debt ceiling

US CDS is based on treasuries (linked to a specific security - the co-called "reference obligation"), which according to the official offering document (see offering circular here), do not have a "grace period". Under such circumstances…

The US dollar is narrowly mixed against major and emerging market currencies. Comments by House Speaker Boehner that he will form a majority bloc to avoid a default by the Federal government is being understood two ways.

Safe assets are in short supply. If the US government shuts down for a long time, there will be a flight to quality. And the lack of safe assets will support the Treasury market.

It isn't yet clear how long the US government shutdown will last or what impact the shutdown will have. Nor is it clear that the US will escape a debt default down the road. Therefore, at this time all that reigns is uncertainty.

Yet again, the U.S. debt ceiling is going to become a political football that could threaten the U.S. and global economy. While I don't think the U.S. will default on its debt these recurring manufactured crises make the U.S. extremely…

As I have been predicting since the beginning of the year, I believe the Republicans will be able to force through some form of austerity before the budget battles in Washington are over this quarter. As the year began, we saw the fiscal…

Although the House GOP leadership has been divided on how to deal with the upcoming fiscal contests, they have apparently decided to raise the debt ceiling and focus on the sequester as I have predicted.

This analysis via Stan Collender and Greg Sargent on the political calculus Republicans in Congress have to make dovetails with what I wrote yesterday why a US government shutdown is likely. I think the analysis also makes sense for the…

Yesterday, I wrote why a US fiscal standoff should mean recession in Q2. As an adjunct to that, I wanted to add a few words about the political process on how we get the standoff to a government shutdown and recession.

Last Tuesday I said then that the debt ceiling fight would come first but that default on US public debt would be a step too far - and so Republicans would capitulate, forcing them to put their efforts into the sequester cuts. The biggest…