Monday, April 18, 2011

US Outlook Cut.

Here.

We totally deserve to have our credit outlook cut. Who in their right mind would want to lend us money?

EDIT:

Our Treasury Secretary is confident that we won't lose our AAA credit rating. He has more faith than I do. In light of his statement, I am more confident than ever that we will lose it.

2 comments:

Billy Merchant said...

I've been thinking long and hard about this and I think I figured it out: investors know that they will be repaid because we can print money. Next, they buy short $ derivatives equal to the duration of the US-T's they own.

Long Treasuries, short Dollars.

Ankit Gupta said...

Today, there's almost $50,000 of debt behind every citizen issued by the government. For a family of four, it's almost $200,000. This means that every family of four, on average, could have had a second home, less debt on their existing home, or used it to send their kids to college who could have come out without any debt.

If you ask me, the government is borrowing money on our behalf and expecting us to pay it back. That's a lot of money to be taking out as debt on every citizen.