In Moody's Threatens U.S. Debt Rating Cut, Thursday's Wall Street Journal reported on the rating agency's announcement that it "might review the government's Aaa debt rating for a possible downgrade as early as next month if there is no progress toward a deal in Washington to increase the $14.294 trillion federal borrowing limit and cut deficits." Now doesn't that send a chill down your spine? For me it's a tingle... l might even be giddy if the line read "Moody's, having just woken to the fact that the world's premier government must increase its self-induced debt-limit to make its interest payments, has announced a downgrade to BBB. As it would any other shoddily run organization..."
Of course I can make such a reckless pronouncement - knowing that a major downgrade would send interest rates into orbit and the economy into the cellar - for I am absolutely certain it's not happening...
Yet I can't help but wonder; what if Moody's had downgraded Greece a $few-hundred-billion ago? You think maybe they'd have gotten their house in order way back then? You think maybe they wouldn't be so irreparably upside down at the moment?
But, alas, it didn't happen in Greece then and it ain't happening in the U.S. now... But take heart my friends, for we do have something today that Greece didn't a $few-hundred-billion ago; we have Greece... We'll surely learn from their example... won't we?
P.s. With regard to today's jobs number; the bad news is the number was way below consensus expectations, the good news is the number was way below consensus expectations... Washington has to understand that we can print money till we pop, and businesses, in this regulatory-rich environment, still won't hire... Instead they'll hoard a little, they'll innovate a lot (buy new technology) and they'll make a few acquisitions. And of course a weak dollar/higher commodities prices hits them hard in terms of input costs. In that sense, printing simply makes matters worse...
Stay tuned...
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