stats since they ran out of benefits).

Finally gasoline could reach 3 euros/liter (USD $13 per gallon) before the end of the year (already sitting at 2.5 euros/liter in many parts of France right now).

kingleopold 37 minutes ago | parent

more social security will fix this I think? they need to spend 100Billion more on that so long term they can go into more debt.

/s

skybrian 57 minutes ago | parent

They have different kinds of risk, but do AI investments and bonds compete for investors?

huurtehoog 49 minutes ago | parent

Yes there's only so much credit on offer and the rising yields precisely when corporate debt is skyrocketing to finance massive data center expansion would indicate that that is indeed a factor.

Op-eds claiming the opposite because "trust me bro" would also make me inclined towards the "data center build out for AI factors in for rising yields in sovereign debt"

pydry 44 minutes ago | parent

iirc data center construction investments are largely bond funded so this will absolutely fuck them.

neilwilson 31 minutes ago | parent

Only in the secondary market. In the primary market they require different types of money for settlement.

If you buy an AI issue, then the AI company has the bank deposit and the bank still has the matching reserves needed to buy government bonds in the primary market. All that changes is the ownership tag on the bank deposit.

skybrian 18 minutes ago | parent

But looking one step back, the investor might need to sell something else to raise cash to buy the stock?

I suppose in that respect, all investments compete.

unddoch 39 minutes ago | parent

It becomes clearer to more people that it's impossible to predict the future shape of the global economy due to AI.

The more clear it is, the cheaper 30 year bonds become.

sekai 28 minutes ago | parent

> It becomes clearer to more people that it's impossible to predict the future shape of the global economy due to AI.

You mean due to Trump? Tariffs and Iran war caused this.

jeffbee 27 minutes ago | parent

It's clear that it is impossible to judge how stupid the American electorate is

throw0101c 37 minutes ago | parent

Italian and Greek bonds now have lower yields/rates (i.e., considered lower risk(?)) than US bonds:

* https://www.investing.com/rates-bonds/

Cruncharoo 28 minutes ago | parent

Sort of. You also have to consider exchange rate futures, the value of the currency you will be getting paid in may change dramatically.

seanmcdirmid 23 minutes ago | parent

Is the euro doing or expected to do something strange?

wongarsu 20 minutes ago | parent

Maybe the USD is expected to lose value against the euro?

Cruncharoo 19 minutes ago | parent

Not sure, not my domain. My comment was just highlighting that comparing the yields on two sovereign bonds with the same maturity doesn’t necessarily mean one is riskier than the other, there are other factors.

zeroonetwothree 10 minutes ago | parent

Rates also encode inflation expectations. So it may be that inflation is expected higher in the US

mono442 8 minutes ago | parent

The ECB keeps its interest rate much lower (2,4%) than the FED (3,75%).

32oqa9 26 minutes ago | parent

The US will continue to starve the world of oil and natural gas as long as the stock market goes up.

Notice that the stock market is at all time highs because 50% of the economy is grift now and not real. That is why Republicans go into vast deficit spending to pump up AI and worthless "high-tech", "disruptive" defense stocks.

Trump (and British pound saboteur Bessent) don't care one bit if the US plebs and the rest of the world suffer. The game is printing money, give it to grift companies like AI, have family invest early and get out if everything collapses. Probably they get into real estate cheaply due to foreclosures.

podocarp 20 minutes ago | parent

Turns out countries with constitutions forbidding excessive debt are quite smart. It's like phone addiction -- if the parents don't lead by example and strictly enforce "no phones at the dinner table" then slowly it's just gonna creep back in and everyone's just staring at their phones again.

Synthetic7346 7 minutes ago | parent

Not working so well for Germany

https://youtu.be/ajH6YVhdOZU?is=Xht8Qsd_eGqnS7wW