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« Weighing the Week Ahead: Time for a Debt Ceiling Deal | Main | Estimating Market Risk »

August 01, 2011



Angel -- I'll try to do another article on this subject, but here is something to think about. Evaluating creditworthiness over many future years based upon recession and recovery revenues is not appropriate.

Put another way, as a matter of public policy we should not allow an unelected private company to dictate fiscal policy. Trying to solve the deficit problem in such short order, in the minds of most humans and their models, simply makes things worse.

Ultimately, the interest rate paid will be decided by the market. We'll see how it plays out.

Nice to see you commenting here. Thanks for joining in.


Angel Martin

Jeff. Good summary. You were absolutely right about the outcome of the debt ceiling.

However, I disagree with you on the ratings agencies and the Treasury AAA rating. I don't think any sovereign borrowing 43 cents of every dollar spent, with 100% debt to gdp, no immediate prospects of rapid revenue growth, and major unfunded liabilities for the retirement programs has an " EXTREMELY STRONG capacity to meet its financial commitments" over the long term.

I'd rather hold ADP or JNJ

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