cyclical deficit

Article Index

Moodys Warns U.S. May Get Credit Downgrade in "Coming Two Years"

By , Contributing Writer, Money Morning -

The United States' AAA credit rating may be at risk sooner than previously thought as the nation fails to deal with its growing debt, Moody's Investors Service warned last week. Moody's said December's extension of the Bush-era tax cuts, combined with results from the November elections, may lead to further gridlock in Congress, increasing its doubts about the federal government's determination to reduce its debt. The credit ratings agency said it might put a "negative" outlook on the AAA rating of U.S. debt sooner than anticipated as the country's budget deficit expands.

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U.S. Credit Downgrade Possible, Moody's Warns

By , Contributing Writer, Money Morning -

The United States' AAA credit rating may be at risk sooner than previously thought as the nation fails to deal with its growing debt, Moody's Investors Service warned last week.

Moody's said December's extension of the Bush-era tax cuts, combined with results from the November elections, may lead to further gridlock in Congress, increasing its doubts about the federal government's determination to reduce its debt.

The credit ratings agency said it might put a "negative" outlook on the AAA rating of U.S. debt sooner than anticipated as the country's budget deficit expands.

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U.S. Debt Levels Elicit Warnings From Moody's and S&P

By , Money Morning -

Although worries about European sovereign debt continue to top the list of key investor concerns, two major credit-rating firms last week reminded investors that the United States may also have a debt problem.

In a research report on Thursday, Moody's Investors Service (NYSE: MCO) said the U.S. government will have to arrest its explosive deficit growth if it's to have any hope of keeping its "Aaa" debt rating. In a separate action that same day, Carol Sirou, the head of Standard & Poor's France, told listeners at a Paris conference that her firm could conceivably lower the outlook for the U.S. debt rating sometime in the future.

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GOP Takes Hardline on Federal Deficit By Killing Unemployment Benefits Extension

By , Contributing Writer, Money Morning -

Drawing a line in the sand over the federal deficit, Senate Republicans on Thursday killed a spending bill that included an extension of unemployment benefits and increased taxes on bonuses paid to executives at private equity firms.

The collapse of the comprehensive legislation spells the end of assistance for a total of 1.3 million unemployed Americans who were scheduled to lose their benefits at the end of last week. It also will leave a number of states with large budget holes they had expected to fill with federal cash to help with Medicaid.

Even though lawmakers voted 57-41 in favor of the measure, Democrats failed to secure the 60 votes needed to end a GOP-led filibuster. The legislators split along party lines with the exception of Sen. Ben Nelson, D-NE, who voted with the Republicans. Senate Majority Leader Harry Reid, D-NV, said this third vote on the matter would be the last, and that the Senate needed to move on to legislation cutting taxes for small businesses.

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Wall Street's Stranglehold on the Economy Is Choking Americans

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

America's Founding Fathers were afraid of any concentration of power in the republic. They were particularly afraid that banking interests could hijack our fledgling democracy.

And yet today, 234 years later, our Founding Fathers' worst fears have come true. Wall Street's stranglehold on the economy threatens our very prosperity, and the future of a truly democratic republic.

It's high time we address the truth about Wall Street's tyranny and set a course for a more secure economic future - one that's anchored by a safe banking system, not a system rigged by banks.

How Wall Street is Choking America? Read on...

Why Gold Will be the "Greatest Trade Ever"

By , Money Morning -

Forget about all the forecasts being made for 2010. Here's my prediction for 2015: An entirely new name - John A. Paulson - will grace the coveted top of the annual Forbes billionaires list.

And the gap between Paulson and the runner-up billionaire will be huge.

Everyone knows that Bill Gates and Warren Buffet are America's - and the world's - two richest men. But the financial crisis of 2008 and 2009 was not kind to either of them, eradicating $17 billion of their combined net worth.

On that famed list, at No. 33, is where you'll find Paulson today.  The hedge-fund manager's financial acumen led to what is now being called the "the greatest trade ever." By shorting the subprime mortgage market, Paulson & Co. Inc. generated a $15 billion gain. 

Paulson's personal net worth of $6 billion is impressive in its own right. But over the next several years, I believe that Paulson's trading savvy will vault him into the top spot.

And the vehicle that will take him there is gold.

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Special Report: How the Government is Setting Us Up for a Second Subprime Crisis

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

[Editor's Note: Shah Gilani, a retired hedge fund manager and noted expert on the global credit crisis, predicted this developing FHA debacle in a July 2008 Money Morning essay.] Is the government creating another subprime-mortgage bubble? The first time around, the three-headed federal serpent - the Bush administration, the Treasury Department and the U.S. Federal […]

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The Slow Death of General Motors

By , Money Morning -

By Martin Hutchinson Contributing Editor Money Morning U.S. President Barack Obama's firing of General Motors Corp. (GM) Chief Executive Officer G. Richard Wagoner Jr. may be the beginning of the final act of a long and sad drama - the slow death of GM. The company nameplate may soldier on in some form, but it […]

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The Real Reason for the Global Financial Crisis...the Story No One's Talking About

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

[Part I of a three-part series looking at how so-called “credit default swap” derivatives could ignite a worldwide capital markets meltdown.] By Shah GilaniContributing Editor Are you shell-shocked? Are you wondering what's really going on in the market? The truth is probably more frightening than even your worst fears. And yet, you won't hear about […]

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