The New York Times – How a U.S. Debt Downgrade May Affect Consumers HOME LOANS AND CREDIT CARDS Fixed-rate mortgages generally track the 10-year Treasury note, whose interest rates would rise in the event of a downgrade. “The concern behind rates rising comes from the risk that investors — foreign and domestic — would rush… Continue reading U.S. Consumers And A U.S. Downgrade
<Click on chart for larger image> The New York Times – U.S. Housing Prices Remain Weak Home prices in the United States rose ever so slightly for the second consecutive month in May, but the real estate market still has a long way to go before a recovery, analysts said on Tuesday. The private Standard… Continue reading Paul Krugman’s Revisionist History
Reuters.com – Analysis: QE3 may do more harm than good There may be a point at which global investors get indigestion from U.S. money printing. A fresh round of U.S. monetary easing may even do more harm than good for long-term investors as another flood of easy money into fast-growing emerging economies risks refueling oil… Continue reading QE3
Bloomberg.com – Scott Minerd: Europe Needs to Overcome Its Cognitive Dissonance As long as economic and fiscal reforms remain unaddressed, the darkest hours of the crisis still lie ahead. Eventually, the darkness will give way to the dawn of a structural solution. In this new day, a fiscal framework will emerge across the common currency,… Continue reading Europe
The Wall Street Journal – Downgrade Threat Looms U.S. Could Lose Top Rating; Obama Issues Stark Warning as Boehner Slams Spending Financial markets on Monday began taking seriously the prospect of a downgrade of the U.S.’s triple-A credit rating, which it has held for nearly a century. … A top S&P official met with lawmakers… Continue reading A U.S. Downgrade Could Happen
Zero Hedge (blog) – CME Celebrates America’s Ever Nearer Date With Insolvency By Raising Collateral Haircut On Treasurys We just heard two very useless speeches by two very useless Wall Street muppets. Both were, naturally, completely irrelevant. Now comes the important stuff, courtesy of a press release a few hours ago from the CME. Up… Continue reading Clearinghouse Moves
Comment As we wrote last week, S&P recently put a range of AAA-rated financial firms on negative credit watch, including Fannie and Freddie as well as a number of insurers and clearinghouses. A list of the insurance companies put on negative watch can be found in the story below. Reuters – (July 15, 2011) S&P… Continue reading Why Insurance Companies Are At Risk Of Downgrade Along With The U.S.
Bloomberg.com – U.S. May Have Enough Cash to Delay Aug. 2 Deadline for Default The U.S. Treasury Department may have enough cash to pay the government’s bills for days or even weeks if Congress fails to raise the debt limit before an Aug. 2 deadline, say analysts at UBS AG (UBSN) and Barclays Capital. The… Continue reading The August 2 Deadline
Bloomberg.com – FHA May Be Next in Line for Bailout The nationwide decline in house prices has created a vacuum in the U.S. mortgage market. Private financing for home loans has all but dried up and the U.S. government is now guaranteeing almost every new mortgage. Fannie Mae and Freddie Mac have received most of… Continue reading The FHA Has Taken The Place Of Fannie & Freddie
The Wall Street Journal – Why the Fed Is Not Independent In the wake of the financial crisis and the Federal Reserve’s response, the central bank has come under increased scrutiny and criticism. Fed supporters put up a spirited defense, emphasizing the need to save the institution’s independence. Chairman Ben Bernanke says the Fed’s independence… Continue reading Federal Reserve Independence
The Financial Times – Separating corporate from sovereign debt Even if the US government loses its triple A rating, some strong US-based companies with global footprints could retain that rating. The FT’s Gillian Tett talks to Michael MacKenzie about rating agencies’ separation of sovereign and corporate debt ratings, and what that says about faith in… Continue reading Sovereign Debt vs. Corporate Debt