Knee Jerk effect only, will not be so serious within three days on the end of July 2011. Not too worry, about it, in fact is the best buying or bargain hunting opportunities during that few days period of time! Be ready to do that!
Really?They saydefault -- and by extension, the debt limit -- violates the 14th Amendment.
Treasury Secretary Tim Geithner read aloud from the Constitution at a Politico breakfast last month.
NEW YORK (CNNMoney) -- Amid fears the United States risks default if lawmakers don't raise the debt ceiling on time, some are suggesting President Obama could save the day by big-footing Congress.
How? By invoking the Constitution anddirecting Treasury Secretary Tim Geithner to keep borrowing even if it means going past the statutory borrowing limit.
The amendment states: " The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
Americans say that the $14.3 trillion U.S. debt threatens the economy and that entitlement programs may go broke even as they dismiss as “scare tactics” the arguments offered by Republicans and Democrats who are debating a solution.
More than 60 percent of those surveyed say that interest on the debt may lead to a recession and that the rising costs of Medicare and Social Security represent real dangers, according to the poll conducted June 17-20.
Public skepticism extends to the negotiations in Washington between the White House and congressional Republicans to reach a deal on reducing spending and raising the nation’s debt limit. In the past, Congress has lifted the debt ceiling to allow the government to borrow more money without debate.
This year, Republicans are using the once pro-forma vote as an opportunity to press for spending reductions, an issue that normally is negotiated separately. Treasury Secretary Timothy Geithner has said he will run out of options for staving off a default by Aug. 2, 2011.
“Every year you’ve got more and more people getting on the govt bill and more borrowing, now less and less people is paying,” said Jason Gibson, 28, a truck driver from Romulus, Michigan. “You get too many people on one side of the ship, it’s going to tip.”
CNNMoney -- Greece has pulled itself back from the brink for now by agreeing to a painful austerity package.
On Thursday, lawmakers are set to vote on how to implement those unpopular reforms. Then the country is expected to secure the final $17 billion of a $156 billion international relief package to pay its bills for the next three months.
The latest cash infusion means Greece will be able to stave off an immediate default. But is not out of the woods. Giving some short-term relief to markets
Greece is now expected to begin negotiations with the European Union and International Monetary Fund for another bailout, said Wolfango Piccoli, a director at the Eurasia Group in London.
" The next round of emergency aid is expected to range between $172 billion and $216 billion, which would cover Greece's expenses through 2014," as with the previous deal, the new package will come with conditions.
Officials in EU are hoping to keep Greece solvent long enough to allow other troubled European nations to strengthen and put pressure on Greece to enact the painful reforms passed Wednesday.
At the same time, the European Union is working with Greece's main creditors -- French and German banks -- to roll over some of the nation's debt into longer-term bonds.
" It's unclear how that will be done, on the part of the banks, said Piccoli. " But that's just another measure to gain time, it doesn't diminish the amount of debt that Greece will be left with."
In others words, get ready for more debt rolling over...Whether in time for in favour of PIIGs or in favour of lenders. Time shortly will tell.
Failure to vote for austerity would, essentially, be a move to put the ball back in the court of Europe.
If aid of 12 billion is to come in....the money will not last after Aug and the more debt will be needed (more loan is need) This time...A propose to ROLL over for 5 years.
teeth53 ( Date: 27-Jun-2011 14:48) Posted:
Dear Folks,
Here is a real chance for Greece to pass a new austerity bill this week, which would mean (in theory) that it is possible get more bailout money, which would mean no imminent default.
According to Kathimerini, there are now 4 PASOK (Papandreou's ruling party) MPs who have signalled their opposition to the measure, at least on some level.
Some are apparently concerned about details, and haven't come out firmly against the plan. It's possible some or all could come back as it is unfolding.
However...read this.
PASOK has 155 seats out of 300 in the Hellenic Parliament, (the vote could be down to a margin of 1.) On Friday, MP Thomas Robopoulos came out against the bill.
Now just to war-game things out a little, oneself have to ask whether the rest of Euro will let Greece default, even if the measure isn't passed. After all, the " bailout" is primarily for the sake of European banks and the other PIIGS.
Here is a real chance for Greece to pass a new austerity bill this week, which would mean (in theory) that it is possible get more bailout money, which would mean no imminent default.
