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David Rosenberg's Last Thought Of The Year: Time To Freak Out About Sovereign Debt Vince VenezianiDec. 16, 2009, 11:32 AM Analyst Dave Rosenberg is going into hibernation for a few weeks as the holidays approach, but before doing so, he took one last moment to address two growing concerns: The growing amount of U.S. debt and sovereign risk: Breakfast With Dave: We are not sure if this is a well known “fact”, but the U.S. government has a record $2.5 trillion of its debt, including bills, bonds and notes, rolling over in 2010. That, my friends, is 35% of the...

(AP)The latest calculation of the National Debt as posted by the Treasury Department has - at least numerically - exceeded the statutory Debt Limit approved by Congress last February as part of the Recovery Act stimulus bill. The ceiling was set at $12.104 trillion dollars. The latest posting by Treasury shows the National Debt at nearly $12.135 trillion. A senior Treasury official told CBS News that the department has some "extraordinary accounting tools" it can use to give the government breathing room in the range of $150-billion when the Debt exceeds the Debt Ceiling. Were it not for those "tools,"...

Fellow Conservatives,Within the next several days Congress will be voting on whether or not to RAISE our legal national debt limit from the current 12.1 trillion dollars by ANOTHER 1.8 trillion!They’re doing this because, by law, the government can’t borrow any more money to pay for inflated spending unless they first raise the limit.And they want to raise it by 1.8 trillion so it will be “enough� to cover what they want to borrow and spend until after the 2010 elections.  So they won't have to vote on it "again" - until after they ask you to vote for them...

[...] Most things sound a lot crazier from the outside, and so once I’d decided to write about the friendly, slightly bombastic man on the television screen, I thought I should try his program, as outlined in his book The Total Money Makeover. At the beginning of August, I had dutifully sat down with Peter, my fiancé, to draft a budget. Once we’d given every dollar a name (as the book puts it), I drove to the bank and withdrew 1,800 of them. Huddled over the wheel to hide this stupendous wad of cash from prying eyes, I doled out...

Congress is taking the final steps needed to raise the national debt ceiling from its current $12.1 trillion to make room for more borrowing. With the economy growing only sluggishly and Congress spending heavily on economic stimulus, two wars and extended unemployment benefits, the nation is running a deficit that hit a record $1.4 trillion in the latest fiscal year, adding to the national debt. That raises the question of whether the government's growing need to borrow money for operations could eventually drive interest rates higher, threatening the nascent economic recovery.

California faces at least another year of recession, and the state budget is so far upside down that it's now "more likely to default than not," on some of its debt, a new economic forecast from California Lutheran University's economists declares. The director of Cal Lutheran's new Center for Economic Research and Forecasting, Bill Watkins, cites the state's budget problems, its high regulatory and operating costs and its deficit infrastructure as impediments to rapid recovery.

Dec. 16, 2009, 8:53 a.m. EST Current account deficit widens to $108 billion By Greg Robb, MarketWatch WASHINGTON (MarketWatch) -- The U.S. balance of payments deficit widened sharply in the third quarter to $108 billion from $98 billion in the second quarter, the Commerce Department reported Wednesday. The increase in the second quarter deficit was due to a larger deficit on goods. The current account deficit totaled 3.0% of gross domestic product, up from 2.8% in the second quarter, which was the smallest percentage since the first quarter of 1999. The deficit peaked at 6.5% of GDP in the fourth...

The first step in solving a problem is to admit that it – in fact – exists. The churning “self-re-election system” that is our federal government has proven to Americans now that it has fully stopped listening to the people. If that were not bad enough, our two party system is locked up and dysfunctional; virtual collusion is indicated as the minority Senate Republicans continue to grant unlimited “unanimous consent” requests from Democrats on the pending disastrous healthcare package. Why is this epic battle over nationalizing one-sixth of our economy not being fought more vigorously by opposition Republicans? The RedState...

How Barack Obama and Ben Bernanke are destroying the dollar — and perhaps ushering in the amero First under the Bush Administration and even more so under President Obama, the federal government has been seizing power and spending money as it hasn’t done since World War II. But as bold as the Executive Branch has been during this financial crisis, the innovations of Fed chairman Ben Bernanke have been literally unprecedented. Indeed, it is entirely plausible that before Obama leaves office, Americans will be using a new currency. Bush and Obama have engaged in record peacetime deficit spending; so too...

