Paulson Asks Congress to Raise Debt Ceiling
QuestionGirl July 31st, 2007 - 2:06 pmBecause 8.965 trillion isn’t enough.
From Forbes:
The US Treasury Department asked Congress today to raise the US debt ceiling, anticipating that the current cap on federal debt will be reached this fall.
In a letter to Senate Majority Leader Harry Reid of Nevada, Treasury Secretary Henry Paulson said the current ceiling of 8.965 trln usd would be reached in early October, and that Congress should raise the ceiling ‘as soon as possible.’
‘The actions that are available to the Treasury Department to take in order to avoid breaching the statutory debt limit would create unnecessary uncertainty for the financial markets and result in costs to the government,’ Paulson wrote. ‘These actions should be reserved only for extraordinary circumstances, and should be avoided.’
The letter was sent the same day Treasury said it anticipates issuing 73 bln usd of marketable debt in the July-September quarter, 31 bln usd higher than it anticipated earlier this year. Treasury said this borrowing would leave it with a cash balance of 60 bln usd at the end of this quarter, which analysts say is unusually high.
Treasury also said it anticipates issuing 74 bln usd in new debt in the first quarter of fiscal year 2008.
July 31st, 2007 at 3:56 pm
The financial blow out is here.
Not matter if the sky is the limit… is not more cash.
http://www.bloomberg.com/apps/.....refer=home
July 31st, 2007 at 9:45 pm
The financial collapse is clear.
Today
July 31 (Bloomberg) — Bear Stearns Cos., manager of two hedge funds that collapsed last month, halted redemptions from a third fund after a slump in credit markets prompted investors to demand their money back.
The Bear Stearns Asset-Backed Securities Fund had about $900 million invested in asset-backed securities, including mortgage bonds, spokesman Russell Sherman said today in a telephone interview. The fund was overwhelmed by redemption requests, Sherman said.
The fund’s stumble is a setback for New York-based Bear Stearns and illustrates how the crisis in the subprime mortgage market has spread. The fund had less than 0.5 percent of its assets in securities linked to loans to subprime borrowers, Sherman said. The two funds that collapsed invested almost fully in subprime bonds. Losses have spread to banks, insurers and hedge funds in France and Australia, including one run by Macquarie Bank Ltd.
“This shows you don’t necessarily have to be a subprime fund now to be having problems,” said Bryan Whalen, a portfolio manager in Los Angeles at Metropolitan West Asset Management, which oversees more than $21 billion in fixed-income assets.
Bear Stearns shares have dropped more than 25 percent this year on concern that the drop in subprime securities will hurt its income. The firm was the largest underwriter of U.S. mortgage bonds in the past two years, ceding the title to rival Lehman Brothers Holdings Inc. this year. Lehman shares have dropped 21 percent.
July 31st, 2007 at 9:47 pm
This hedge funds is a blood bath for the financial casino.
Bear Stears… Lehman Brothers… Goldman Sachs…. JP MOrgan…. and all the private bankers… where is the money from the investors?
G O N E.
July 31st, 2007 at 9:50 pm
Bloomberg today.
Bear Stearns shares have dropped more than 25 percent this year on concern that the drop in subprime securities will hurt its income. The firm was the largest underwriter of U.S. mortgage bonds in the past two years, ceding the title to rival Lehman Brothers Holdings Inc. this year. Lehman shares have dropped 21 percent.
Being `Prudent’
Bear Stearns has no plans to close the fund, which has $50 million in cash and gets about $13 million in principal and interest monthly, Sherman said. By suspending redemptions, the fund managers can avoid selling assets at depressed prices.
The Wall Street Journal earlier reported that the fund was up 5 percent this year through June, before its performance plummeted in July.
The fund’s managers can wait until the decline in mortgage securities is over because it owes no money, Sherman said.
“We don’t believe it’s prudent or in the interests of our investors to sell assets in this current environment,” Sherman said. “The fund portfolio is well positioned to wait out the market uncertainty.”
The two previous funds, the Bear Stearns High-Grade Structured Credit Strategies fund and the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage fund both filed for bankruptcy protection in the Cayman Islands today.