According to Kathimerini, there are now 4 PASOK (Papandreou's ruling party) MPs who have signalled their opposition to the measure, at least on some level.
Some are apparently concerned about details, and haven't come out firmly against the plan. It's possible some or all could come back as it is unfolding.
However...read this.
PASOK has 155 seats out of 300 in the Hellenic Parliament, (the vote could be down to a margin of 1.) On Friday, MP Thomas Robopoulos came out against the bill.
Now just to war-game things out a little, oneself have to ask whether the rest of Euro will let Greece default, even if the measure isn't passed. After all, the " bailout" is primarily for the sake of European banks and the other PIIGS.
Just when i thought only Singapore have gerrymandering
CHICAGO (Reuters) - Illinois Democratic Governor Pat Quinn signed into
law on Friday a new congressional district map that could reverse gains
Republicans made in the state in 2010 midterm elections.Democrats.
Americans say that the $14.3 trillion U.S. debt threatens the economy and that entitlement programs may go broke even as they dismiss as “scare tactics” the arguments offered by Republicans and Democrats who are debating a solution.
More than 60 percent of those surveyed say that interest on the debt may lead to a recession and that the rising costs of Medicare and Social Security represent real dangers, according to the poll conducted June 17-20.
Public skepticism extends to the negotiations in Washington between the White House and congressional Republicans to reach a deal on reducing spending and raising the nation’s debt limit. In the past, Congress has lifted the debt ceiling to allow the government to borrow more money without debate.
This year, Republicans are using the once pro-forma vote as an opportunity to press for spending reductions, an issue that normally is negotiated separately. Treasury Secretary Timothy Geithner has said he will run out of options for staving off a default by Aug. 2, 2011.
“Every year you’ve got more and more people getting on the govt bill and more borrowing, now less and less people is paying,” said Jason Gibson, 28, a truck driver from Romulus, Michigan. “You get too many people on one side of the ship, it’s going to tip.”
The Bloomberg National Poll, conducted June 17-20, shows reputation of Bernanke, who led the central bank through the longest U.S. recession since the Great Depression, has slid lower as the unemployment rate has remained stuck near 9% or higher for 26 consecutive months.
“It’s a reflection of the fact that most Americans still don’t feel the economy is in recovery,” said Greg Valliere, chief political strategist at Potomac Research Group in Washington.
The survey also shows a politically polarized view of the central bank chairman. Bernanke is viewed favorably by 24% of Republicans and unfavorably by 32%. Those numbers are flipped with Democrats, 36% of whom view him positively and 16%negatively.
Appointed by Bush
Bernanke, 57, himself a registered Republican, became chairman of the Fed in February 2006, after being appointed to head the central bank by President George W. Bush. He was renominated by President Barack Obama and confirmed for a second term in January 2010.
The poll was conducted before the central bank’s meeting June 21-22 in which policy makers confirmed the end of their $600 billion bond-purchase program and renewed a pledge to hold interest rates near zero for an “extended period.”
Central bankers also cut their forecasts for growth this year and next and raised their estimates for unemployment. At press time, the Fed’s chairman, Bernanke said that “we don’t have a precise read on why this slower pace of growth is persisting.”
“Some of these headwinds may be stronger and more persistent than we thought,” who also served as chairman of Bush’s Council of Economic Advisers.
‘Walked on Water’
“Two years ago he walked on water -- he extricated us from financial crisis and prevented a return to the Great Depression,” said Alan Levenson, chief economist of T. Rowe Price Group Inc. in Baltimore, which has almost $510 billion in assets under management, including those of more than 1 million retail investors.
“Now he’s saying unemployment is unacceptably high, but he’s not having as much success with that,” Levenson said. “To the man on the street, he had it going in 2009 but lost his touch.”
In November of 2010, the Fed began the second round of its quantitative easing program in an attempt to boost growth, avert deflation and bring down the unemployment rate.
Confronting Crisis
During Bernanke’s tenure, the central bank confronted a financial crisis that led to the collapse of Wall Street firms such as Bear Stearns Cos, Lehman Brothers Holdings Inc. and American International Group Inc. In the course of the 18-month recession that followed, the Standard & Poor's 500 Index dropped 57 percent from its record in October 2007.
