The Debt Thread

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Re: The Debt Thread

Postby Pixel8r » Wed Aug 25, 2010 10:05 pm

Morgan Stanley Says Government Defaults Inevitable

Investors face defaults on government bonds given the burden of aging populations and the difficulty of increasing tax revenue, according to a Morgan Stanley executive director.

“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote.

Rather than miss principal and interest payments, governments may choose a “soft” default in which they pay back debts with devalued currencies resulting from faster inflation or force creditors to take lower returns, Mares said in an interview...
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Re: The Debt Thread

Postby Ziknik » Mon Sep 06, 2010 11:29 am

There's plenty of room for us to take on new debt :?

http://www.bbc.co.uk/blogs/thereporters ... _news.html

In fact, the [IMF] study concludes that there's a more than 75% chance that the UK has room to increase its debt stock by another 50% of GDP before getting into a vicious debt spiral. Yes, you read that right - it thinks there's a good chance our debt could go to 140% of GDP without us getting into an explosive debt spiral
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Re: The Debt Thread

Postby Pixel8r » Mon Sep 13, 2010 9:45 am

Karl Denninger talking with Max Keiser about the US debt situation.

[youtube]eY8QTxsdTH8[/youtube]


[youtube]1imuWmWfSxk[/youtube]


[youtube]qVI4aJX0dDo[/youtube]
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Re: The Debt Thread

Postby Pixel8r » Wed Jan 05, 2011 4:33 pm

Consumer bankruptcies hit 5-year high in 2010

By Jonathan Stempel | NEW YORK | Tue Jan 4, 2011 2:24am EST

(Reuters) - The number of U.S. consumers who filed for bankruptcy protection in 2010 was the highest in five years, and the figure could rise as Americans struggle with excess debt in an uncertain economy, a report issued Monday said.

Roughly 1.53 million consumer bankruptcy petitions were filed in 2010, up 9 percent from 1.41 million in 2009, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center.

Filings in December totaled 118,146, up 4 percent from a year earlier and 3 percent from November's total.

The full-year total is the highest since the 2.04 million recorded in 2005, when there was a rush to seek bankruptcy protection ahead of a stricter federal law taking effect in October of that year.

Samuel Gerdano, executive director of the ABI, said filings are rising even as consumers try to cut spending and debt after the 2008 financial crisis and accompanying recession, and with the unemployment rate at 9.8 percent.

He said there is usually a 12- to 18-month lag between declines in consumer spending and bankruptcy levels.

According to the Federal Reserve, U.S. consumer credit outstanding has fallen in 19 of the last 21 months for which data are available, declining to $2.41 trillion in October 2010 from $2.57 trillion in January 2009.

"Consumers have been on sort of a strike when it comes to taking on more debt, as they become more aware of the dangers of high debt burdens in a weak economy," Gerdano said...
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Re: The Debt Thread

Postby Pixel8r » Tue Mar 22, 2011 9:42 pm

Fed's Fisher: U.S. debt situation at tipping point

FRANKFURT (Reuters) - The U.S. debt situation is at a "tipping point," Dallas Federal Reserve Bank President Richard Fisher said on Tuesday, and urged the U.S. central bank to refrain from any further stimulus measures.

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent. The question is when," Fisher said in a speech at the University of Frankfurt.

Fisher, seen by economists as one of the most hawkish policymakers within the Fed, said that although debt-cutting measures would be painful, he expected the U.S. to take the necessary actions.

"The short-term negotiations are very important. I look at this as a tipping point."

He said the U.S. economy was now growing under its own steam, but voiced his concerns about building global inflation pressures and said it was now time for the central bank to stop pumping out extra support.

