Holders of US Treasury Debt

Below is a pie chart representing the percentage of marketable U.S. treasury securities held by various investor classes as delineated in the latest Federal Reserve flow of funds report

Dagong cuts US sovereign rating one level to A, on par with Russia and South Africa

Patrick Chovanec talked to Bloomberg earlier today about the Chinese rating agency Dagong’s downgrade of US sovereign debt to Single-A. Chovanec says that Dagong is ‘hyper-senstive’ to US risk

Full Fitch Statement Shows US Downgrade Risk Remains In Play

Here is some more color on the Fitch comments on the US. First headline to hit the tapes was that the “deal reached is commensurate with AAA rating.” However, the full statement is that “commensurate with its ‘AAA’ rating, the risk of sovereign default remains extremely low.”

Chart of the day: tax burden in the US and globally

Despite the widespread view in the US that taxes are high, taxes in the US are relatively low both in the global and historical context. These two charts from the Globe & Mail make that plain

Staring into the eye of recession

After the US GDP revisions we saw on Friday, it is clear that the US economy is at stall speed. But globally, we are seeing a slowdown in Europe and emerging markets too, especially China. And the fact is monetary and fiscal policy are tightening in all three areas as well. To me, this speaks to a sharp global growth slowdown, which means Europe and the US will be “staring into the eye of recession” as Andy Lees entitled his note on which this post is based

Roach and Roubini: Chinese have lost confidence in America’s ‘dysfunctional economic stewardship’

Separately, both Nouriel Roubini and Stephen Roach, two leading American economists with differing views on the Chinese domestic economy have pointed out the concern China has with the dysfunctional US political system. Increasingly, the Chinese are showing signs that they are not pleased with tying up so much of their wealth in US dollars. How the Chinese plan to act upon their concerns is another matter, however

Chart of the Day: US – European Gap in Employment Ratio Virtually Gone

The employment-to-population ratio had been much higher in the US than Europe. This gap narrowed dramatically in the last decade and had almost disappeared by the end of 2009. Draw your conclusions about what this says about the different American and European economic models

USA Debt Crisis: Is There Any Truth?

Last week the NY Times covered the division within the economic community over the way out of the USA’s overspending / balance budgeting.

“Reasonable people can sit down and, apart from any political or policy motivations, come up with different answers,” said Robert S. Chirinko, a finance professor at the University of Illinois at Chicago who studies corporate taxation.

No doubt this is true. The economic community’s solutions range from more deficit spending stimulus (on the theory that boosting the economy will boost tax revenues to balance the budget) to out-and-out cutting spending (on the theory that re-balancing, while causing short-term pain, will spur long-term growth). Both extremes have some basis in main stream economic studies

Worrying weak macro trends in China, US and Europe

Economic growth warning signs are evident all around in recent data from the US, Europe and China. This should mean negative earnings surprises by Q3 earnings season

The debt ceiling debate: view from Germany

Here’s what Germany’s largest daily newspaper Bild Zeitung has to say about the politics in the US around the debt ceiling

Conceptualizing Forces Driving the Euro-Dollar Exchange Rate

Investors should consider monitoring the euro’s risk reversals to compliment the analysis of spot. The current reading suggests the market less comfortable with long euro exposure than the relative resilience in the spot market would seem to imply

This is what happens when there is a public record

You get the inevitable flip flop