Global Economy Bursting?

[Randolph Kinney]

Treasury sells 10-year notes at lowest yield ever

http://www.marketwatch.com/story/us-sells-debt-at-record-low-yield-bonds-gain-2011-08-10?siteid=bnbh

 

[Randolph Kinney]

European Central Bank must go nuclear to save Europe

http://www.telegraph.co.uk/finance/...tral-Bank-must-go-nuclear-to-save-Europe.html

A chorus of global economists has called on the European Central Bank to go far beyond pin-prick purchases of eurozone debt.

It needs to launch quantitative easing on a massive scale to head off a eurozone debacle, if necessary purchasing half the entire stock of Italian and Spanish debt, they argue.

 

[Randolph Kinney]

Mortgage-Bond Selloff Threatens Rebound in U.S. Commercial Property Market

http://www.bloomberg.com/news/2011-...threatens-commercial-real-estate-rebound.html

The outlook darkened in the past month amid a selloff in securities linked to debt on properties such as office buildings and retail outlets. Further cracks emerged on July 27 when S&P pulled its rating on a $1.5 billion bond sale by Citigroup Inc. and Goldman Sachs Group Inc., roiling the $600 billion CMBS market. The banks had already been forced to overhaul the transaction to increase collateral protection and boost yields to attract investors.

 

[Randolph Kinney]

U.S. 10-Year TIPS Yields Go Negative for First Time After Fed Rate Promise

http://www.bloomberg.com/news/2011-...ve-for-first-time-after-fed-rate-promise.html

The fixed interest payment on Treasury 10-year Treasury Inflation-Protected Securities fell into negative territory for the first time on speculation the Federal Reserve officials promise to keep benchmark interest rates at record lows through mid-2013 will spark inflation.

The yield on 10-year TPS maturing in July 2021 touched negative 0.015 percent.



Beijing Downgrades US-Treasury to A from A+ - Is Anybody Listening?

http://news.goldseek.com/GoldSeek/1313006700.php

Yet the most important voice in the debate about the credit worthiness of America’s debt, is not the twisted opinions of the US-credit rating agencies, but rather, that of China’s credit rating agency - Dagong Global Credit Rating, which downgraded US-Treasury’s debt from A+ to single-A last week. “The US decision to raise the borrowing ceiling will not change the fact that the growth of its debt has outpaced its overall economic growth and fiscal revenue."

 

[Couch Potato]

The downgrades are pushing interest rates through the floor.

 

[PropertyEconomics]

The downgrades are pushing interest rates through the floor.

You expected immediate increases? Well they should have happened but we have a Fed that is gutless and used the only tool they had left in their bag at the moment.

Just wait ... 2013 will be the beginning of unheard of consequences to the downgrades and our lack of ability to get our financial house in order .... be patient grasshopper ... stand in the middle of the road .... the bus is on schedule and it will run you over if you dont pay attention and take necessary steps to get yourself on the sidewalk.

 

[Big ole Boy]

No problem with default .

.... yea, there is no problem .....

...perhaps we will not become the Weimar Republic circa 1915 ....

...we are the reserve currency .....

...now we can just make the whole world the Weimar Republic ......

... no adults anymore ....

... the new way forward is with maraunding children jealous of the rich

 

[Randolph Kinney]

Nearly three-quarters of Americans doubt Washington can repair the economy

http://www.washingtonpost.com/polit...8/10/gIQAXsUB7I_story.html?wpisrc=al_national

Half the country agrees with the assessment of the nation's financial situation rendered by Standard & Poor's, which downgraded the U.S. credit rating for the first time in history.

 

[Randolph Kinney]

Dilemma over dollar reserves

http://www.chinadaily.com.cn/cndy/2011-08/10/content_13081988.htm

Of the $3.2 trillion in reserves managed by the State Administration of Foreign Exchange, about $1.1 trillion are in US Treasuries, according to US Treasury International Capital System figures. After Standard & Poor's (S&P's) downgraded the US sovereign credit rating, many Chinese commentators, policy advisors and economists have argued more aggressively that China should diversify its massive foreign reserves, a large part of which now is in US dollars.

Such people are either urging China to diversify its foreign reserves away from US dollars to other currencies or suggesting that it move more quickly to asset classes such as commodities. Among the reasons cited for this are "the risk of US government default is rising", "there will be a significant reduction in the purchasing power of Chinese holding of US Treasuries or US dollars", "the forthcoming QE3 (third quantitative easing in the US) will exacerbate US inflation and force a devaluation of the US dollar", and "it is an opportunity for China to speed up its yuan internationalization".

 

[Terrel L. Shields]

http://money.cnn.com/2011/08/10/news/economy/thebuzz/

It's even more ironic since Bernanke criticized the Bank of Japan in a paper in 1999 while he still was a professor at Princeton. The title? "Japanese Monetary Policy: A Case of Self-Induced Paralysis?"

We are mimicking the Japanese that Bernanke criticized so much...OK, coach, do we go thru 2 plus decades of this same crap just like Japan has done?....I guess so.