"Message from Wall Street clear, as markets shudder and fall" by Todd Wallack, Globe Staff / July 30, 2011
It is possible the market could fall even more dramatically next week if Congress and the White House remain at an impasse on Aug. 2 - the day officials say the US will start running short on money to pay its bills - or credit rating agencies downgrade the government’s pristine AAA standing.
Some nervous investors already are fleeing money-market mutual funds, popular vehicles for stashing short-term savings, because of worries that a default could temporarily erode their value or block access to money. Many such funds hold short-term US treasuries and other government bonds.
The Investment Company Institute, an association of investment companies based in Washington, reported that investors withdrew more than $37 billion from money market funds the week ended Wednesday, the largest outflow this year.
But management companies say they have already taken steps to assure investors that their funds are safe. Boston-based Fidelity Investments, the largest manager of money market funds in the United States, said it has stress-tested its funds, set aside more cash for them, and did not buy any treasuries scheduled to mature during the first two weeks of August.
Pioneer Investments, a Boston mutual fund company, purged all US Treasury bonds from its money market fund earlier this week. But like many money managers, Pioneer said it has not changed its investment strategy for long-term bond and stock funds.
“I think most investors do not believe it’s a very high probability that the government will default,’’ said Ken Taubes, chief investment officer for Pioneer’s US operations.
Taubes said he believes most investors remain convinced a default will be avoided, and that they Aug. 2 deadline is suspect. He noted that government revenues have come in ahead of projections in recent weeks, meaning the government will probably have enough cash to meet its obligations for a few more days - if not weeks - beyond Tuesday. And Taubes and other observers speculate that federal officials could employ creative tactics to free up additional cash, such as by tapping assets in government pension funds.
So they are going to STEAL YOUR PENSIONS, federal employees?
And you thought being a good bureaucrat would protect you, huh?
Many businesspeople, however, are irritated by political leaders’ inability to solve the issue by now. They say the stalemate has created uncertainty for everyone from defense contractors counting on government payments to real estate professionals whose business depends on the government guaranteeing new mortgages.
You see who the important people are to this government, no?
Downbeat economic data released yesterday only darkened their moods. The Commerce Department reported that the economy grew at a tepid 1.3 percent annual pace in the second quarter, and revised the first quarter rate to 0.4 percent, much lower than initial estimates....
Translation: the GOVERNMENT LIED about the economy like they do EVERY QUARTER!
Meanwhile, Bank of America Corp., TD Bank, Sovereign Bank and other major banks say they are readying contingency plans in case the government defaults on its payments or temporarily suspends sending checks to federal workers and others, including Social Security recipients.
Several banks, including Rockland Trust and Belmont Savings Bank, have pledged to waive overdraft fees for customers if the US government temporarily suspends some payments. The Massachusetts Bankers Association recommended yesterday that banks consider making sure they have increased access to cash and designate employees to field calls about debt-default implications.
State Street Corp., based in Boston, said yesterday that it “has taken steps to prepare for contingencies, including a lack of liquidity and heightened volatility.’’
“We are in close touch with our clients, industry participants, and regulators, and very much hope a resolution to this matter is reached,’’’ said Marie McGehee, a State Street spokeswoman.
Gee, if State Street is SO CONCERNED then they can GIVE BACK the $885 million-dollar TAX REFUND(?) when they MADE $1.6 BILLION in PROFITS last year -- and will be able to AVOID TAXES for YEARS TO COME by CONTINUING to APPLY PAST LOSSES!
See: State Street Stealers
Yeah, but YOUR SOCIAL SECURITY and MEDICARE has to be CUT, Americans!!!!!!
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And are you READY FOR A WAR, readers?
"State scrambles to stave off a ruinous shortfall" by Noah Bierman, Globe Staff / July 30, 2011
Top state financial officials have spent the past several days in war-room mode, contemplating worst-case scenarios should the debt crisis in Washington prevent the federal government from giving Massachusetts more than $200 million a week in reimbursements, mostly for programs affecting the poor.
Yup, while the wars, Wall Street, corporations, and Israel are all taken care of.
In an ominous sign of the potential trickle-down effects from the deadlock Washington, Moody’s Investors Service said it is reviewing credit ratings of 162 local governments in 31 states - including Dover, Concord, Newton, and Brookline - that could be affected if the federal credit rating is downgraded.
Yeah, the credit rating agencies that work for banks will be sure to make you scream.