Sovereign Government Debt Defaults Come Full Circle Economics / Global Debt Crisis Dec 15, 2009 - 10:58 AM By: Jim_Willie_CB The continuation of the bank dominoes took 14 months, but it occurred. The initial destructive impact craters were carved in the United States and England. To be sure, major damage was done to assets in Spain and Greece and other smaller nations in the last year, but their banks had remained insulated. The discredit and death of the central bank franchise system showed first clear evidence in September 2008 on Wall Street. The unique mysterious aspect of banking systems is...

IT'S TIME to stop worrying about the deficit -- and start panicking about the debt. To put it another way, short-term deficits aren't the real problem. The punishing hangover of borrowed money is. The ballooning national debt once looked like a long-term problem. Now, the long-term has become the middle-term, fast-forwarded by the cratering economy and the unavoidable and immense spending in the service of saving it. Consider: In the space of a single fiscal year, 2009, the debt soared from 41 percent of the gross domestic product to 53 percent. By way of comparison, the average for the past...

At least someone in America isn't feeling a credit squeeze: Uncle Sam. This week Congress will vote to raise the national debt ceiling by nearly $2 trillion, to a total of $14 trillion. In this economy, everyone de-leverages except government. It's a sign of how deep the fiscal pathologies run in this Congress that $2 trillion will buy the federal government only one year before it has to seek another debt hike—conveniently timed to come after the midterm elections. Since Democrats began running Congress again in 2007, the federal debt limit has climbed by 39%. The new hike will lift...

Leaders are considering a hike of roughly $300 billion to the nation's $12.1 trillion deficit, though the final figure has not been nailed down, congressional aides said on condition of anonymity. Democratic leaders had previously hoped to raise the limit by at least $1.8 trillion, enough to take care of the government's debt needs through the November 2010 congressional elections. What was your first hint the former $1.8 trillion increase attempt was a bad idea? Perhaps this? Or was it China buying a literal zero of Treasury debt in October? Or was it the TIC report this morning (which I'm...

if the debt ceiling isn't increased by the end of this year, the nation is likely to default on its debt. That would unleash a chain of events that could devalue U.S. bonds and seriously harm the nation's reputation with creditors around the world. In short, it's not something lawmakers can afford to let happen.

I wish it were possible to obtain a single amendment to our constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution; I mean an additional article, taking from the federal government the power of borrowing. - Thomas Jefferson, 1798 On Thursday December 10th, congressional Democrats led by Speaker Pelosi put forth legislation to raise the Treasury's debt ceiling by nearly $2T to $13.9T. She is hastily lining up a vote before the end of the year because the treasury expects the congress to...

Capitol politicians bemoaning the size and cost of the state's bonded debt is something like drunkards arguing over hangover remedies. Members of the Assembly Budget Committee, most of whom voted for tens of billions of dollars in new bonds, including $11-plus billion in new water bonds, convened Monday to worry publicly about how the debts will be repaid from a state budget awash in red ink. "We need to figure out how much borrowing we can realistically and sustainably afford," committee chair Noreen Evans said, terming bond costs "the Pac-Man eating up the general fund." Evans was one of the...

-- After passing a $447 billion spending bill Sunday, Congress faces a Jan. 1 deadline to raise the ceiling on the national debt even as a bipartisan expert panel warned Monday that the United States faces a potential funding crisis. The Peterson-Pew Commission, composed of former members of Congress and budget experts, warned that the federal budget has reached a danger zone much faster than anticipated even a year ago. Like a homeowner swimming in mortgage debt, the government's bills are growing faster than its income, to the point where overseas investors holding U.S. debt could be spooked at any...

Moody's: The Coming Sovereign Debt Crisis Of 2010 Joe WeisenthalDec. 15, 2009, 5:17 AM The subject of sovereign defaults is definitely the theme of du jour. It's the question everyone will be obsessed with in 2010 -- that, and the related theme, the breakup of the Euro. Moody's, via FT Alphaville, has created a new kind of "misery index" that merely adds a country's fiscal deficit with its unemployment rate. The top of the list reads like a who's who of the names in the news these days: Spain, Latvia, Lithuania, Ireland, Greece, the UK, Iceland and the US. Moody's...

