Posted on 10/22/2011 9:17:42 AM PDT by TigerLikesRooster
Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks
Joe Weisenthal | Oct. 22, 2011, 7:04 AM | 4,055 | 48
In an analyst note, Bofa/ML Ethan S. Harris drops a bit of a bombshell prediction:
We expect a moderate slowdown in the beginning of next year, as two small policy shocks—another debt downgrade and fiscal tightening—hit the economy. The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan. The committee is more divided than the overall Congress. Since the fall-back plan is sharp cuts in discretionary spending, the whole point of the Committee is to put taxes and entitlements on the table. However, all the Republican members have signed the Norquist “no taxes” pledge and with taxes off the table it is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts. The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.
(Excerpt) Read more at businessinsider.com ...
I’m not very savvy when it comes to banks and money.
Is it time to cash in my (5 yr) IRA at BOA?
It’s getting 3.49 % interest and is up in mid 2012?
Ha ha—of course, after the rating agencies find out BofA just transferred $55T in derivatives exposure to the FDIC-insured portion of their business.
P!
Got baked beans???
I hope you realize that your money is being used to speculate in derivatives.
BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit
Sleight of hand: BofA moves dodgy Merrill derivatives to bank
Oh, and your tax dollars are insuring their bets.
Talk about one hell of a hedging strategy - Bank of America executives win no matter what, taxpayers bear all the risk.
[’m not very savvy when it comes to banks and money.
Is it time to cash in my (5 yr) IRA at BOA?
It’s getting 3.49 % interest and is up in mid 2012?]
Let’s put it this way, the inflation rate is 3.5%.
Is this insider trading?
What’s the best way to get a consistent rate of return that exceeds 3.5%?
Dividend-paying stocks: energy, healthcare, large multinationals.
I’ve been getting right at 8% the last three years....
One reason some people don't like BOA...it's headquartered in North Carolina which is anathema to many in the NYC financial community.
Find a small biz with cash flow problems, good receivables, and orders on the books. Get them to give you 51% of the stock with a buyback clause for when they get healthy and a claim on receivables if you provide the cash they need.
One of my customers is in this boat. The Factoring Loansharks want 30%. They will be happy to pay you 15%.
The equity position is so that your profit comes in the form of capital gains....which is at ZERO percent under the small biz stimulus act of last year.
I really think the best deals are investing in small biz right now. The weak ones already died.
As to what to invest in, I like energy majors, cleel made some good suggestions, and you're not near as likely to have it melt down.
Remember, BOA went from 8 to 6 virtually overnight after Buffet invested 5 billion....
The last downgrade was strange and funny, in a way. Downgrade the dollar to show how risky it is, and gobs of rebels from various, pro-foreign and other interests pump it up higher by moving monstrous amounts into our treasuries. At least one of the future retaliations of that nature won’t be so funny, though. Eventually, that behavior will very adversely affect our exports and what’s left of American jobs (dollar too internationally high). IMO, the global markets aren’t really so free.
The economic collapse can be put off to buy time for all who will wisely use the time, but it appears that there’s no way out of a complete collapse.
That's my opinion too.
Maybe Australian bonds. Or a dividend stock like VGR
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