Sunday, May 31, 2009

They’re back.

“Ten trillion dollars over the next 10 years is just an indication that Washington is really out of control and that there is no fiscal discipline whatsoever.”
Edward Yardeni, head of Yardeni Research Inc. - coined the term “bond vigilante” in 1984 to describe investors who protest monetary or fiscal policies they consider inflationary by selling bonds.
By Liz Capo McCormick and Daniel Kruger
May 29 (Bloomberg)
For the first time since another Democrat occupied the White House, investors from Beijing to Zurich are challenging a president’s attempts to revive the economy with record deficit spending. Fifteen years after forcing Bill Clinton to abandon his own stimulus plans, the so-called bond vigilantes are punishing Barack Obama for quadrupling the budget shortfall to $1.85 trillion. By driving up yields on U.S. debt, they are also threatening to derail Federal Reserve Chairman Ben S. Bernanke’s efforts to cut borrowing costs for businesses and consumers.


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