The Federal Reserve undertook $3.3 trillion in emergency lending during the crisis and cut interest rates to a range of zero to 0.25 percent. To support the housing market, it launched a plan to purchase $1.43 trillion in housing debt.
All eyes and ears will be on Ben Bernanke tomorrow, and everyone will be listening and analyzing every single words, dissecting it a million different ways.
The Federal Open Market Committee (FOMC) is holding its two-day meeting which starts today, and the decision will be released tomorrow at 12:30 p.m.
WASHINGTON: Crucial high-level talks on raising the US borrowing limit collapsed after Republicans walked out, accusing the White House of provoking an impasse with demands to raise spending and taxes.
The move sparked fears that Congress will fail to raise the 14.29 trillion dollar debt ceiling by an August 2 deadline and cause the United States to default on its obligations, sending shockwaves through the global economy.
Federal Reserve have yet to answer the inquires on the missing 9 trillion dollar exposed last December 2010
www.youtube.com/watch?v=GYNVNhB-m0o
Last bailout for Greece was seen as a disaster and unless the Greek made a comprehensive change to the gov spending , EU will not likely commit any more loans by July
All eyes and ears will be on Ben Bernanke tomorrow, and everyone will be listening and analyzing every single words, dissecting it a million different ways.
The Federal Open Market Committee (FOMC) is holding its two-day meeting which starts today, and the decision will be released tomorrow at 12:30 p.m.
The FederalOpenMarketCommittee (FOMC) is holding its two-day meeting which starts today, and the decision will be released tomorrow at 12:30 p.m. At 2:15 p.m., Bernanke will hold his second press conference, as Bernanke tries to continue to be more open about FOMC policy, and have a direct dialogue with the average American, as opposed to just the financial markets.
No one expects the FOMC to do anything to the federal funds rate, which is currently 0-0.25%, the language is the key here. $600 billion whale is known as " QE2" is ending soon, and no one in their right mind expects the Fed to announce a " QE3" now. Not unless the markets took a plunge, and the economy slowed to a point where even the tortoise from the " Tortoise and the Hare" was beating it in a race.
Reports have confirmed that the housing market is already worse than the Great Depression, and it does not look like it is going to get better anytime soon.
If we get any mention about an interest rate cap or the " extended period" language is drastically different, than we know that Ben and his crew are setting us up for QE3, and in that case, it's risk on.
Since the Fed can not call it QE3, it will be described as something else, which is the reason for the interest rate cap language. It's QE3 without with the " QE" part.
De-coupling of the global stock markets movement and direction is that we desire now! Let the US and Euro markets down and the rest in the other direction i.e. up up up!
‘High Noon’ U.S. lawmakers are advancing negotiations on reducing the deficit and increasing borrowing limits.
“Progress is being made,” Senator Dick Durbin of Illinois, the 2nd-ranking Senate Democrat, said on NBC’s “Meet the Press” program. “We shouldn’t wait until high noon” to raise debt ceiling be'cos “it will mean higher interest rates if we don’t,” he said.
Greece is in the soup. Are we about to get scalded with the spillover?
The odds say no, thanks to official support for Greece and the European banks that look most apt to suffer in a default. Yet it's clear that the U.S. financial system remains vulnerable to trans-Atlantic aftershocks. Moody's having downgraded three French banks Wednesday for their exposure to Greek debt, and the 2008 crisis having been amplified by problems at a money fund that took big losses on Lehman Brothers notes.
Viral Acharya, a finance prof at New York University's Stern School of Business. " The risk is, if any upset in the money funds again, the people who have put their money there could flee." Which saw after Lehman's failure, funds facing losses could be forced to sell assets to meet redemption requests, starting a disruptive cycle of fire sales.
Euro bank's exposure " is potentially important," that could mean another brush with economic catastrophe, rather than a stock mkt pullback. Banks in France and Germany are certain to take hits if Greek debt goes bad.
Of course, it's impossible to say for sure how vulnerable funds are without looking at what each one holds.
Europe's wholesale bank funding market, which relies in large part on U.S. money market funds could wash Greek problems onto it shores. A Fitch Ratings survey this spring estimated that the top 10 U.S. prime money mkt funds had 44% of their assets in Euro bank debt, ranging from certificates of deposits to short-term loans known as commercial paper and repurchase agreements.
