Actions Speak Louder Than Words.... The Bond Market.

[Murf76]

March 25, 2010
Bond Markets Reflect the True Cost of Obamacare
By Michael Barone

Not many people noticed amid the Democrats' struggle to jam their health care bill through the House, but in recent weeks U.S. Treasury bonds have lost their status as the world's safest investment.

The numbers are pretty clear. In February, Bloomberg News reports, Berkshire Hathaway sold two-year bonds with an interest rate lower than that on two-year Treasuries. A company run by a 79-year-old investor is a better credit risk, the markets are telling us, than the U.S. government.

Buffett's firm isn't the only one. Procter & Gamble, Johnson & Johnson and Lowe's have been borrowing money at cheaper rates than Uncle Sam.

Democrats wary of voting for the health care bill may have been soothed by the Congressional Budget Office's report that it would reduce federal deficits over the next 10 years. But bond buyers know that the Democrats gamed the CBO system to get a good score.

(more...)
RealClearPolitics - Bond Markets Reflect the True Cost of Obamacare

You can fool some of the people some of the time... but when CASH is on the line, not so much.

Barone is right. Bond buyers recognize that Democrats gamed the CBO. But I think it's going to end up being bigger than just this incident with the healthcare bill. Congress has burnt its credibility. Hence, we see diminished trust from investors. There's a recklessness in Washington that's presenting a direct threat to our economic future. And when we remove the political rhetoric from the equation, when we look to see what people DO rather than what they SAY... we can see that we've got a problem coming our way... another indicator that our AAA-rating is at risk.

 

[Xenophon]

Trusting america is a bad risk.

And you shitheads wonder why we protest the government.

 

[Murf76]

Trusting america is a bad risk.

And no wonder....

Obama Spending Plan Underestimates Deficits, Budget Office Says

By Brian Faler

March 6 (Bloomberg) -- President Barack Obama’s budget proposal would create bigger deficits than advertised every year of the next decade, with the shortfalls totaling $1.2 trillion more than the administration projected, according to the Congressional Budget Office.

The nonpartisan agency said yesterday the deficit will remain above 4 percent of the nation’s gross domestic product for the foreseeable future while the publicly held debt will zoom to $20.3 trillion, amounting to 90 percent of GDP by 2020. By then, interest payments on the debt will have quadrupled to more than $900 billion annually, the report said.

Deficits between 2011 and 2020 would total $9.76 trillion, the CBO said.

Economists generally consider deficits topping 3 percent of GDP to be unsustainable because that means government debt is growing faster than the ability to pay back the money.

(more...)
Obama Spending Plan Underestimates Deficits, Budget Office Says - Bloomberg.com

U.S., U.K. Move Closer to Losing Rating, Moody’s Says (Update1)

By Matthew Brown

March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

(more...)
U.S., U.K. Move Closer to Losing Rating, Moody?s Says (Update1) - Bloomberg.com

So... we see between these two stories that the problem Moody's cites as a threat to our AAA-rating is interest on the debt and that the debt is GROWING out of control.

 

[Xenophon]

Trusting america is a bad risk.

And no wonder....

Obama Spending Plan Underestimates Deficits, Budget Office Says

By Brian Faler

March 6 (Bloomberg) -- President Barack Obama’s budget proposal would create bigger deficits than advertised every year of the next decade, with the shortfalls totaling $1.2 trillion more than the administration projected, according to the Congressional Budget Office.

The nonpartisan agency said yesterday the deficit will remain above 4 percent of the nation’s gross domestic product for the foreseeable future while the publicly held debt will zoom to $20.3 trillion, amounting to 90 percent of GDP by 2020. By then, interest payments on the debt will have quadrupled to more than $900 billion annually, the report said.

Deficits between 2011 and 2020 would total $9.76 trillion, the CBO said.

Economists generally consider deficits topping 3 percent of GDP to be unsustainable because that means government debt is growing faster than the ability to pay back the money.

