[Vexed]

$this->bbcode_second_pass_quote('', 'S')o, even post-peak oil, even after the collapse of the dollar, etc. the debate is all about the good ol' USA. Quite illuminating really.

[elroy]

$this->bbcode_second_pass_quote('', 'R')egulation for regulation's sake is always a disastrous endeavour. ... Politicians are certainly not going to spend any time thinking about this.

[spudbuddy]

We did say goodbye and good riddance to globalization.....
it hasn't shown up on this thread in quite some time, now.
To recap:
Global trade requires a lot of non-renewable energy (unless we wish to return to trade-wind assisted sailing ships.)
Global trade as practised by transnationals has encouraged a race to the bottom, as far as labor costs are concerned.
Global trade has killed a lot of living wage jobs in high-income countries, which has created enormous resentment.
To whit:

The $5-$10 dollar gallon of gas.
The upside down home equity fiasco.
The mid-career middle aged income drop.
The college-educated Starbucks supervisor.

To a good transnational, labor costs are like a bad hangover after a good drunk.
The idea is that we don't make things, we make money.
Workers just get in the way of that.
Workers are like a bad infection that invades the sanctified environment of sanitized, antiseptic corporate sensibility.

Enough money sits in offshore accounts to turn the whole damned thing around...meanwhile what we get is endless rhetoric about what we can't afford and why.

Global competitiveness has become the mantra for planetary suicide, shot straight from the hip.
A pissing contest. Mine is bigger than yours. Who cares how I got there?
-takes a lot of beer to to create that stream...
-takes a lot of oil.

Avoidance? Academics? Religion? Infotainment?
Whatever distraction suits your pocketbook, your mantleshelf, your dashboard.

Take a good look at the inside of a Wal*mart.
Take a good look at the uniformed squeeky smile of a McJobbed bottom feeder.
Take a real good look at the shifty-eyed smirk of the Fuehrer...
(whichever flavor suits your palet)
-the resentment aforementioned,
Seattle '99 was just a taste.

[Dezakin]

Guess the creative destruction of farm jobs in the industrial revolution was something you missed.

[deMolay]

Does it look to you that the economy is about to Tank? Companies have not been in such shape since the Depression
$88 billion in debt may become junk
By CAROLINE SALAS
Bloomberg News

More than $88 billion of U.S. corporate debt is teetering on the edge of investment grade and soon may join the record amount of bonds downgraded to junk this year.

Hertz Corp., the world's largest car rental firm, and radio broadcaster Clear Channel Communications are among 46 companies that probably will be categorized as noninvestment grade, according to credit-rating company Standard & Poor's.

A surge in debt-financed takeovers and concern that higher oil prices will hurt profit growth is eviscerating credit quality in the $5 trillion market for corporate bonds, according to some strategists.

Investors face greater risks, while companies once considered safe and now classified as so-called "fallen angels" may see borrowing costs rise.

Not since the Depression of 1929 has corporate America received so many black eyes. General Motors, the world's largest automaker, Sears Holdings Corp., the biggest U.S. department store chain, and Eastman Kodak Co., the largest photography company, led 27 borrowers whose $499 billion of outstanding debt obligations suffered the ignominy of being downgraded to junk.

And if history is any guide, there will be no rebound soon. "You don't see companies get downgraded and work their way up, by and large," said Greg Peters, head of U.S. credit strategy at New York-based Morgan Stanley.

Peters should know. His firm helped the finance unit of Ford Motor Co., the second-largest U.S. automaker, sell $750 million of bonds in March that S&P lowered to BB+, or junk, on May 5. Bonds rated below BBB- at S&P or below Baa3 at Moody's Investors Service are considered junk.


Twice the default rate
Fallen angels default at almost twice the rate of companies that never had investment-grade ratings, and seven of 10 stay junk, S&P said in a March study analyzing 24 years of data. The junk bond market is about $1 trillion in size.

"The credit cycle has probably already peaked," said Steve Kellner, head of credit portfolios at Newark, N.J.-based Prudential Investment Management's fixed-income group. The firm manages $163 billion in fixed income, including $13 billion in junk bonds.

S&P last week put the debt of GM and Ford under review for another downgrade because of concerns about North American losses and high gasoline prices. GM is rated BB by S&P, or two levels below investment grade.

The combined $320 billion in bonds sold by GM and Ford sent the dollar value of fallen angels past the $202 billion record set in 2002, which included the WorldCom downgrade.

