The Big Default
Shhh... pay no heed to the man behind the curtain...
Unless an agreement is reached by Aug 2nd, the US Treasury will run out of money to pay its bills.
Most likely, only defense contractors and social security payments would be delayed.
However, in the event an actual default occurs, then a downgrade on US debt ratings will occur.
Those required to hold AAA rated securities must then liquidate non AAA assets.
The cascade created by this public/pension liquidation on CDO and CDS would be like Lehman Brothers 10X...
"The irony of the situation at the moment ... is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress rather than the euro zone,"
British government minister Vince Cable said on Sunday.
The Nattering One muses... We warned in the past about this. Greece just got its second bailout package. Will Japan and China bail US out?
Read details here.
Unless an agreement is reached by Aug 2nd, the US Treasury will run out of money to pay its bills.
Most likely, only defense contractors and social security payments would be delayed.
However, in the event an actual default occurs, then a downgrade on US debt ratings will occur.
Those required to hold AAA rated securities must then liquidate non AAA assets.
The cascade created by this public/pension liquidation on CDO and CDS would be like Lehman Brothers 10X...
"The irony of the situation at the moment ... is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress rather than the euro zone,"
British government minister Vince Cable said on Sunday.
The Nattering One muses... We warned in the past about this. Greece just got its second bailout package. Will Japan and China bail US out?
Read details here.
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