Global Economy Bursting?

[Randolph Kinney]

Fitch to finish U.S. rating review by end August

http://www.marketwatch.com/story/fitch-to-finish-us-rating-review-by-end-august-2011-08-08

 

[Randolph Kinney]

ECB Buys Italian, Spanish Bonds

http://online.wsj.com/article/SB10001424053111904140604576495642494019216.html?mod=mktw

LONDON—The European Central Bank bought Italian and Spanish government bonds for the first time Monday as it moved to contain the euro-zone sovereign-debt crisis.

 

[Randolph Kinney]

ECB Bond Buying May Reach $1.2 Trillion

http://www.bloomberg.com/news/2011-...illion-in-creeping-union-germany-opposes.html

 

[Randolph Kinney]

Gross Praises S&P’s ‘Spine’ on U.S. Rating Cut

http://www.bloomberg.com/news/2011-...ine-as-buffett-says-rating-company-erred.html

Gross, 67, has said that Treasuries are unattractive because yields don’t offer enough compensation for the risk of inflation. In his monthly investment outlook, published last week, Gross said investors should buy assets of countries with “cleaner dirty shirts” and higher real interest rates, including Canada, Mexico, Brazil and Germany.

 

[Randolph Kinney]

Bond Inflation Gauge Strips Bernanke of Last Year’s Tools

http://www.bloomberg.com/news/2011-...-strips-bernanke-of-last-year-s-tools-2-.html

A measure of traders’ inflation expectations that the Fed uses to help determine monetary policy rose as high as 3.23 percent last week from 2.18 percent in August 2010. Fed policy makers “painted themselves into a box,” said Robert Tipp. “They went to great lengths to say they were concerned about inflation expectations, they were concerned about the risk of deflation, and therefore it was okay to take these extraordinary measures. The hurdles are definitely high here for a QE3.”

The pace of consumer price gains, which totaled 3.6 percent in June from a year earlier, exceeds 10-year yields by more than 1 percentage point, the most since September 2008.

 

[Randolph Kinney]

Muni Market Prepares for Loss of AAA Ratings as S&P Downgrades U.S. Credit

http://www.bloomberg.com/news/2011-...aaa-ratings-as-s-p-downgrades-u-s-credit.html

S&P is likely to cut its ratings on municipal debt secured by the federal government, such as pre-refunded bonds, tax- exempts backed by U.S. agencies, and credits that are most dependent on federal spending.

 

[Randolph Kinney]

S&P downgrades Fannie Mae and Freddie Mac

http://www.marketwatch.com/story/sp-downgrades-fannie-mae-and-freddie-mac-2011-08-08?siteid=bnbh


S&P downgrades Fannie and Freddie, US-backed debt

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/08/08/national/w075646D02.DTL

Stocks plunged further after the downgrades. The Dow Jones industrial average fell nearly 300 points, or 3.2 percent. The S&P 500 stock index tumbled nearly 5 percent. Investors seeking safety drove gold prices up and Treasury yields down.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. As part of a nationalized system, they account for nearly all new mortgage loans. Their downgrade might force anyone looking to buy a home to pay higher mortgage rates.

 

[Mile High Trout]

For posterity in this here super length thread:

http://www.democracynow.org/2011/8/2/after_months_of_partisan_wrangling_wall

 

[William K]

So with AIG now announcing a lawsuit against B of A to recover $10B in losses , how much longer does B of A have before finally succumbing to the onslaught of lawsuits alleging "massive fraud"?

 

[Randolph Kinney]

So with AIG now announcing a lawsuit against B of A to recover $10B in losses , how much longer does B of A have before finally succumbing to the onslaught of lawsuits alleging "massive fraud"?

B of A is too big to fail. The FED can buy all those defaulted loans by using its balance sheet and ability to create money.

AIG is still partly owned by U.S. taxpayers (1.655 billion shares). Paying any claim to AIG from B of A is like taking money out of one taxpayer pocket and putting it into another taxpayer pocket.

Maybe this will make AIG look good enough so that U.S. Treasury can sell a few more AIG shares? woohoo