Sunday, 14 August 2011

4 Most Depressing Consequences of the Sovereign Debt Rating Downgrade

1) Washington plays the blame game

After the downgrade announcement by Standard & Poor's, politicians in Washington almost immediately put their PR activities in overdrive with what seemed like the sole motive of trying to pin the blame on someone.

The Republicans blamed Obama, the Democrats blamed the Republicans, everybody blamed S&P, and nobody really took the time out to accept that there was a real problem. S&P had even made it clear that one of the major reasons for the debt downgrade was that the irresponsible manner in which the debt ceiling debate was handled indicated that the political system was far from efficient in a time when the U.S. needs a strong political system.

Given that the U.S. Treasury came within a couple of days of defaulting on interest payments for its $14 Trillion debts outstanding, a situation brought upon by partisan bickering in Washington, and that a half baked bill was basically just handed in at the last minute to stave off a near term default without any solutions for reducing the budget deficit, and that even after a downgrade, the political system did not attempt to at least discuss options for reducing the deficit, but blamed the agency that cut its rating for making a mistake, it seems to us that S&P had plenty strong reason to at least state that the political system in the U.S. has become too unstable for a sustainable economy.

2) Otherwise Sane People Making Inane Comments

Tuesday, 9 August 2011

Speculative Update: Bank of America looking very jittery

* Please note that this post is speculative only. The Weekly CryGest is not responsible for anything that results due to this (or any other, to be honest) post.

Bank of America Corp. (BAC) fell over 20% in yesterday's trading. We don't mean to predict anything here at The Weekly CryGest, but we think there could be a significant problem arising at the bank mainly due to record claims from Fannie and Freddie over soured mortgage loans.

Exacerbating the problem is that Freddie Mac has already asked the government for $1.5 Billion and with government finances the way they are, it is very possible that Freddie and Fannie would be 'urged' to organize as much of its funding requirements from the private sector.

Again, we're not saying something will happen, but, we think something might be brewing at Bank of America. And if something happens, remember Lehman?

Monday, 8 August 2011

U.S. Debt Ratings Cut, S&P Blamed

Standard & Poor's cut the long term sovereign debt rating on U.S. Government Bonds on Friday in an unprecedented, though not unexpected move.

Among the reasons cited for the ratings cut were “that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in (S&P's) view, would be necessary to stabilize the government’s medium-term debt dynamics,” and excessive political "brinksmanship" demonstrated during the Debt Ceiling debates.

Saturday, 30 July 2011

Update: Debt Debacle - Talks go backwards as potential U.S. Sovereign Default deadline looms

Last week, we wrote about the standoff between House Republicans and the President in coming to a resolution to the debt ceiling issue. Well, turns out, almost one week on and not only has there been little to no progress on the issue, but it seems like the discussions have taken a step back from resolution.

While the bigger stories last week rested on the hopelessly unproductive debate between House Speaker John Boehner and Barack Obama, the main story of this week is that of Boehner trying to chalk out a plan that can get the support of fellow Republicans. Seriously Mr. Boehner, one week you're trying to negotiate a solution to to the debt crisis with the President and the next, trying to figure out what your (and your party's) stance on the issue is?

Monday, 25 July 2011

Obama, Republicans keep playing Chicken with U.S. Economy as August 2nd approaches

House Republicans ended discussions on raising the debt ceiling on U.S. government debt in a move that could very soon land the nation in a pretty sticky situation contemplating how to put a spin on defaulting on its sovereign debt.

The debt ceiling is a cap enforced by the Congress to keep a check on Congressional borrowing (and spending) in the same manner a degenerate gambler sets a maximum loss limit for his trip to the poker table. In keeping with the analogy, Congress has the power to arbitrarily increase the debt ceiling when it feels that it should borrow more to stay in the game and ride past its dry spell.

Monday, 18 July 2011

Welcome to The Weekly CryGest

Hello All.

Welcome to The Weekly Crygest. In the coming weeks, this blog will target selected news and current affairs events every week and post a biased, opinionated, and sometimes factually incorrect view on each matter.

We would like to state upfront that we are not responsible for any harm, whether emotional, psychological, or of any other nature, caused by anything you read on this blog (although we would gladly take credit for any fortuitous event occurring in your life after reading it).

We hope that you enjoy the articles to come and would especially value your comments and feedback on the articles to come.