Chain reaction?

[Tulpen]

S&P Downgrades ACA to Junk Status

http://biz.yahoo.com/ap/071219/bond_...s_ratings.html

[FRED]

Re: Chain reaction?

S&P Downgrades ACA to Junk Status

http://biz.yahoo.com/ap/071219/bond_...s_ratings.html

There go the credit default swaps...

Now what was it that Mayer told us about OTC credit derivatives?

[Tulpen]

Re: Chain reaction?

And here is number two:

"Shares of MBIA Plunge on Fitch Warning After Insurer Details Exposure to Riskiest Debt "

http://biz.yahoo.com/ap/071220/mbia.html

[Tulpen]

Re: Chain reaction?

Another one: Ambac Financial Group Inc is under review by Fitch.

[santafe2]

Re: Chain reaction?

[...according to Peter Schiff, chief executive of Euro Pacific Capital] "Many municipalities get high credit ratings because their bonds are insured," said Schiff. "Higher borrowing costs for cities will force them charge higher property taxes, which will increase the strain on consumers.

I disagree with this assessment by the often quoted Mr. Schiff. In 2005 American consumers lost their real estate ATM and over the last 2 years their expenses have continued to rise as mortgages, health care, energy, food, etc, continue to climb in price while wages remain constrained.

To keep American consumers on as even a keel as possible over the next 5 years, government at all levels will be forced to moderate tax burdens. The Federal government will obviously continue deficit spending and may shift tax burdens back toward corporations and the super rich.

If the Mayors and Council members of local jurisdictions try raising taxes, even for very real and immediate needs, their constituents will toss them out on the street.