WASHINGTON, Dec 14 (Reuters) - California, the largest borrower among U.S. states, may see its debt interest costs nearly double to over $10 billion in 2020, the state treasurer reported on Monday. Financials General fund debt service on outstanding bonds, authorized but unissued bonds and proposed water bonds is set to peak in fiscal 2020 at $10.45 billion, compared with a current level around $6 billion, and stay near that level through fiscal 2028, Treasurer Bill Lockyer said in a presentation for the state legislature. Crippled by the housing downturn and high unemployment, California has been one of the worst-hit...

BREAKING NEWS: Wall St. Journal: Headline Only Abu Dhabi Has Agreed To Provide $10 Billion For Dubai World Debt

This is a great short video! Should be shown in the classrooms! Video

Bullish on commodities and real assets, Jim Rogers says gold will be a great investment over the next decade as it is expected to test USD 2000 per ounce levels by then. PART1.

A Republican senator said Sunday he has no problem letting Democrats "off the hook" of voter anger over the deficit if it means passage of a commission to come up with ways to reduce long-term debt. A Republican senator said Sunday he has no problem letting Democrats "off the hook" of voter anger over the deficit if it means passage of a commission to come up with ways to reduce long-term debt.

Credit cards get their licks in now before consumer law takes effect Rate hikes, fees take effect before new law

"Raising America’s debt limit is a sign of leadership failure." --Sen. Barack Obama from a speech he delivered on the Senate floor, March 16, 2006 Obama spoke those words in 2006 when Republicans still controlled Congress. One year later, when Democrats were in charge and began the first of their record increases in debt Obama didn't even show up to vote. He was too busy running for President. In 2008 he did show up to vote FOR increasing the debt under a Democrat plan. In February 2009 Democrats again raised the debt ceiling $789 billion to pay for the first...

AMERICAN consumers owe less now than they did a year ago. Before the current financial crisis, that would have been unthinkable. Figures released this week by the Federal Reserve showed that Americans owed $10.8 trillion on home mortgages at the end of the third quarter, down 2.2 percent from a year earlier and the lowest level since mid-2007. Similarly, the Fed said that outstanding credit card bills in October totaled $888 billion, down 8.5 percent from a year earlier. That number was lowest since March 2007. Those trends do not, however, necessarily indicate that Americans have paid down their debts...

State and university employees could wind up with IOUs in their pay envelopes instead of checks in February if the planned sale of state buildings hits a snag, state Treasurer Dean Martin warned Monday. And that could leave worker with a piece of paper that won’t help them buy food for their families, pay the mortgage or heat their homes.

Even as federal employees' salaries are growing robustly, the president's pay czar Kenneth Feinberg has imposed new limits on executive compensation at AIG, Citigroup, General Motors, and GMAC, all recipients of government bailouts. Salaries will be limited to $500,000 in cash, and bonuses will be tied to "real achievement of objective goals." Chris Edwards at CATO—who has done quite a lot of independent analysis of federal pay—puts this story in context and adds some juicy details from his own data. Most remarkably, there are fully 383,000 federal workers earning six-figure salaries and 22,000 earning salaries of over $170,000. And these...

One month before Obama was elected as President of the United States the National Debt Clock, a digital counter near Times Square, ran out of space to track the national debt. This was after a Democratically controlled Congress had promised in 2006 during their first 100 hours in control they would drain the swamp, break the link between legislation and lobbyists and beyond that: "All the days after that: "Pay as you go," meaning no increasing the deficit, whether the issue is middle class tax relief, health care or some other priority." Today that same debt clock reads slightly over...

Congressional Democrats are poised to pass legislation before the end of this year that would increase the federal borrowing limit by another $1.8 trillion, a number large enough to avoid revisiting the matter next year when Democrats will have to defend their majority in midterm elections. To make sure the legislation passes, House Speaker Nancy Pelosi, D-Calif., is planning on combining it with a bill that funds Iraq and Afghanistan. Do you think Congress should raise the debt ceiling higher than its current $12.1 trillion?

