Sunday, August 07, 2011

CNN: "The Debt Mess"

Sunday evening CNN is airing “The Debt Mess: What Happens Next?”  

Asian markets had opened, with modest losses, and the same of Dow Futures (about -200 during the show). But Drew Cayley sounded as if the immediate impact on markets will not be an event, because the US is still a safer place to put huge amounts of cash than anywhere else.  Richard Quest also spoke.

The US  debt downgrade issue is to be seen as a different issue from the economy as a whole, and is still tactically much easier to manage than Europe’s.

There is actually a possibility that US interest rates could drop, with the government charging to park T-bills, encouraging investors to go back into the stock market, even retirees.

Thomas L. Friedman has an op-ed today (New York Times) "Win Together or Lose Together", link here. He speaks of this "Great Recession" as a "Great Credit Contraction" and the need to transfer wealth back from creditors to debtors. But the essay stops short of the left-wing calls for repudiation that I used to hear in the 1970s. There are some reasonable suggestions here. 

What should "you do" tonight and tomorrow?  Probably nothing. It's too late. But there is a feeling that Monday Aug 8 is not going to become the date for "The Event".

Does CNN know that there is an unrelated film "The Debt" starting Aug. 31?

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