"The Fed has done enough, if not too much, and we should do no more.. In my opinion no further accommodation is necessary after June either by tapering off the bottom of treasuries or by adding another tranche of purchases outright."...
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Re: The Debt Thread

Postby Pixel8r » Thu Mar 24, 2011 11:14 pm

US Finances Rank Near Worst in the World: Study

By: Jeff Cox | Published: Thursday, 24 Mar 2011 | 8:43 AM ET | CNBC.com Staff Writer

The US ranks near the bottom of developed global economies in terms of financial stability and will stay there unless it addresses its burgeoning debt problems, a new study has found.

In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general.

"We think it is important for the American people to understand where the United States is as compared to other countries with regard to fiscal responsibility and sustainability," Walker said in a CNBC interview. "Americans are used to rankings and they're used to ranking very high, but frankly in this area we rank very low."

While the news is bad, there is a bright side.

"Here's the good news: Some of the top countries had their own fiscal challenges, made reforms and now rank highly," Walker said. "If we adopt the recommendations of the National Fiscal Responsibility and Reform Commission or ones that have similar bottom-line impact, we move from 28 to 8."

As the US languishes near the bottom, these countries make up the top five: Australia, New Zealand, Estonia, Sweden, China and Luxembourg...
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Re: The Debt Thread

Postby Pixel8r » Thu May 19, 2011 10:04 pm

Pile of debt would stretch beyond stratosphere

By Emily Stephenson

WASHINGTON (Reuters) - President Ronald Reagan once famously said that a stack of $1,000 bills equivalent to the U.S. government's debt would be about 67 miles high.

That was 1981. Since then, the national debt has climbed to $14.3 trillion. In $1,000 bills, it would now be more than 900 miles tall. In $1 bills, the pile would reach to the moon and back twice.

The United States hit its legal borrowing limit on Monday, and the Treasury Department has said the U.S. Congress must raise the debt ceiling by August 2 to avoid a default.

The White House is trying to hammer out a deal with lawmakers to cut federal spending in exchange for a debt-limit increase.

Most people have trouble conceptualizing $14.3 trillion.

Stan Collender, a budget expert at Qorvis Communications, said the biggest sum most Americans have ever handled -- in real or play money -- is the $15,140 in the original, standard Monopoly board game...
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Re: The Debt Thread

Postby Ziknik » Thu Jun 02, 2011 12:11 pm

"we needed a fightback and a fightback is under way"
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Re: The Debt Thread

Postby Pixel8r » Wed Jul 20, 2011 12:35 pm

I noticed something new on the usdebtclock.org site today, which a page which shows different countries public debt to GDP ratio & external debt to GDP.

Check the UK's external debt, we are only surpassed by Ireland. :(

Check it out here - http://www.usdebtclock.org/world-debt-clock.html

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Re: The Debt Thread

Postby fexx » Wed Jul 20, 2011 7:15 pm

The UK one is good, I have posted the link to it as a 'reply' to some discussions where someone had suggested that the UK had 'recovered' from the economic downturn.

http://www.debt-clock.org/
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Re: The Debt Thread

Postby Pixel8r » Wed Jul 20, 2011 10:45 pm

:shock:

Moody's suggests U.S. eliminate debt ceiling

By Walter Brandimarte | NEW YORK | Mon Jul 18, 2011 10:33am EDT

(Reuters) - Ratings agency Moody's on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders.

The United States is one of the few countries where Congress sets a ceiling on government debt, which creates "periodic uncertainty" over the government's ability to meet its obligations, Moody's said in a report.

"We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty," Moody's analyst Steven Hess wrote in the report...
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Re: The Debt Thread

Postby Pixel8r » Thu Jul 21, 2011 8:51 am

Thanks to BHPtinto for this one;

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Re: The Debt Thread

Postby Pixel8r » Tue Jul 26, 2011 8:19 am

Check this visualisation of the US skyscraper debt - http://www.wtfnoway.com/ :wtf:
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Re: The Debt Thread

Postby fexx » Tue Jul 26, 2011 9:20 am

UK debt in fifty pound notes would reach the moon, 2.75 times over!!!

