This page has been archived and commenting is disabled.
Ironic "Scariest Chart Ever" Redux - America Will Surpass 100% Debt To GDP On Halloween
Earlier today we presented Bloomberg's Chart of the Day which represented the GDP and Debt per capita on a historical and projected basis, and we hysterically, and tongue-in-cheekly, dubbed it "the scariest chart ever" because it confirmed that at some point, very soon, US Debt will surpass GDP and never look back. We decided to dig into the actual numbers (cancelling out the per capital denominator as it is the same on both sides of the equation) and came to a very disturbing revelation: as of today, total US Debt, is $14.942 trillion (source), obviously an all time high. Q2 GDP as was reported by the BEA three weeks ago, was $15.012 trillion in current dollars. In other words, the spread between total GDP and total debt has now collapsed to an all time low $70 billion. Incidentally, this number was $1.8 trillion at the beginning of 2010. Then we decided to take a quick look at the upcoming bond issuance and find that tomorrow the Treasury will announce approximately $99 billion in 2, 5 and 7 Year bonds to be auctioned off October 25 through 27... With a very appropriate settlement date: October 31, elsewhere known as Halloween. Yes, ladies and gentlemen: All Hallows E'en will be doubly scary this year: for the first time since World War II, US debt will officially surpass GDP on Halloween 2011.
»
- 41745 reads
- Printer-friendly version
- Send to friend
- advertisements -
This might be a more meaningful comparison, if our debt was by the year. But debt isn't by the year... it's total. People like to fear monger including "unfunded liabilities" which they say are $60 trillion, or just make up some absurd higher number, in which case we have far passed that crossing point already.
try and type in "occupy" or "wall street" into youtube and see the power of the financial world...we are fools to try and sway them...bullshit
The Asian and middle eastern soverigns have been selling " usd " into Europe for the last week They are building f/x reserves.
They know what is happening with EFSF! The risk should be killing Aud right now. New York is going to kill trades.
the Australian dollar is getting really tired. It can't even gain any ground against the Euro!
I'm amazed it's hung on this long.
Total "Alice in Wonderland"-syndrome manifestation: The only things real are the things I say are real. So are European countries in default? Not when I say they are not! And no-one else is allowed to to contradict me.
*FT Germany: EZ wants to ban country ratings
(google translate):
EU wants to ban sovereign ratings
Exclusively in the euro debt crisis rating agencies are heavily under criticism: Their downgrades would exacerbate the mess the country is the accusation. The EU Commission is therefore trying to counteract with a radical proposal. by Mark Schrörs Brussels
Wants EU Internal Market Commissioner Michel Barnier prohibit rating agencies, if necessary, to publish judgments about ailing EU countries. In a confidential preliminary plan to reform the law on credit rating agencies Barnier proposes that the new Securities and Exchange ESMA is granted the right "to temporarily prohibit" the disclosure of assessments of the ability to pay. The draft guidance is the FTD.
The Commission states it is about, negotiating financial aid - about money from the EU rescue pot EFSF or the International Monetary Fund (IMF). A ban could prevent a rating comes in an "inopportune moment", "with negative consequences for the financial stability of the state and potentially destabilizing effects on world economy," says the draft.
With his proposal does Barnier drastic consequences of the euro debt crisis and the severe criticism of the creditworthiness of guards. Many politicians and economists accuse them to assess the situation of individual countries completely wrong and exacerbate the crisis with their judgments ever. Downgrades regularly provide turmoil in the markets.
The rating of a country has enormous significance for it, under what conditions it can finance its debts in the financial markets. A downgrade often leads to a downward spiral: For a country is it expensive to refinance, thus worsening his situation, which in turn pushes onto rating. Negotiating a land just about financial aid, this could mean that this support must be even greater.
Barnier believes the rating agencies underestimated the situation in such a moment one is not always correct, and therefore calls for the possibility of a ban evaluation. Currently receiving Greece, Ireland and Portugal, EU and IMF money. Many experts speculate, however, that other countries need help in the medium term - as Italy and Spain.
To what extent the new rules will take depends on when the law enters into force. Barnier has advised no later than the submission of November. Until that changes are possible. Then have yet to approve the European Parliament and the Member States. Before autumn 2012, it will hardly be able to enter into force.
In order for a ban is possible rating, in addition to ongoing aid negotiations of a state have more strict criteria must be met. Must review the problems in other countries, or threaten the EU financial system as a whole is compromised. ESMA will also coordinate with the other supervisors.
Barnier to improve ratings on government bonds, generally. The credit should guard their assessments at least every six months instead examine how far all twelve. In addition to the database of the judgments become more transparent. They should also not be available until after the close of trading on EU exchanges, but no later than one hour before their opening.
Overall, the provider Barnier hard. He urged the 27 EU Member States to ensure that investors can draw more civilly liable if they caused by "poor" rating damage. For complex structured finance products should also be prescribed two ratings, the forced rotation of the agencies used by customers to ensure greater competition.
Now I know where the option is in the down side of aud. love those (dnt) spreads. sorry eating nachos.
There is only one way to lower our debt...Turn that chart upside down!
In the past month alone our national debt rose by almost a quarter trillion dollars.
Talk about your witching hour....
Okay, I missed the call on this by 1 month (I had us pegged at crossing the line by the end of the last fiscal year, y-know, prior to the new budget being passed (darn it, hasn't passed yet, still missing 2011, 2010 budgets too)
The spin is that part of the debt is Intragovernmental, not public debt, the public debt is much less. Sure, give it fancy labels and hide what you can to make it seem that "alls well!"
Where are the Zombies when you really need 'em? (No, those congresscritters are not Zombies, they just make the Zombies look bad.)
Actually, I think debt blew past "real" GDP a long time ago. Keep in mind, ALL the boms,planes,bullets, tanks etc made every year is counted as part of the GDP. That, my friends is a chunk of change
Coach Factory Outlet
Coach Outlet USA
Coach Wallets
Cheap Coach Purses
Coach Outlet
Coach Purses Outlet
Coach Factory Outlet Online
Coach Outlet
Coach Store Outlet
Coach Outlet Online
Coach Outlet
Coach Factory Online
Coach Factory Store
Coach Bags
Nike Air Max
Our Coach Factory Outlet goal is to let everyone be able to buy the Coach Outlet USA for her own. Coach Wallets or Cheap Coach Purses in the cheap Coach Purses Outlet are available now with the best condition and Coach Outlet in the lowest price. Coach products from Coach Factory Outlet Online have classic design yet in top fashion sense. The artwork of Coach in the Coach Outlet is so delicate and distinctive, perfect in details. Coach Store Outlet is a great Coach Outlet Online store not only selling top Coach Bags but also other Coach accessories. Coach Outlet does not let you down on Coach quality, design and workmanship. Coach Factory Online also is a good place for you to enjoy Coach items. In this Coach Factory Store, you could get the best Coach Bags at the best price. So are other Coach accessories, like Coach shoes, Coach wallets or Coach jewelries. Of course, if you love other brand shoes, Nike Air Max is a top one for you! Welcome!