“Norges Bank Investment Management said in a letter to the country’s finance ministry on Tuesday that it recommended reducing the weighting of government debt in the fund’s benchmark bond index from 70 per cent to 50 per cent.
…
A lower Treasury allocation for Norway’s Government Pension Fund Global would be offset by purchases of riskier fixed-income products, particularly debt such as mortgage-backed securities.
…
These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early” [1].
"NBIM plans to increase its holdings of nongovernment U.S. fixed income, such as corporate bonds, to 27.6% from 16.2%.
CEO Nicolai Tangen and Norway’s central bank chief, Ida Wolden Bache, said the fund could earn higher premiums by diversifying into riskier assets, such as mortgage-backed securities, which they judge as well positioned to weather as a long-term investor."
> The truth is we need to drastically shrink the size of the federal government.
The GOP and DOGE tried that and the national debt has since skyrocketed due to corruption and illegal wars. So much for those $5,000 DOGE Dividend checks Elon and Trump were discussing.
Smaller federal government doesn't mean a less corrupt government, just a less useful government to the average American struggling to make ends meet.
Indeed, but as US treasuries yield go, so do mortgage rates. Do mortgage backed securities carry more risk than US treasuries? Maybe not. Those with mortgages are highly incentivized to continue to pay their mortgages every month, while the US government doesn't appear willing to stop growing the debt. The quote in JumpCrisscross' comment explains this:
> These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early."
TLDR More yield for similar risk profile while pushing up mortgage rates over time (all US consumer debt is priced off of US treasury yields; less demand for treasuries will push up their yields). Watch the 10Y and 30Y curves for where the market thinks rates are going.
“Norges Bank Investment Management said in a letter to the country’s finance ministry on Tuesday that it recommended reducing the weighting of government debt in the fund’s benchmark bond index from 70 per cent to 50 per cent.
…
A lower Treasury allocation for Norway’s Government Pension Fund Global would be offset by purchases of riskier fixed-income products, particularly debt such as mortgage-backed securities.
…
These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early” [1].
[1] https://www.ft.com/content/ecc15aa6-6e7b-409d-8753-2fb6aadd0...
Non-paywalled source [0] confirming this:
"NBIM plans to increase its holdings of nongovernment U.S. fixed income, such as corporate bonds, to 27.6% from 16.2%.
CEO Nicolai Tangen and Norway’s central bank chief, Ida Wolden Bache, said the fund could earn higher premiums by diversifying into riskier assets, such as mortgage-backed securities, which they judge as well positioned to weather as a long-term investor."
[0] https://www.cnbc.com/2026/09/04/worlds-biggest-sovereign-wea...
Since Bush, we've treated the taxpayer funds as unlimited, with the debt ceiling being a minor problem that congress just raises every once in awhile.
The truth is we need to drastically shrink the size of the federal government. Its unbelievably inefficient.
Didn't the American Republicans just run and win on exactly that premise and then largely fail to follow through?
Or you could just not spend any more and increase taxes.
> The truth is we need to drastically shrink the size of the federal government.
The GOP and DOGE tried that and the national debt has since skyrocketed due to corruption and illegal wars. So much for those $5,000 DOGE Dividend checks Elon and Trump were discussing.
Smaller federal government doesn't mean a less corrupt government, just a less useful government to the average American struggling to make ends meet.
Because they want to be exposed to riskier instruments, not because they see any kind of risk in financing the american debt...
Indeed, but as US treasuries yield go, so do mortgage rates. Do mortgage backed securities carry more risk than US treasuries? Maybe not. Those with mortgages are highly incentivized to continue to pay their mortgages every month, while the US government doesn't appear willing to stop growing the debt. The quote in JumpCrisscross' comment explains this:
> These MBS are largely backed by government agencies, meaning Norway’s exposure to the risk of a US government default is only being reduced modestly. They do, however, offer slightly higher yields than Treasuries because of the risk that mortgages are repaid early."
TLDR More yield for similar risk profile while pushing up mortgage rates over time (all US consumer debt is priced off of US treasury yields; less demand for treasuries will push up their yields). Watch the 10Y and 30Y curves for where the market thinks rates are going.
(think in systems)
If the U.S. defaults it’s likely the economy would go to shit or see high inflation. Either way your f’d
Yeah, I'm just watching where on the fucked meter we're currently at. Happens slowly, then all of a sudden.
Trump says he will cease trading with top partners unless Fed lowers rates - https://www.cnn.com/2026/09/04/economy/trump-trade-fed - September 4th, 2026
I do like that Hemmingway quote... https://medium.com/thought-thinkers/what-happens-gradually-t...
the people in power now never read Hemingway.
People complain about the kids not reading... I agree more with you. Boomer don't read either.
There's a big sell off looming.