(more...)
Obama Spending Plan Underestimates Deficits, Budget Office Says - Bloomberg.com

U.S., U.K. Move Closer to Losing Rating, Moody’s Says (Update1)

By Matthew Brown

March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

(more...)
U.S., U.K. Move Closer to Losing Rating, Moody?s Says (Update1) - Bloomberg.com

So... we see between these two stories that the problem Moody's cites as a threat to our AAA-rating is interest on the debt and that the debt is GROWING out of control.

Its beyound growing, its gone.

Barrycare was the final gut shot, within 8 years we won't be able to pay the interest let alone touch teh principal of the debt.

 

[Murf76]

Its beyound growing, its gone.

Barrycare was the final gut shot, within 8 years we won't be able to pay the interest let alone touch teh principal of the debt.

Well, yeah. I don't believe these estimates are inclusive yet of this healthcare fiasco. This thing has GOT to be repealed. And we've got to put REAL SOLUTIONS in place that actually reduce the costs of healthcare, so the economy can rebound. We need to call back as much of the reckless spending as we can, overhaul entitlement spending, and trim every scrap of fat from the budget we can find.

 

[Claudette]

Trusting america is a bad risk.

And no wonder....

U.S., U.K. Move Closer to Losing Rating, Moody’s Says (Update1)

By Matthew Brown

March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

(more...)
U.S., U.K. Move Closer to Losing Rating, Moody?s Says (Update1) - Bloomberg.com

So... we see between these two stories that the problem Moody's cites as a threat to our AAA-rating is interest on the debt and that the debt is GROWING out of control.

Its beyound growing, its gone.

Barrycare was the final gut shot, within 8 years we won't be able to pay the interest let alone touch teh principal of the debt.

I totally agree.

One has to wonder whats next out of the hat for OL'BO and how much it will cost the taaxpayers??

Immigration reform??

Takeover of the Financial sector??

Crap and Trade??

Gotta wonder.

 

[Murf76]

I totally agree.

One has to wonder whats next out of the hat for OL'BO and how much it will cost the taaxpayers??

Immigration reform??

Takeover of the Financial sector??

Crap and Trade??

Gotta wonder.

Obama's agenda is just a hit parade of job killers. There can be no growth without stability. And everything he does destabilizes the economy, making it impossible for employers to pull together a comprehensive business plan.

 

[Gatekeeper]

How come so many in here,USMB, can see what the heck is going on with our economy, yet in Washington D.C. we have elected, some, people who, by all appearances, are fiscally blind and stupid, politically and internationally naive and let's not forget arrogant, and as an added bonus, have some festering nodule for brains.

And many believe because the stock market, has the appearances of doing well in short term, that it's the average American citizen confidence, buying back into America........NOT......... I believe it's another 'market bubble' in the making.

 

[Truthmatters]

Michael Barone is a right wing shill

 

[Soggy in NOLA]

How come so many in here,USMB, can see what the heck is going on with our economy, yet in Washington D.C. we have elected, some, people who, by all appearances, are fiscally blind and stupid, politically and internationally naive and let's not forget arrogant, and as an added bonus, have some festering nodule for brains.

And many believe because the stock market, has the appearances of doing well in short term, that it's the average American citizen confidence, buying back into America........NOT......... I believe it's another 'market bubble' in the making.

This current group in DC are Marxists, they believe in centralized/command economies.. Never mind that they can't cite one sucess, they believe that you just have to "make it so".

And yes, there is a major bubble in the making... the stock market will collapse again this fall and there is another round of bank failures coming as the Administration puts futher pressure on banks to keep risky loans afloat.

 

[Soggy in NOLA]

Michael Barone is a right wing shill

And you are a left-wing imbecile. Have fun with that, I know we sure do!!!

 

[Murf76]

......... I believe it's another 'market bubble' in the making.

I do too.

 

[Soggy in NOLA]

"The essence of the Liberal outlook lies not in what opinions are held, but in how they are held: instead of being held dogmatically, they are held tentatively, and with a consciousness that new evidence may at any moment lead to their abandonment." -Bertrand Russell

Translation.... "I have no real principles"