Posts Tagged ‘ Debt ’

The Road to Default: Whaa???

July 29, 2011
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The Road to Default: Whaa???

Okay so here is what has been happening:The yield curve has been going through a mad flattening- indicating that investors are "flying to safety" and that a recession may be looming around the corner. Why has it been flattening? Well, a string of bad n...

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The Road to Default: Puppy Power!

July 18, 2011
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The Road to Default: Puppy Power!

Although Congress can technically dilly dally until August 2nd to come up with an agreement and raise the debt ceiling- markets have anticipated the inevitable. They haven't sat back and decided to wait till August 2nd to panic- they are already in "oh...

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The Road to Default: Deep DooDoo

July 16, 2011
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The Road to Default: Deep DooDoo

Okay so what is the situation at hand? Well the inevitable default of the United States of course.  The U.S. will default regardless of whether Congress raises the debt ceiling. You may be thinking the following: But how can he say such a thing? I...

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The Road to Default: Debt Ratio Comparison’s With Previous Episodes

July 11, 2011
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The Road to Default: Debt Ratio Comparison’s With Previous Episodes

In 2009, Carmen M. Reinhart and Kenneth S. Rogoff wrote a book titled ,"This Time Is Different" about debt and financial crisis. One of their charts will provide a benchmark for us in our analysis.  This chart can be found on page 121 of the book ...

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The Road to Default: Who’s getting the most screwed?

July 10, 2011
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The Road to Default: Who’s getting the most screwed?

Let's take a look at who gets the most screwed (who loses the most money) when bond prices collapse and the United States defaults.Well until recently only about 55% of treasury's were held domestically. The rest was externally held by places like Japa...

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The Road to Default: We Crumble Like A Cookie

July 9, 2011
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The Road to Default: We Crumble Like A Cookie

What should we be expecting when the United States defaults and how will this unsavory process unfold? Well for one thing anticipate the downfall with a downgrade in the credit rating.  According to recent Bloomberg article in the event of a U.S. ...

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The Road to Default: Let’s Look at the Damage with a Rant.

July 8, 2011
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The Road to Default: Let’s Look at the Damage with a Rant.

The following graph shows Real GDP as a percentage of the Gross Federal Debt.  FRED is the resource I frequently use for United States financial data and it serves us well here.  What is Gross Federal Debt? Well, its total government debt out...

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