If £50 note is 0.11 mm then, £500 equals 1.1cm, £50,000 equals 1.1 metres
£5,000,000 equals 1.1 kilometres, 1 mile = 1.609344 km

so

£7,315,200 = 1 mile, £4.8 trillion in short form (i.e. 1 with 12 zeros behind it instead of the older 18) = 656,167 miles

That is: £4,800,000,000,000/7,315,200 = 656,167 miles
The Moon is 238,855 miles from the Earth, so the last £50 note would require a spacecraft to fly out 2.75 times the distance of the Moon.





http://gullionmedia.co.uk/2010/11/13/br ... n-of-1984/
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Re: The Debt Thread

Postby Pixel8r » Tue Jul 26, 2011 11:03 am

fexx wrote:UK debt in fifty pound notes would reach the moon, 2.75 times over!!!

If £50 note is 0.11 mm then, £500 equals 1.1cm, £50,000 equals 1.1 metres
£5,000,000 equals 1.1 kilometres, 1 mile = 1.609344 km

so

£7,315,200 = 1 mile, £4.8 trillion in short form (i.e. 1 with 12 zeros behind it instead of the older 18) = 656,167 miles

That is: £4,800,000,000,000/7,315,200 = 656,167 miles
The Moon is 238,855 miles from the Earth, so the last £50 note would require a spacecraft to fly out 2.75 times the distance of the Moon.

http://gullionmedia.co.uk/2010/11/13/br ... n-of-1984/

His calculations are out;

If £50 note is 0.11 mm then, £500 equals 1.1cm, £50,000 equals 1.1 metres


If a £50 note is 0.11mm thick then 10 x £50 notes are actually 1.1mm not 1.1cm. With this in mind £50,000 actually is 100 x £500, equals 100 x 1.1mm which is just 10.1cm not 1.1 meters.
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Re: The Debt Thread

Postby fexx » Tue Jul 26, 2011 1:46 pm

Pixel8r wrote:His calculations are out.


Of course, you're right - he's way out!

I thought there was something suss after posting it, but I was busy (spending too much time posting stuff when I should be working...)

When I thought about it after, £50 is not that far off $100, so per capita, that would make UK debt ridiculously high in comparison to the US.
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Re: The Debt Thread

Postby fexx » Tue Jul 26, 2011 1:47 pm

It's not going to reach the moon for a good few months yet....
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Re: The Debt Thread

Postby Pixel8r » Fri Jul 29, 2011 10:47 pm

China Rating Agency Plans US Downgrade Next Week -Reuters

China's Dagong Global Credit Rating Co. plans to downgrade its ratings on the U.S. as early as next week, Reuters reported Thursday on its website, citing the company's chairman.

Guan Jianzhong said even if U.S. lawmakers avoid a debt default, enough damage has been done to warrant a downgrade.

"We will react soon, probably next Monday or Tuesday," Guan said in an interview. "We need to look at whether (lawmakers) reach a compromise and the scope of the compromise, then we decide how deep the rating cut will be," he said. Dagong placed its U.S. ratings on watch earlier this month, and cut the rating to A-plus from AA in November.

"We will definitely cut the rating, regardless whether there will be a compromise. It has already dealt a blow to investors' confidence," Guan said.
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Re: The Debt Thread

Postby warpig » Mon Aug 08, 2011 2:13 am

"There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be turned into ingots bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence"

"Betting against gold is the same as betting on governments. He who bets on governments and government money, bets against 6,000 years of recorded human history."

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Re: The Debt Thread

Postby Pixel8r » Thu Aug 11, 2011 9:08 pm

Most Americans don't have $1,000 saved for emergency

CNNMoney | 1:04 p.m. CDT, August 10, 2011

A majority, or 64 percent, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.

Only 36 percent said they would tap a rainy day funds for an emergency. The rest of the 2,700 people polled said that they would have to go to other extremes to cover an unexpected expense, such as borrowing money or taking out a cash advance on a credit card...
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