For most of this country, this recession been a tough one. Chances are If you haven't lost a job you know someone who has. The real unemployment number (including people who are no longer getting unemployment dollars or have given up looking) is over 17%. Many many who have kept their jobs, have lost income either through pay cuts or unpaid furloughs. There is one group of people who have had nothing but good news. People working for the federal government have seen their salaries skyrocket. Not surprisingly, the number of people working for the federal bureaucracy has grown as...

What’s not to like about the idea of expanding an entitlement program that is already speeding towards collapse, mainly because too many people are entering it already? As it turns out, plenty — and even the New York Times has noticed. It has higher premiums, none of the out-of-pocket caps that private policies have, and will attract a pool with much higher risk, driving costs of premiums and services up, according to a former Medicare trustee: Marilyn Moon, a health economist and former public trustee of Medicare, said that for people 55 to 64, Medicare premiums could be higher than...

Two recent news stories illustrate, more clearly than ever, the Obama Democrats' contempt for the free market and individual economic liberty. If given the chance, they will expand government and spend as much of our money as they can get away with. First we learn that Obama and his party simply will not agree to keep their grubby government hands off the estimated $200 billion the banks are going to repay under TARP. Just when we finally receive this glimmer of good news to ameliorate our reasonable panic over the ever-increasing national debt, Obama announces that he intends to intercept...

The financial reform bill working its way through the House of Representatives, that includes Ron Paul's "Audit the Fed" provision, has gotten so morphed and horrific that Ron Paul is not even going to vote for it. The evil bastards have added an amendment to the Bill that will allow the Fed to pump any amounts of money it so chooses to "financial holding" companies deemed TBTF, without approval from anyone. William Greider explains: The sales pitch for financial-reform legislation pending in the House claims it would put a stop to “too big to fail” bailouts for the leading banks....

Polled support for the health care plan wending its way through Congress continues to crash downward in the polls. And before you say it, it's not just Rasmussen, which has actually been pretty much in the middle of the other polls. Here's where we stand as of today. For reform advocates, this is not good news. At 40% approval, it probably passes. At 30% approval--what Social Security reform enjoyed by the time it imploded--it's not going to no matter how the Senate massages their plan. Democrats cannot pass a bill this large on a straight party line vote if the...

WASHINGTON, D.C. — Sens. Amy Klobuchar and Al Franken today urged the Senate to pass an extension of unemployment and COBRA benefits before the end of the year, citing the 10 percent unemployment rate and the annual rise in heating bills coming this winter. The Minnesota Democrats joined 22 other senators who signed a letter to Senate Majority Leader Harry Reid, asking for a vote on the issue by Dec. 31. A 65 percent subsidy of premium costs for those with COBRA benefits, authorized by the stimulus bill, is set to expire at the end of the year.

In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections. “We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year. The leadership is betting that it’s better for the party to...

<p>President Barack Obama has recently unveiled bold new plans for government programs and tax breaks to try to boost the economy. These initiatives have no price tag yet, but they will require significant spending.</p> <p>You can debate whether new highway and bridge projects and sundry tax breaks will help the economy. That's a political question. But as the U.S. government piles borrowing atop more borrowing, it begs a financial question that is not utterly ridiculous: Are your U.S. Treasury bonds safe?</p>

Moody's cut other Illinois ratings, affecting about $24 billion of outstanding debt, including the state's Build Illinois sales tax revenue bonds, also cut to A2 from A1. The downgrade gave Illinois the second lowest U.S. state rating from Moody's, with California having the lowest at Baa1, a Moody's spokesman said. Moody's said Illinois has yet to take action to tackle a structural budget gap of more than $11 billion, equal to about 35 percent of its expenditures.

Obama's Debt CrisisHow much is the National Debt costing America?It’s interesting to note that the total interest paid on the National Debt since 1988 has been $7,393 billion (that’s $7.4 trillion). That’s a lot of money being wasted by politicians in Washington, D.C. and there are not enough people talking about it. There is an even more deafening silence regarding what the cost will be over the next 10 years. The United States will pay almost as much interest as it did over the last 20 years in just the next 10. And no one in Washington is addressing the...