The number of companies that became fallen angels this year is eight more than the same period of 2004. Hertz, which is the target of a leveraged buyout, and San Antonio-based Clear Channel, the biggest radio broadcaster, have the lowest investment-grade credit ratings, and may be lowered to speculative grade, S&P said.


618 companies on the brink
Overall, 618 companies are on the verge of having their ratings cut, compared with 318 that are poised for an upgrade, S&P said.

The firm has tracked the data for less than a year.

Companies with the highest junk ratings pay about 90 basis points, or 0.90 percentage point, more in yield than companies at the lowest end of investment grade, according to Merrill Lynch & Co. index data.

The difference represents an extra $900,000 in annual interest expense for every $100 million borrowed. The gap averaged about 104 basis points in 2004.

http://www.chron.com/cs/CDA/ssistory.mp ... ss/3387898

[jmacdaddio]

With the federal gov't borrowing at insane levels, it's no wonder US companies have fallen in line, not to mention everyday US consumers. Scary stuff.

[rogerhb]

How do you win a war? Cut taxes and no-bid reconstruction contracts.

How do you rebuild a city? Cut taxes and no-bid reconstruction contracts.

There is a pattern forming here.

[jaws]

The North American economy has been trashed by 10 years of insane government intervention in the US and it is now coming apart. The Asian economy looks to be semi-autonomous now and it will probably go through the US crash with a simple recession. The European (continental) economy is waking up after a few years of underinvestment and deflationary growth, and the promise of political-economic reforms is attracting back investors (most of whom are fleeing the US).

[rogerhb]

$this->bbcode_second_pass_quote('jaws', 'T')he North American economy has been trashed by 10 years of insane government intervention in the US and it is now coming apart. The Asian economy looks to be semi-autonomous now and it will probably go through the US crash with a simple recession. The European (continental) economy is waking up after a few years of underinvestment and deflationary growth, and the promise of political-economic reforms is attracting back investors (most of whom are fleeing the US).

[jaws]

$this->bbcode_second_pass_quote('rogerhb', '
')Hmm, the evils of moderated socialism, they may fare better than the nation formally known as the US of A.

[Eli]

Oh please, Asia only has been doing well cause they sell all the crap they make in the US market.

To think that Europe is going to fare better when Germany already has high unemployment is nuckin futs. The massive social welfare programs in Europe are not going to keep on going in the face of higher unemployment and the programs will drag them down fast when the tax base is destroyed.

China and all of Asia will do well in the future when they get their fusion reactors on line. As long as China has cheap and non-polluting energy sources they will do well. I predict in the year 2020 every family in China will have a flying car.

China has been buying all the US debt and guess what?
The US can't pay but thanks for all the great stuff.

Do not kid your self the fall of the US economy and wait for it... PO is going to completely screw this big blue ball.

[aldente]

$this->bbcode_second_pass_quote('deMolay', 'S')an Antonio-based Clear Channel, the biggest radio broadcaster, have the lowest investment-grade credit ratings, and may be lowered to speculative grade, S&P said.

[UIUCstudent01]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('rogerhb', '
')Hmm, the evils of moderated socialism, they may fare better than the nation formally known as the US of A.

[jaws]

$this->bbcode_second_pass_quote('UIUCstudent01', '(')Unless you, of course, meant socialist in regards to the rich...)

[Colorado-Valley]

Heh, heh ... that's about right.

[deMolay]

I think it is the massive trade imbalance with China and India that has bankrupted the USA. China has 700 million workers who work without safety concerns or enviromental concerns for .03 cents an hour. The west is awash in well made cheap asian goods. The US having to bare the burden of world policeman has unfairly penalized them as well. The decent into chaos has begun. I think before it is over those that see China as a saviour will find the that rowing on the communist slave ship will produce a lot of misery and death.

[rogerhb]

$this->bbcode_second_pass_quote('deMolay', 'T')he US having to bare the burden of world policeman has unfairly penalized them as well.

[oilluber]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('rogerhb', '
')Hmm, the evils of moderated socialism, they may fare better than the nation formally known as the US of A.

[DesertBear2]

$this->bbcode_second_pass_quote('UIUCstudent01', '
')In what ways is the USA 'socialist'?

[cornholio]

Re: US "socialism" and "safety net"... (Medicare/Medicaid, Social Security) are "pay as you go." When the demographics of the baby-boomers retirement encounters a declining workforce and peak oil there will be a choice... Reduce social programs drastically or increase taxes. As the aged Republican baby boomers will be a voting majority Im guessing that tax increases will be in our future : ( I dont think we can blame these social programs for our current demise, but wait a few years...).