The Week in Economics and Finance

No disastrous US debt auctions this week, although a huge amount of debt was sold at far higher rates than the debt being replaced.  For now, as long as the rates are high enough, buyers are being found.  The auctions aren’t great, but they haven’t been near disasters.  We will see how long that can be maintained.  This summer has a massive amount of new debt issuance and rollover debt coming due.  The Treasury keeps relying heavily on shorter term debt, which both raises interest costs and means that there will be ongoing large debt auctions for years to come.

The US consumer meanwhile is struggling with large credit card and “buy now, pay later” debt, which is beginning to affect spending.  A number of retail and food companies noted in recent earnings releases that they are seeing signs that many consumers, especially low and middle income persons, are tapped out.  We saw some sign of reality in the labor market as well, with unemployment claims rising above expected levels in the most recent report.  The truth continues to be that the economy is essentially rotten, propped up by excessive and unsustainable government spending.  Good luck when that all comes crashing down.