Posted on 01/09/2010 11:57:08 AM PST by FromLori
Snippet
In recent months, some of the brightest minds at Moody’s rating agency have been mulling a fascinating question: should they introduce a formal rating of “social cohesion” into sovereign debt indices, when they judge whether a government is likely to default on its debt – or not?
What is becoming clear is that hard numbers do not tell the entire tale. What will be equally crucial in the coming years is not the sheer scale of debt, but whether governments can implement a rational and effective way of cutting it – and potentially allocating pain – without unleashing (at best) political instability, or (at worst) full blown revolution.
Does a country, in other words, have enough political and social “cohesion” to take truly tough choices, or even rewrite the social contract?
However, in the US, the government has less experience of dividing up a shrinking pool of resources. Instead, in a land built by pioneers, Americans prefer to spend time thinking about how to make the pie bigger – or to find fresh frontiers – than about making shared sacrifices.
Thus it remains an open question whether Washington will be able to slash without real political or social upheaval. Signs of tension are already there: Bill Gross of Pimco, for example, this week warned that “our [American] government does not work any more; or perhaps more accurately, when it does it works for special interests and not for the American people”.
Stand by to see plenty more volatility and uncertainty in the government bond markets. The really big risk factors, be it in Iceland or the UK, the US or Ukraine, can no longer be easily factored into a spreadsheet.
(Excerpt) Read more at ft.com ...
Ping
Now I know why they wanted to brand the Americans who participated in Tea Party’s as Extremists. If I were Moody’s I would price in the cost of Revolution!
The great job fake-out
http://money.cnn.com/2010/01/08/markets/thebuzz/index.htm?source=ft
NO DUH
85,000? We’re Missing a Million of Them!
http://blog.atimes.net/?p=1304
Seriously. ADP payroll count was -84K on Tuesday. There’s only one way for that to happen, and everyone was expecting a +150K for the month.
http://www.calculatedriskblog.com/2010/01/adp-private-employment-decreased-84000.html
Shadowstats shows December unemployment at 22%. That’s only 3% from what it was in the Depression! Guess what? It went up in January!
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