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AP Sobs: Threat Of US Default ‘Induces Shrugs’!

From a frustrated Associated Press:

Around world, threat of US default induces shrugs

As default nears, many businesses and investors prepare with a collective shrug

By Bernard Condon | October 14, 2013

NEW YORK (AP) — Warren Buffett likens it to a nuclear attack. Economists warn that government spending on programs like Social Security would plunge. The Treasury says the economy would slide into a recession worse than the last.

Notice the conspicuous omission of the biggest fearmonger of them all, Barack Obama. But apparently, even his attempt to talk down the markets, which continued yesterday, is still not working:

Yet you wouldn’t know that a U.S. debt default could amount to a nightmare from the way many companies and investors are preparing for it: They aren’t. The assumption seems to be that in the end, Washington will find a way to avert a default.

Clearly, Obama now needs to ‘focus like a laser’ to convince the world the US will default.

"Doomsday is nigh, and everyone shrugs," said Nicholas Colas, chief market strategist at CovergEx Group, an investment brokerage in New York. Brian Doe, a wealth advisor at Gratus Capital Management in Atlanta, has 35 clients who’ve entrusted him with $50 million for safekeeping. He isn’t losing sleep over a potential default.

Neither are his clients, apparently. Not one has called him about the issue, he said. "I’ve not done anything," he said. He puts the odds of default very low. "People in Washington are stupid, but not that stupid."

Marcello Ahn, a fund manager in Seoul, is more prepared, sort of. He doesn’t think the U.S. will default. But if it does, economic-sensitive stocks of shipbuilders and chemical companies will get hit especially hard. So he’s held off buying them.

But he hasn’t sold a single stock or made any big moves to protect his portfolio. "We are not taking actions based on the worst-case scenario," he said.

That worse case is inching closer. The Treasury says it will run out of money to pay its bills if Congress doesn’t increase its borrowing authority by Thursday. That includes paying interest and principal on already issued U.S. Treasurys, considered the most secure financial bet in the world.

This, of course, is a blatant lie. Every month the US takes in enough in taxes to pay the interest and principal on these Treasurys many times over. But it is the AP, and they have to say what Obama and the Democrat Party tell them to say.

Still, some financial regulators, big banks and mutual funds have moved to shore up their defenses. One area of concern is Treasury bills that mature shortly after Thursday. The fear is that owners of those bills may not get their money returned to them in case of a default…

Again, that is a lie. That will only happen if Obama disobeys the law.

If other financial institutions are worried about liquidity or hits to their Treasury holdings, they’re not showing it…

Protecting yourself during a U.S. default might not work in the chaos that ensues. In fact, the moves might backfire.

Stuart Speer, a financial advisor in Shawnee Mission, Kansas, learned that the hard way two years ago. In August 2011, the U.S. came close to defaulting and S&P downgraded Treasurys.

This is another oft repeated lie from the AP. S&P downgraded the US credit rating. And it had nothing to do with the risk of default. They downgraded because of our terrible debt to GDP ratio.

Speer responded by dumping Treasurys from his holdings, fearing many investors would do the same and prices would tumble. But others ended up buying Treasurys and prices rose sharply…

Hopefully, Mr. Speer has learned to never believe the mainstream news media or their Democrat masters.

This article was posted by Steve on Tuesday, October 15th, 2013. Comments are currently closed.

One Response to “AP Sobs: Threat Of US Default ‘Induces Shrugs’!”

  1. yadayada says:

    “Again, that is a lie. That will only happen if Obama disobeys the law.”

    sorry Steve, but it is Nero. it’s become apparent he can do nothing but.

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