Tea Party kicks Boehner in the teeth - again

[Riot]

This is a private blog, so you have to vet it yourself. I think the author overstates the impact on bonds.

Wed Jul 27, 2011 at 11:01 AM PDT
Two signs Wall Street is starting to believe in default

First: the price of credit default swaps (CDS) against US treasuries has spiked. And very, very unusually, the price of a one year CDS is now higher than the price of a five year CDS.

Second: the stock market AND the bond market are down today. It is fairly common for investors to rotate from one into the other depending on outlook. When both are down sharply, as is happening today, it means investors are selling everything and keeping their money as money. That is - Wall Street is starting to put their investment money under their mattress.

[ snip]

Once upon a time the default result of a financial panic was called a "flight to quality" - sell stocks and corporate bonds, buy US treasuries. The Republicans have destroyed the image of US bonds as quality. It will be years or decades before that image can be restored.

Also worth noting - US treasuries are sold at auction. No one wants to pay full price for something that is dropping in value like a rock. This will require this week's treasury auctions to sell more bonds to achieve the same level of cash for the government. In other words, the GOP has added to the deficit already, just by playing games.

If the US citizens understood how morally and intellectually bankrupt these elephant scat are, the GOP would cease to exist.

http://www.dailykos.com/story/2011/0...lt?via=siderec

[Danzig]

my concern is with all the investors who must invest in 'safe and secure' investments...most notably insurance companies. the us loses triple a, a lot of selling will have to occur. not good...i cant believe that there has been no deal made.

[Riot]

Originally Posted by Danzig

my concern is with all the investors who must invest in 'safe and secure' investments...most notably insurance companies. the us loses triple a, a lot of selling will have to occur. not good...i cant believe that there has been no deal made.

I can't believe Wall Street would allow that, either. They've already ordered the GOP to raise the darn debt ceiling. I think that's why the market isn't that freaked. Just some people trying to benefit big from little movements (like Coach's billion dollar baby).

[lord007]

Originally Posted by Riot

This is a private blog, so you have to vet it yourself. I think the author overstates the impact on bonds.

Are you a Blog-o-maniac...

[Danzig]

one thing i've learned about ss....

who here knows how long you must work to qualify for full retirement benefits from ss?




you have to earn 40 credits, and you can earn four a year. so, after a glorious ten year run, you qualify for full bennies. medicare, full ss...after TEN years. that is the first change needed on ss reform. you could graduate, work ten years on the books-and guess what you didn't pay enough to get, but you're going to get anyway?? that my friends is ridiculous.

[Riot]

you have to earn 40 credits, and you can earn four a year. so, after a glorious ten year run, you qualify for full bennies. medicare, full ss...after TEN years. that is the first change needed on ss reform.

I didn't think so (but you may be right). Your monthly benefits are pro-rated based upon your lifetime contributions, is my understanding. At least that's what the little paper social security sends me once a year says. Got a link or something?