Related: Inside Job
After seeing that whole film why should their ratings carry any weight at all?
Moody is focused only on cities and towns with the highest credit ratings, as part of an initial analysis of how a federal default could affect the most financially robust communities across the country. A lower credit rating could raise the cost of borrowing for some of the state’s wealthiest towns.
Then don't borrow any more money.
But yesterday also brought good news for the state when Massachusetts officials learned federal officials had sent them a $100 million advance in health care reimbursement that was not expected until next month. Though state officials said the early payment was not tied to the debt crisis in Washington, they acknowledged it gives them a measure of breathing room as they consider what to do if the other $750 million due for the month does not come.
Must they lie about everything?
Federal money makes up a fourth of the state budget, paying for more than 500 grants, the vast majority of highway construction projects, health care subsidies for 1.25 million residents, and food stamps for 1 in 8 residents. It also provides salaries for 4,500 state employees.
Are you kidding me?
Federal officials have not detailed which payments could be frozen, or partially frozen, and which ones might be covered in the event of a default.
Actually, they have: Creditors would be paid first
Hey, what's one more lie and distortion in a newspaper full of 'em?
Yesterday, budget chiefs around the nation were expecting a briefing from the US Treasury, only to learn later in the day that it would not be coming by day’s end....
Massachusetts is in better shape than many other states. The state budget was passed this month without a California-like crunch or a Minnesota-style shutdown. And tax collections in recent months have been far higher than expected, giving state officials some comfort that they could weather a federal crisis of one or more months, using state money to fill the federal void temporarily. But in September, when the state traditionally doles out more than $1 billion in annual state aid payments to cities and towns, the situation could grow more troublesome, said Treasurer Steven Grossman.
“September, I think, would put every state in the country . . . in a position of significant difficulty, no matter how healthy your cash position on Aug. 1,’’ Grossman said yesterday.
The exact date when the state could potentially run short of cash would depend on various factors, including what portion of its reimbursements the federal government continues to pay. The day of reckoning moves further down the road if the federal government pay half its obligations, for example, than it would if it pays none of them, he said....
Grossman said he and Massachusetts’ budget chief Jay Gonzalez are trying to reassure the public that quality of life will not be harmed, while also looking down the road to make sure they are prepared for even the most unlikely outcome.
Pfffft!
If the impasse lasts into September, past when the state can temporarily cover its obligations, it might then be able to issue short-term debt to cover bills, Grossman said.
Yes, GOING INTO DEBT to BANKS and "investors" is the ANSWER to EVERYTHING!
Grossman also listed a number of “last resort’’ scenarios in the event that the credit markets freeze up, preventing the state from issuing bonds.
Why would credit markets freeze up?
They include using the state’s rainy day fund, now at about $700 million. Grossman said treasury officials have also contacted some banks that have long-term relationships with the state and might be willing to offer short-term loans in the unlikely event that the state cannot issue bonds.
Yup, the BANKS are going to SAVE US!!
And as a final resort, Grossman said the state could begin talking to its vendors about accepting delayed payments....
As long as they are not debt interest payments to banks.
The more direct threat to city and town credit ratings caused great concern in Washington, where the state’s congressional delegation sent a letter to Moody’s yesterday demanding that it allow local governments to prove their credit-worthiness and revoke the threat of downgrade....
Why should local governments have to PROVE ANYTHING to SERVANTS of the LYING and LOOTING BANKS!!
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And if that doesn't convince to raise the ceiling, maybe this will:
"From residents, growing feelings of fear, frustration, and disgust" by Peter Schworm and Vivian Yee, Globe Staff / July 30, 2011
With the crisis showing little sign of resolution and the threat of default looming, frustration welled to a bursting point yesterday across the region. Many of dozens interviewed said they had never been so disillusioned with the political process, and most bitterly derided elected leaders for bringing the country to the brink of economic calamity.
I am WITH THEM on THAT ONE!
“I think the lawmakers should be fired,’’ said Peter Shea, 56, a Braintree resident who works in Boston. “They’re a disgrace.’’
I've got a better idea:
Line up a few AmeriKan newspaper executives, too.
Shea said he supports substantial spending cuts to rein in the deficit and that the wealthy should also pay more in taxes. Like most observers interviewed, he said the solution seemed self-evident, if only both sides would meet each other halfway....
