don't usually listen to the Diane Rehm show, but caught it on NPR's live stream today, she had a good discussion yesterday entitled "global debt worries"
Global Debt Worries
one part i found interesting was William Cohan talking about how bond investors are reacting to the possible default - here's a rundown of some of his thoughts:
-Stock Market is the wrong market to be looking at for current economic status - what we should be looking at / worried about is the bond market, though the problem is it's complicated, much bigger, and harder to understand
-Recently, bond investors are not waiting for politicians to get their act together, are worried that the usa will default, and are taking action
-despite the potential default / downgrade by moody's, bond prices have rallied, people are flocking to it
-downgrade etc = obv. not a bullish sign for investors, but they are still investing because they have no other choices, i.e. they're not going to invest in europe
-"bond investors are basically betting that the u.s. wont default on aug 2, and "that may in fact be a good bet"
Comments? Agree/Disagree?
-Stock Market is the wrong market to be looking at for current economic status - what we should be looking at / worried about is the bond market, though the problem is it's complicated, much bigger, and harder to understand
agree + look @ commodities
-Recently, bond investors are not waiting for politicians to get their act together, are worried that the usa will default, and are taking action
agree in all cash atm till august 2nd
-despite the potential default / downgrade by moody's, bond prices have rallied, people are flocking to it welcome to structured deriv market in 2006
-"bond investors are basically betting that the u.s. wont default on aug 2, and "that may in fact be a good bet"
agree, usa has a high prob of not "defaulting", but the risk vs reward to even take a bet atm isn't worth it
damn blastoise looks like you were dead on with this one! gj +1
Considering CBs are still keeping rates low, their confidence in the global economy is not great. Therefore allowing US to default would be a horrible move at this point.
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