July 31st, 2007 at 9:52 pm
Oh, oh, oh…. the financial collapse is here….
Aug. 1 (Bloomberg) — Asian stocks fell after a U.S. lender said it lacks cash to fund new loans, reigniting concerns that a decline in the country’s subprime loan industry will curb growth in the world’s largest economy.
Macquarie Bank Ltd., Australia’s largest securities firm, plunged after it said investors in some of its high-yield funds may lose as much as 25 percent of their money amid the fallout in U.S. subprime mortgages. Sony Corp. led declines among exporters on concern the U.S. housing rout will dent consumer spending.
“Issues once specific to America are now flowing through to the rest of the world and there are fears of contagion,” said Hans Kunnen, who helps manage $117 billion at Colonial First State Global Asset Management in Sydney. “People are nervous because Macquarie looks and smells a lot like the companies that have been affected by this in the U.S.”
July 31st, 2007 at 9:53 pm
lacks cash to fund new loans,
lacks cash to fund new loans= tight credit=recesion + depresion.
Thanks to the Federal Reserve, the US TREASURE, the WAR and Cheney, and of course, KI$$$$$$$$$$$$$inger men that stole all the money… or can anyone tell me where are the trillions in losses?
July 31st, 2007 at 9:57 pm
Today I though that I was lunatic… when I read this… I wish…
July 31 (Bloomberg) — On Wall Street, Bear Stearns Cos., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Goldman Sachs Group Inc., are as good as junk.
Bonds of U.S. investment banks lost about $1.5 billion of their face value this month as the risk of owning the securities increased the most since at least October 2004, according to Merrill indexes. Prices of credit-default swaps based on the debt imply that their credit ratings are below investment grade, data compiled by Moody’s Investors Service show.
The highest level of defaults in 10 years on subprime mortgages and a $33 billion pileup of unsold bonds and loans for funding acquisitions are driving investors away from debt of the New York-based securities firms. Concerns about credit quality may get worse because banks promised to provide $300 billion in debt for leveraged buyouts announced this year.
July 31st, 2007 at 9:58 pm
Please remember this news.
July 31 (Bloomberg) — On Wall Street, Bear Stearns Cos., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Goldman Sachs Group Inc., are as good as junk.
July 31st, 2007 at 9:59 pm
Hey is our US Secretary of Treasure Mr. exGolden Sachs?
Connect the dots.
July 31st, 2007 at 10:00 pm
The swindle is over…
OVer, over, over… who understand the economics of the financial casino, will understand that is OVER.
READ: $300 billion in debt for leveraged buyouts announced this year.
July 31st, 2007 at 10:03 pm
`Wall of Worry’
Prices of credit-default swaps for Goldman, the biggest investment bank by market value, Merrill, the third largest, and Lehman, the No. 1 mortgage bond underwriter, also equate to a Ba1 rating, data from Moody’s credit strategy group show. Bonds of New York-based Goldman and Merrill are rated Aa3, seven levels higher than swaps suggest. Lehman is rated A1, the same as Bear Stearns.
About 1 percent of the thousands of companies followed by Moody’s have a gap of more than five levels between their actual and implied rankings, analyst Tony Smith said in a July 19 report titled “Broker Securities Climb a Wall of Worry.”
Spokesmen for the firms declined to comment or didn’t return phone calls. High-yield, or junk, bonds are rated below Baa3 by Moody’s and BBB- by Standard & Poor’s.
Credit-default swaps are the fastest-growing part of the derivatives market. Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates.
Bloomberg.com
July 31st, 2007 at 10:07 pm
Concerns escalated last week after banks including Goldman, Bear Stearns and New York-based JPMorgan Chase & Co., the No. 3 U.S. bank, were left holding $10 billion of loans they provided for the buyout of Chrysler, a unit of Stuttgart, Germany-based DaimlerChrysler AG, by Cerberus Capital Management LP in New York.
JPMorgan was among at least eight banks holding about $10 billion of loans for Nottingham-based Alliance Boots Plc, the U.K.’s biggest pharmacy
Bloomberg.com
August 1st, 2007 at 12:51 am
Here it comes, eh Bur$atil