James Lavish Profile picture
Aug 23, 2022 4 tweets 1 min read Read on X
If you’ve never heard of a *debt spiral*, it’s time you did,

and ask the question, "is the US already in one?"

Let’s dig in and answer that.

A debt 🧵👇
🏛 The government as a business

Before we get into any debt specifics, let’s first cover the basics of how a government operates financially

And while it’s an absolute beast of an operation, it can be boiled down into some pretty simple parts that mirror a typical company.
First, like any business, a gov't has revenues and expenses and often borrows money using debt

~95% of US gov't revenues come from taxes: individual and corporate income, payroll, and excise taxes

~5% comes from estate taxes, customs, Fed earnings, penalties, and other fees.
Just like a business, there must be enough revenue to cover all expenses for it to keep operating

A budget

And in the business of running a country, taxes should cover all gov't expenses: infrastructure, defense, entitlements, etc., as well as interest payments on its debt.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with James Lavish

James Lavish Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @jameslavish

Jan 15
There was massive hype and fanfare leading up to the #Bitcoin spot-ETF launch.

Yet, the launch didn't quite live up to expectations. There wasn't a tsunami of capital inflow, and there was no 'God Candle'

So, was the #Bitcoin ETF launch a failure?

Time for an ETF 🧵👇
🤓 BTC Launch Stats

First things first, how are the new spot-based Bitcoin ETFs are different from the other Bitcoin ETFs (futures-based) that have been trading for years?
The new Bitcoin ETFs are spot-based and must own actual #Bitcoin to match their NAVs (Net Asset Values)

This makes them far more attractive than futures-based ETFs (paper BTC) for investment advisors and institutions who cannot buy actual #Bitcoin for their clients or portfolios
Read 72 tweets
Dec 28, 2023
The US Treasury just closed out 2023's debt bacchanal with a final 7yr Note auction.

While it wasn't quite abysmal, it was nothing short of dismal.

Time for a quick Treasury 🧵👇
First, remember the last 7yr Note auction in Nov *was abysmal*

- BTC of 2.44
- A 2.1bp tail
- Foreign demand down to 63.9%
- Primary Dealers stuck with 20.3% of auction
How about today's 7yr Note Auction?

- BTC was 2.50, slightly better
- Tail was 2.2bp, slightly worse
- Foreign demand of 63.7%, virtually same
- Primary Dealers took down 16.9%, slightly better
Read 10 tweets
Dec 27, 2023
Markets have ripped higher, up 5% this month, and much of the move came after Fed Chair Powell's last press conference.

The famous 'Fed Pivot'

But what is the Fed Pivot, and what does history tell us about the market and economy *after* a pivot?

Time for a Fed 🧵👇
😏 What is a Pivot?

First, what exactly is The Fed Pivot?

Put simply, when the Fed tightens monetary policy, it raises interest rates and/or sells assets off its balance sheet (i.e., quantitative tightening or QT)

When it stops raising rates, this is called a Fed Pause.
The Fed may or may not continue selling assets (QT) during the pause phase

To date this year, it has continued QT while keeping rates paused

A full pause would mean that The Fed is not just lowering rates, but has also stopped QT.
Read 39 tweets
Dec 12, 2023
Success! It seems that today's 30-Yr Treasury Auction was solid, across the board.

But was it *stellar*?

Time for a short Treasury 🧵👇
Some quick stats:

- BTC was 2.43 vs 2.24 last auction
- No tail, and actually a slight stop-through of .3 bps
- Foreign demand alleviated pressure from primary dealers

Here's a visual comparison vs. the last two auctions: Image
A couple of notes:

1) This was a *re-opening*, strategically making it easier to find liquidity, as it essentially just adds to a prior auction and makes the issue more attractive to buyers.
Read 8 tweets
Nov 28, 2023
The Reverse Repo Facility

Lots of talk about how it's dwindling fast and may soon be empty...but does it really matter?

Yes, it matters. A whole lot more than you may think.

Time for a Fed 🧵👇
🎯 Repo vs Reverse Repo

What are they, and what're their differences?

Put simply, they are two overnight lending markets run by the Federal Open Market Committee (FOMC)

All purchases and sales (open market operations) are made by the NY Fed Open Market Trading Desk (the Desk)
The Repo

A repo is basically a repurchase agreement between two parties

The term can be used in many different types of transactions, but we most often hear it used to describe overnight transactions of US Treasuries.
Read 42 tweets
Nov 14, 2023
Abysmal. Disastrous. Catastrophic.

All terms you may have heard describing the most recent US Treasury Bond auction.

But how bad was it? Did it really almost fail?

Time for a Treasury 🧵👇
🧐 Treasury Spotlight

A couple of weeks ago, the US Treasury made a big announcement on the same day that the Fed voted to keep rates steady

Big news from the Fed, though widely expected

But even bigger news from the Treasury.

Because the Treasury announced expected borrowing of $776B for the 4th quarter of 2023, less than last quarter's rate of $852B

Most importantly, it also announced borrowing more on the short end of the curve versus the long end, releasing this set of auction sizes: Image
Read 53 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!