Кризис в Америке [03]

The World's Biggest Hedge Fund Complete Blow By Blow On What Happens If The Debt Ceiling Is Not Raised | Zero Hedge

While it is a 99.9% given that the soap opera on the Hill will be over very shortly (most likely courtesy of an outcome that will send the AARP in an apoplectic yet powerless to change anything fit of rage), there is always the chance that politicians will screw something up. After all America is in its current predicament primarily courtesy of the same politicians who are now scrambling to retain face with the electorate, while at the same time perpetuate the status quo. Which is why we present this just released analysis from the world's biggest hedge fund, Bridgewater, which asks the logical question: "what happens if the debt ceiling is not raised" and provides it answer in excruciating detail. The primary focus is what happens to Treasury holders as this would be the security impacted first and foremost: "As we in detail go through some of the largest holders of Treasury securities and the various places where Treasuries are used in collateral and index agreements, it looks to us like there is a fair amount of leeway to not immediately react in the event of a default. It doesn’t look like most of these entities would need to either immediately liquidate their holdings or renegotiate contracts where Treasuries are used as collateral due to ratings downgrades. While it looks this way, we can’t be certain of this, because there are so many financial interconnections where a ratings downgrade or default on Treasuries could create unforeseen knock-on effects. And of course, there is the risk, albeit small, of a more substantial loss of confidence in whether the US will continue to pay on Treasuries, which would become an increasing risk if the debt ceiling negotiations drag on for a while after the official default. That could lead to significant liquidation of holdings and logistically disastrous renegotiations of contracts." Granted, this is the worst-case outcome. // www.zerohedge.com

Guest Post: Boiling Frog Alert: Congress Wants Automatic Wage Deductions To Pay Down The Debt | ZeroHedge

From Simon Black of Sovereign ManBoiling Frog Alert: Congress Wants Automatic Wage Deductions To Pay Down The DebtFolks… you just can’t make this stuff up. On July 6th, just two days ago, at least a dozen busybody Congressmen sponsored the introduction of HR 2411, the “Reduce America’s Debt Now Act of 2011.” They always come up with fantastic names for these pieces of legislation… and rest assured, the better/more patriotic the name, the more ominous the bill. This one follows the pattern. HR 2411 states that every worker in America should be able to voluntarily have a portion of his/her wages automatically withheld and sent directly to the Treasury Department for the purposes of paying down the federal debt. “Every employer making payment of wages shall deduct and withhold upon such wages any amounts so elected, and shall pay such amounts over to the Secretary of the Treasury…” That’s right. Uncle Sam is so broke that he wants to give all the good little Americans out there the opportunity to contribute an even greater portion of their paychecks to finance government largess. Desperate? Hmmm…. Don’t worry, it gets better. Obviously, if an employee feels so compelled and should elect to have a portion of his/her paycheck withheld, the onus of responsibility is now on the employer to make it happen. The employer has to do all the paperwork, withhold the money, send the payment to the Treasury, maintain the account records, and probably submit to all kinds of new filing requirements.

// www.zerohedge.com

Steve King on default: Obama could be impeached - Reid J. Epstein

He says that President Barack Obama “would be impeached” if the nation falls into default. // www.politico.com

Calafia Beach Pundit: GDP: less growth, more inflation

// scottgrannis.blogspot.com

CARPE DIEM: Our Biggest Budget Issue: Increased Spending on Payments to Individuals, i.e. "Entitlement Nation"

Professor Mark J. Perry's Blog for Economics and Finance // mjperry.blogspot.com