Europe's sickly banks By Colin BarrJune 20, 2011: 6:30 AM ET Trichet's nightmare?
Knocking Europe's banks over with a feather.
That's not exactly a handy characteristic when Greek default seems almost inevitable. Euro policymakers this weekend failed to agree to terms on a 12 billion-euro ($17b) bailout loan due next mth to Greece, warning the Greek govt must 1st show it is taking austerity seriously. Apparently mere riots aren't enough for these guys.
Financial institutions across the Continent share a terrifying trait with Lehman Bro B4 its 2008 collapse: they rely too much on borrowed money, esp the cheap, short-term loans that are vulnerable to a mkt shock. If the EU leverage numbers sound familiar, it's be'cos they are in line with the leverage ratios seen at the big U.S. investment banks b4 the financial mkts started their nervous breakdown in 2007.
Lehman and Bear Stearns, both smallish investment banks that gorged on real estate during the bubble, leveraged at more than 30-1 while Goldman Sachs (GS), Morgan Stanley (MS) and Merrill Lynch were well into the 20s.
What's notable is that, most reckless banks, by measures at least, reside not in gonzo Greece or profligate Portugal, but in the allegedly responsible states at the so-called core of Europe, Germany and France – the very banks that are most exposed to a Greek default, with some 90 billion euros ($129 billion) at stake.
Though it's hard to open the business section lately without finding a story about Germany's economic renaissance, thrift and prudence don't seem to characterize German banks. They hold 32 euros in loans for every euro of capital they have on hand, according to International Monetary Fund data. Lehman's leverage at the time of its collapse was 31-1, if you're keeping score at home. Either way it means a 3% loss leaves the taxpayers picking up the tab. Yes, that again.
The Germans aren't alone in Lehmanville: Belgian banks are using 30-1 leverage and French ones 26-1, the IMF numbers (see chart, right). All told, banks across the 17-country euro area average 26-1 leverage – double the ratio in the US. Against all odds, Euro institutions have managed the nifty trick of making U.S. banks look good.
And in another similarity, the European banks are heavily reliant on short-term market funding, from sources such as the U.S. money funds that are among the biggest wholesale lenders on the planet. History shows that a market panic can make those funds suddenly unavailable, potentially putting an already stretched European Central Bank even more on the spot.
Yet it's not clear the Europeans have picked up just yet on how this year might come to rhyme with 2008. While Germany has backed away from its demand that private sector lenders be forced to accept reduced repayment terms, there is still no sign that Europe's leaders will soon come to their senses and hammer out a package that ends the siege once and for all.
All this tightrope walking is unnerving the staff at the IMF, which warned last week that " though there has been progress on banking system repair, the pace is too slow."
For now, there's no reason to believe a default is imminent or that banks would be unable to handle the Greek storm. Liquidity is still ample and the financial system isn't as hyped up as it was three - four years ago. But the sight of overextended banks in the middle of a crisis is never reassuring, no matter how familiar it may be.
Ireland and Portugal followed Greece in obtaining emergency loans in the past year. Spain’s finances came under the microscope last week, with investors pushing the extra yield on 10-year Spanish bonds to 261 basis points, the highest weekly close since January.
Moody’s Investors Service said June 17 it may cut its Aa2 rating on Italy, with 2010 debt of 119 percent of gross domestic product, Europe’s second highest after Greece.
Greece needs to cover about 4 billion euros of bills maturing between July 15 and July 22, and faces about 3 billion euros of coupon payments in the month, according to Bloomberg calculations. A bigger test comes Aug. 20 when Greece must redeem 6.6 billion euros of maturing bonds.
Ireland and Portugal followed Greece in obtaining emergency loans in the past year. Spain’s finances came under the microscope last week, with investors pushing the extra yield on 10-year Spanish bonds to 261 basis points, the highest weekly close since January.
Moody’s Investors Service said June 17 it may cut its Aa2 rating on Italy, with 2010 debt of 119 percent of gross domestic product, Europe’s second highest after Greece.
Greece needs to cover about 4 billion euros of bills maturing between July 15 and July 22, and faces about 3 billion euros of coupon payments in the month, according to Bloomberg calculations. A bigger test comes Aug. 20 when Greece must redeem 6.6 billion euros of maturing bonds.
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Knocking Europe's banks over with a feather.