Posts filed under “Credit”

Debt Ceiling Debacle Has Already Damaged the U.S.

Dysfunction Is Limiting U.S. Position Abroad, Observers Say; ‘Sadness From Our Trading Partners’

click for ginormous graphic
Source: WSJ



Here is the problem with using the debt ceiling as a negotiating tactic: It does permanent, long lasting damage to the reputation of the US, and hastens the day when the US Dollar is no longer the world’s reserve currency.

The damage has ALREADY made US financing more expensive, impacted consumer confidence, and shaved a few bps off of GDP. The lasting ramifications of this are even greater, and future generations will spit expletives whenever they mention the 113th Congress.

The Tea Party has made it clear: Ideology first, party second, country last. They should be treated as hostile adversaries in all future negotiations.


See also
Why the U.S. Should Be Downgraded (MoneyBeat)
Salmon: The default has already begun (Reuters)
The Myth that U.S. Has Never Defaulted On Its Debt (TBP)
The debt-ceiling doomsday device (
Some are born solvent, some achieve solvency, and some have solvency thrust upon them (FT Alphaville)

Stop Fretting: The Debt-Ceiling Crisis Is Over! (New York Magazine)


Fiscal Uncertainty Chips Away at U.S. Prestige
Dysfunction Is Limiting U.S. Position Abroad, Observers Say; ‘Sadness From Our Trading Partners’
Thomas Catan
WSJ, October 15, 2013

Category: Credit, Crony Capitalists, Digital Media, Really, really bad calls

Relationship and Transaction Lending in a Crisis

Category: Credit, Think Tank

USA’s ‘AAA’ Placed on Rating Watch Negative at Fitch

This is why you don’t fuck around with the debt ceiling: “Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default.” “Although the Treasury would still have limited capacity to make payments after Oct 17th it would…Read More

Category: Analysts, Credit, Really, really bad calls

The Myth that U.S. Has Never Defaulted On Its Debt

The U.S. Has REPEATEDLY Defaulted Some people argue that countries can’t default.  But that’s false. It is widely stated that the U.S. government has never defaulted.  However, that is also a myth. Catherine Rampbell reports in the New York Times: The United States has actually defaulted on its debt obligations before. The first time was…Read More

Category: Credit, Think Tank

The Bank War

Click to enlarge     A previous discussion on the founding and dissolution of the First Bank of the United States (BUS) which existed from 1791 to 1811.  After the First BUS recharter was defeated, the United States suffered defeat in the War of 1812, and suffered from a lack of fiscal order and an…Read More

Category: Credit, Legal, Regulation

All Holders of U.S. Treasury Debt

Everyone The U.S. Government Owes Money To, In One Graph broken down by category and by how much government debt they hold   Source: NPR

Category: Credit, Digital Media, Politics, Really, really bad calls

WSJ Pines for the Return of Liar’s Loans

The Wall Street Journal Pines for the Return of Liar’s Loans William K. Black September 23, 2013       The Wall Street Journal’s editorial staff (WSJ) criticizes the Dodd-Frank Act and the leadership of the financial regulatory agencies.  I share many of those criticisms, but I parted company when the WSJ expressed its horror…Read More

Category: Credit, Real Estate, Really, really bad calls, Think Tank

Household Debt-to-Income Ratio, USA vs Canada

click to embiggen Source: BCA     I have been meaning to get to this since I was in Toronto last week, where I saw my friend (and fishing partner) Martin Barnes of BCA give an excellent presentation at the Toronto CFA Prediction Dinner. One of that charts that really stood out to me was…Read More

Category: Credit, Financial Press, Real Estate, Regulation

Payday Lending: New Research and the Big Question

Category: Credit, Think Tank, Wages & Income

Global Systemic Risk

click for ginormous graphic Source: NYU VLAB   I mentioned NYU’s VLAB earlier, but one more trick I wanted to share: You can drill down by region or even country to see how much risk is in the system. Note that this is a function of both size and riskiness, i.e., a very small reckless…Read More

Category: Credit, Fixed Income/Interest Rates, Regulation