The only real solution for insolvent Europe is to explicitly default on the debt to a level that brings PIIGS countries to a debt to GDP ratio below 60%.
The Senate and House are expected to vote today on a throw together strategy to avoid a default on the debt ceiling ( more on what the debt ceiling is here).
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Equities and commodity markets in general are down sharply as investors worry that new elections may be held next month if no coalition Greek government is formed and that the Mediterranean country could be coming closer to a default on its debt obligations.
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Now that Washington has passed legislation to raise the debt ceiling, avoid a default on US debt obligations, the market is focusing again on the economy and whether or not a credit downgrade is on the horizon.
While Asian investors consider the possibility of a US credit downgrade to an unlikely scenario of a default on US sovereign debt, market declines were relatively tepid early out.
That Greece is, at some point, going to default on its public debt is a foregone conclusion.
In his pitch for abandoning the debt ceiling, President Obama incorrectly asserts that failing to lift it would result in a default on our debt.
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As a result, continued rhetoric and indications that either party might be willing to default on its debt will have the same effects as a real estate partnership that does the same: They will pay a higher interest rate and at some point if it continues long enough will have increasing difficulty borrowing money.
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It was a release valve that allowed the parties to reach a deal on the debt limit in the summer of 2011 to avoid sending the nation into default, with the understanding that a broader agreement on the debt and deficit would be reached.
The last debt ceiling battle between Congress and Mr Obama ended in July 2011, after bringing the nation close to default on its debt and resulting in a credit rating downgrade as well as financial market turmoil.
The idea behind Thursday's legislation, passed on a near party-line 221-207 vote, is to lessen the consequences of a U.S. default on its debt obligations if Congress and President Barack Obama can't find a way to lift the government's borrowing limit later this year.
Although the reopening went relatively smoothly, if confidence in the banking system does not properly recover, it is difficult to see how Uruguay can avoid a default on its foreign debt at some point.
This requirement would ensure that there is broad support in Congress for increasing debt as a share of the economy without its decision being held hostage to default on the debt or Social Security.
Privately, even IMF economists now seem to think it is a matter of when, not whether, Uruguay is forced to default on its foreign debt.
He has yet to specify whether he will default on the debt, or seek a voluntary restructuring.
This may not be very risky when defaults are few and far between, but if the economy falters and more companies start to default on their debt, there could be greater danger in a homemade portfolio of individual bonds.
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And since we can never default on our debt, there is never a reason to stop spending until unemployment drops back around 4% again.
Most Americans are more concerned about the games on their iPhone, the NFL labor strike, and assorted other bread and circuses, than the very real prospect that our 235-year-long narrative of increasing dominance could be suddenly over in a flash should we default or come close to defaulting on our debt.
The vote basically pushes off a potential default on our debt and allows us to borrow.
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If the US government does not find a solution to the debt ceiling and budget issue, default on some government debts is one possibility.
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If we do today what we have failed to do in the past, we very may well default on a portion of our debt.
The U.S. would not default on its debt unless the Obama administration made a positive decision to do so.
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It has every incentive to keep the payments up, since failure would trigger a default on all its World Bank debt.
They argue that such a rash move will cause the U.S. to default on outstanding debt obligations, thereby sending interest rates sharply higher across the board.
This downward spiral may have been exacerbated by Europe's efforts to cut the value of Greek sovereign debt without triggering a payout on credit-default-swap contracts.
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There are rumours that Greek banks have also been keen sellers of credit-default swaps on sovereign Greek debt, in effect doubling up on their exposure to a debt crisis.
There isn't agreement either on how those banks vulnerable to sovereign debt defaults should be recapitalised or how big a default Greece and others should be forced to undergo.
And no one on Wall Street really believed Congress would allow the debt ceiling to cause a U.S. default.
The development of credit-default swaps now gives investors the chance to speculate on, or insure against, a country's failure to repay its debt.
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