Debt Crisis
Boy, were they wrong! Not so long ago, the Congressional Budget Office (CBO) said it expected the U.S. government to register a budget deficit in the current fiscal year of $642 billion. But hold on a minute… The budget deficit so far (as of May 31, 2013) has…
The Federal Reserve continues to be a friend of Wall Street and those who can take advantage of the low interest rates and ability to carry debt at low carrying costs. But if you think for one minute that lower and Middle America is better off, then you…
The U.S. national debt is a major issue. And as time passes, this issue brings the country’s sovereignty into question. Our national debt—the money owed by the U.S. government and, ultimately, the taxpayers—stands close to $17.0 trillion and growing. (Source: Treasury Direct, last accessed April 19, 2013.) Sadly,…
In its monthly statement of receipts and outlays for the month, the Treasury Department reported that the U.S. government incurred a budget deficit of $107 billion for the month of March 2013. (Source: Department of the Treasury, April 10, 2013.) This monthly budget deficit was a result of…
In his recent essay published in the New York Times, David A. Stockman, President Ronald Reagan’s budget director from 1981 to 1985, said that there is a bubble waiting to explode due to the “flood of phony money from the Federal Reserve.” (Source: Stockman, D.A., “State-Wrecked: The Corruption…
In 1980, the total outstanding debt in the U.S. bond market was about $2.5 trillion—this included municipal bonds, Treasury bonds, money market instruments, corporate debt, and asset-backed securities. Fast-forward to 2012, and the U.S. bond market stands at $38.13 trillion—an increase of more than 1,400%! (Source: Securities Industry…
Money printing by the Federal Reserve will continue into the near future. And while it will help America avert a recession, the flow of easy money will be disastrous over the longer term. The reality is that the current bull market and rebound in the housing sector that…
What if the powerful breakout in the Dow Jones Transportation Average in December of 2012 was the beginning of a new, multiyear upcycle for the stock market? The stock market has clawed its way upward since the financial crisis hit in 2008. Recent trading volume has been mediocre,…
The U.S. Department of the Treasury reported that the U.S. government incurred a deficit of $204 billion for the month of February 2013. So far, we are into the first five months of the government’s fiscal year (started October 1, 2012), and the U.S. government fiscal deficit has…
U.S. bonds could be entering dangerous territory. According to Bank of America Merrill Lynch indices, 30-year U.S. bonds have declined more than five percent so far in 2013. Their decline in January 2013 was 4.3%—the biggest monthly decline since March 2012. (Source: Bank of America Merrill Lynch, February…
The threat of another credit rating downgrade for the U.S. national debt is increasing. But it’s not just due to the government’s inability to control its deficit; it’s about items not considered in budget talks. Student debt, for example, which has become increasingly guaranteed by the government, currently…
Could U.S. debt be reaching a breaking point? In the chart below of the U.S. 10-year Treasury, it looks like yields on U.S. bonds have bottomed out and are rising again. As the chart below shows, in June of 2012, the U.S. 10-year Treasury note traded close to…
Another crisis looming in the air... Student debt is going to be the next big hurdle to deal with in the U.S.’s economic recovery. Total student loan debt currently stands very close to $1.0 trillion and defaults on these loans are increasing at an alarming rate, placing more…
With all of the recent focus on the fiscal cliff and now earnings, traders appear to be forgetting the massive mess across the Atlantic in Europe and the eurozone. Remember Greece? The European debt crisis took Greece down with two separate bailouts. It was so dire for this…
Is it me or is there something wrong with the picture in Spain? Even with over a quarter of its population looking for work (and this is only according to the official numbers), over 50% of its youths unemployed, a recession, and massive debt levels, Spain says that…
I’m worried about U.S. debt (which this morning surpassed $16.3 trillion) and I’m concerned it’s going to increase even further. We all know that, since the financial crisis hit in 2008, U.S. debt has skyrocketed. Now with cities and states across the U.S. struggling with their budget deficit…
While debt-infested countries in the eurozone are struggling to decrease their budget deficits, the U.S. government is reporting an increase in its deficit. For the fiscal year of 2012, the federal government budget deficit was $1.09 trillion, slightly below 2011’s deficit of $1.29 trillion. (Source: U.S. Department of…
With fears of the fiscal cliff looming in the U.S. economy, investors are flocking towards the “safety” of U.S. bonds. But the yield on the U.S. bonds is zero or less when you consider the inflation rate. So why are investors running to U.S. Treasury bills? In general,…
Since the financial crisis of 2008 hit, the main goal of central banks around the world has been to boost lending to businesses and consumers. Their logic: once lending increases, economic growth can get on track. To meet their targets, central banks have cut interest rates rigorously and…