I think it's high time that we start to consider more than words, my friends.. Action more than apathy, and our nation and it's future more than ourselves: In this course, I implore you all to think about but do NOT act yet. I think it is high time that we start thinking about a TAX PROTEST (Civil Disobedience); aka a Tax Rebellion. Peaceful civil disobedience has been used throughout history to change the direction of a nation. I would like to ask you if the next step of the Tea Party movement might be a (peaceful) civil disobedience of...

Developed Countries Rapidly Blowing AAA Ratings And Entering Debt Crisis Danger Zone Joe WeisenthalDec. 8, 2009, 3:43 PM Here's a fantastic chart from Moody's, courtesy of David Goldman, showing the ratings trajectory of various Western developed countries. Basically, Switzerland is the only country not to be racing headlong into the purple -- non-AAA -- zone. Says Goldman: Under US government projections, debt service will exceed 10% of GDP by 2013, which means that by one measure the US will move out of AAA territory. But the UK, Germany and France will be headed in the same direction.[snip]

The credit crunch continues, with businesses large and small finding that their bankers remain exceedingly stingy in the wake of the 2008 financial debacle. "We need to see banks making more loans to their business customers," Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila Bair told reporters recently after the FDIC released figures showing that the amount of loans outstanding in the nation's banks fell $210.4 billion in the third quarter of 2008. That is the largest quarterly decline since the FDIC began tracking loans in 1984. Of course, today's low interest rates don't especially make lending to small businesses worth...

Countries must get their fiscal houses in order or face credit downgrades, international ratings agencies say. International ratings agencies are warning the United States and several European governments that they face credit downgrades if they don't soon come up with clear plans to get their deteriorating fiscal houses in order. Moody's Investors Service said Tuesday the weakening public finances in the U.S. and Britain may “test the Aaa [triple-A] boundaries” for their ratings. While analysts say there is no immediate risk of a cut in the ratings of major developed economies, the less stable fringe players are already feeling the...

December 8, 2009 Dear Senator Kerry, I have always wanted to receive just such a mailing as I did from you today in support for the Democratic Party and President Obama. So let me begin by thanking you for this opportunity to express myself to you. What you, President Obama, and your Democratic cohorts have done to this nation in the short time you have tried to exploit your filibuster proof majority is nothing short of an atrocity against the American people. To your everlasting shame you have seized the opportunity to spend money that we don’t have and money...

Dubai's economic meltdown was a warning sign of further sovereign default troubles for other governments. CMA, a credit information specialist, tracks the world’s most volatile sovereign debt issuers according to percentage changes in their 5 year Credit Default Swaps. On top of their list for the greatest sovereign risks are countries from the former Russian Eastern Bloc, conflict-torn nations, and an oil-rich dictatorship. #1 Venezuela Cumulative Probability of Default: 60% WSJ: "one week ago, the government was forced to begin shutting down seven small banks that together represent up to 12% of banking system deposits, after the public began to...

John Mauldin: Here's Why Our Massive Debt Mountain Will Kill Us In The End Henry BlodgetDec. 7, 2009, 1:36 PM John Mauldin, President, Millennium Wave Advisors, LLC (4 min)(Go to the site to view the video)* We're borrowing ourselves to death * But government spending doesn't fix anything--investments must be made in the private sector in order to create jobs * The U.S. will not reach a $2 trillion deficit--because government will raise taxes and cut spending before that happens. These moves will kill the economy. * Another financial crisis will occur if there is no credible plan to get...

Worries about Greek debt contributed to a flight from risk in European financial markets Tuesday following a decision by Fitch Ratings to downgrade Greece's sovereign rating. Fitch cut Greece's long-term foreign-currency and local-currency ratings to BBB+ from single-A-minus, highlighting "concerns over the medium-term outlook for public finances given the weak credibility of fiscal institutions and the policy framework in Greece."

With the national debt topping out over $12,020,717,005,598 the Ship of State is now sailing in a sea of red ink. But is this foreign or domestic ink? According to the U.S. Treasury Department 25% of the debt is owed to foreign interests. With your share of the debt at close to $40,000 you owe foreign governments like Japan and China more than $10,000. Yes you owe them that. You see Washington views your paycheck as collateral that it can put on the market at any time it wants to and then you get stuck with the bill. The Treasury...

Stuart Varney was just on Fox and said Moody's will lower the United States bond rating for the first time ever in 2013 with current spending plans.