Opinion on who deserved the brunt of the blame for the high-stakes standoff varied by party affiliation, with most people holding the Republican Party, particularly its Tea Party wing, chiefly responsible.
But across the political spectrum, people were alarmed that lawmakers had let the problem reach this point and that a situation that had been handled routinely in the past was now causing such turmoil, they said....
Treasury Secretary Timothy Geithner has said the government will reach its $14.3 trillion borrowing limit Tuesday and will no longer have enough money to pay all its obligations, including Social Security and other entitlements.
They are NOT ENTITLEMENTS! They are TAXES ALREADY PAID into a TRUST FUND that is SUPPOSED to have a SURPLUS!
Why are they EVEN PART of the DISCUSSION?
How about SHUTTING OFF the F***ING WARS FIRST?!!!!!!!!!!
Many castigated politicians for failing to find common ground on an issue so crucial to the country’s economic well-being and urged them to set aside political considerations.
How does borrowing more money so the debt service payments are larger help our economy?
“Nobody wants to compromise,’’ said Peter Obour-Mensah, 44, of West Roxbury. “But there comes a time when you have to compromise for the sake of the whole country.’’
Obour-Mensah said he has followed the developments almost hourly and worries the uncertainty is hurting the economy.
With the government’s debt skyrocketing, the two parties have clashed over how to rein in the deficit. Many interviewed yesterday said they supported a combination of spending cuts and tax hikes and chided tax-averse Republicans for refusing to cede ground.
“I think it’s a damn shame that 100 [Tea Partiers] are going to affect the fate of this country,’’ said Brian Skinner, a 55-year-old Democrat from Allston. “All they care about is starving the beast - the government.’’
Maybe this mass-murdering empire called a government should be starved.
Related:
Globe Editorial Debt battle reveals danger of government by slogans
Owing a Debt of Gratitude to the Boston Globe
Proving propaganda still works on some people.
Yet many also noted that the government had to learn to live within its means.
Jason Gell, a 33-year-old real estate broker, said that means both sides have to give and take.
“The Republicans have a point that there are way too many entitlement programs,’’ he said. “The Democrats have a point that we need to raise taxes and cut the loopholes for upper-class people.’’
But with both parties already jockeying for advantage in next year’s election, many feared politics as usual would prevail.
“They’re worried about their own political agendas without taking the rest of the country into consideration,’’ said Larry Toney, 55, of Boston. “I feel like it’s a game that’s being played out.’’
With the country deep in debt and plagued by an often poisonous political debate, some said they had lost faith in the country’s future.
Mine was lost years ago.
“Right now I really think about going back to Europe,’’ said Tom Danicki, a 37-year-old Polish immigrant who moved to Boston five years ago. “This is not the America I was dreaming about.’’
Nor is it the one I have been taught.
For many, the debt negotiations were as abstract and confusing as they were troubling.
Kurtis Kurpeski, 24, of Dorchester, said he tried to keep informed but found it frustrating to follow all the maneuvering.
“It changes all the time,’’ Kurpeski said. “I don’t even know what to believe anymore.’’
I KNOW WHAT NOT TO BELIEVE, though!
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Yeah, that's it!
And WHILE YOUR SOCIAL SERVICES are CUT the POLITICAL FUND-RAISING ROLL$ ON!
"Fund-raisers collect $10m for Obama " by July 30, 2011
WASHINGTON - Outside fund-raising groups supporting President Obama and Democratic candidates raised a combined $10 million during the first six months of 2011, providing the first glimpse into how Democrats intend to compete with outside Republican groups planning to pour millions of dollars into next year’s elections.
Priorities USA and Priorities USA Action, independent groups founded by former Obama White House aides Bill Burton and Sean Sweeney, said yesterday that they raised more than $5 million, while the research arm for the outside Democratic groups, American Bridge, collected $3.07 million. Political action committees supporting Democrats in the House and Senate raised more than $2 million.
The fund-raising totals were dwarfed by Obama’s campaign and the Democratic National Committee, which collected a combined $86 million from April through June, as many top donors focused on Obama’s initial fund-raising quarter.
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Also see:
A crisis of credit, credibility
Resolution of the federal debt ceiling stalemate shifted to a new stage last night as the House approved Speaker John Boehner’s $917 billion deficit-reduction plan along narrow partisan lines. The focus now is on the Senate, which promptly tabled the Boehner bill.
Their deal is almost done, and so am I.
Update: Most GOP senators blast Reid’s debt limit proposal
