Category

U.S. credit rating

Top News

How to Prepare for the Debt Ceiling Deadline: Oct. 17

Investors have started to hunt for how to prepare for the debt ceiling deadline since U.S. Treasury Secretary Jack Lew put a date on the day the country will hit its borrowing limit.

"If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in history," Lew wrote in a letter to Congress sent Sept. 25, when he noted that Oct. 17 is the day we hit the debt ceiling.

you can take steps to protect yourself...

Top News

Will the Government Shutdown Affect the Market Long Term?

This morning (Monday), FOX Business' "Varney & Co."hosted Money Morning Chief Investment Strategist Keith Fitz-Gerald to ask, "Will the government shutdown affect the market long-term?"

The majority of pundits believe the market will go up when the shutdown ends, as more confidence and predictability return.

However, Fitz-Gerald isn't convinced...

U.S. Economy

Dire Consequences Await as U.S. Debt Nears a Tipping Point

As U.S. debt as a percentage of GDP hovers at levels not seen since World War II, concerns are growing that the American economy is susceptible to a debt crisis in the near future.

Here's why people are worried: If interest rates return to normal levels of around 5% as the U.S debt approaches $20 trillion, then servicing that debt each year will cost taxpayers $1 trillion.

Does anyone think that the Federal Reserve, as the enabler of all this debt, will be in any rush to raise interest rates?

Following Europe's example, the U.S. debt-to-GDP ratio hit 105.6% in 2013, a perilous level that has long-term repercussions for the world's largest economy, according to Standard & Poor's. By 2016, right around the time that Hillary Clinton will be running in earnest to be president, the ratio will likely hit a staggering 111%.

But how much debt is too much debt? And what are the pitfalls facing the United States in the future? Both questions remain hotly contested among economists, despite a wide acceptance of a "tipping point" theory both by politicians and ordinary Americans.

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U.S. Economy

Wrong, Again: S&P Upgrades U.S. Outlook

If you're not familiar with the term "putting lipstick on a pig," well I think there is an apt example at play again from the people who seem to be experts at applying the lipstick.

Standard and Poor's this week raised the outlook for the U.S. credit rating from "negative" to "stable," citing reduced fiscal risks and policymakers' willingness to sustain growth.

Oink. Oink.

There's another recession wave coming, and the U.S. economy is ill-prepared to take the hit.

But that doesn't mean you have to take it on the chin. You can prepare yourself by shunning one investment and looking to a surprising sector that at first glance wouldn't seem a great port in this storm.

U.S. Economy

Why the Market Yawned at the S&P's U.S. Credit Rating Outlook Upgrade

When Standard & Poor's upgraded the outlook for U.S. credit rating from negative to stable on Monday, Wall Street hardly seemed to notice.

The mild market reaction was a stark contrast to the sharp downturn back in August 2011, when the Congressional standoff over the raising the federal debt ceiling prompted S&P cut the U.S. credit rating to AA+ from the top-tier AAA.

But while the improved outlook is welcome, a return of the U.S. credit rating to AAA status isn't expected any time soon.

"Generally these things don't happen in just a few years," said Nikola Swann, S&P's sovereign ratings director.

S&P listed the fiscal cliff deal and stronger-than-expected private-sector contributions to economic growth, combined with increased remittances to the government by the government-sponsored enterprises Fannie Mae and Freddie Mac, as reasons for the upgrade to the U.S. credit rating outlook.

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