Hacker News Reader

Comment by alangibson | Hacker News Reader

I don't have faith in much, but I'm sure that the Treasury will make bond holders whole. A substantial default would be the end of global capitalism, and every one of the right wing psychos know it.

View on HN

I predict the Federal Reserve will buy them at close to 100% non-default value while dry heaving over their involuntary involvement in politics. I further predict that those shorting the securities will lose their court case against the Fed, since the action would be protected by the 14th amendment:

Section 4

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

If someone's shorting the security at maturity, there won't be a court case; they'll simply lose money when the inevitable government action redeems the notes at face value via some mechanism.

While it is possible that the United States could default, a naked short to take that position would be like saying, "Hey, I bet you $100 that this steamroller will stop if I jump right in front of it."

If you think the US will default, it might be wiser to go long something that will grow in value in the chaos that would immediately follow.

I wouldn’t be sanguine about the latter — are you paying attention to Florida? Some of them view the destruction of global capitalism as a feature, because they think they’ll have some kind of advantage over everyone else and be immune to the worst of it. Some of them know better but secretly expect the Democrats to save them. Some of them are just frightened of the MAGA mob and lack the moral fortitude to do the right thing.

You're not wrong about some considering it a feature, but there's not a lot of them (Gaetz, Bobert, etc) and they tend so be so stupid that they're not good at much more than getting on TV.

They are the public face of a much more fundamental power structure.

> I wouldn’t be sanguine about the latter — are you paying attention to Florida?

None of the actors in Florida control the federal executive.

Reply on news.ycombinator.com