An announcement from Fitch makes our third warning shot across the bow of the US. Yesterday Fitch ratings issued a warning of a downgrade if the debt ceiling and financial affairs are not reviewed. Interestingly it appears that our very first “Taps” post on the subject is proving true, oddly in two ways.
- “…without any adjustments the rest of the players continue into the stack and create a dogpile..” This seems to have happened with the third rating coming joining the party.
- “…spirited headline, while extremely important, becomes forgotten …” This also seems to have happened, as I bet you did not even hear that Fitch downgraded the US yesterday!
Last evening Greece did manage to pass austerity measures needed to receive funds for assistance. While this is good news, it appears we have a repeat offender and may find a similar, yet more difficult vote soon.
Like many issues of this kind, Greece’s issue is not the only problem, the worry is contagion and exposure from other countries, in our opinion. Summer days, low trading volumes, end of quarter, and shortage of interesting headlines may lead to continued capital market surprises and dramatic headlines.
Today in the early afternoon, Big Ben will give his second live post FOMC interview. In his prior/first interview, he did extremely well in our opinion. We are interested in his continued conviction in the current US economic soft patch, and also any comments on withdrawal of stimulus dollars.
Lastly, I am near the east coast on a multi-day trip. Yesterday just as I arrived via car to my third destination town, my cell phone died. In a scene similar to Back to the Future, greater appreciation was earned for the convenience and dependence on today’s wonderful tech advances. Have you seen a pay phone lately? (They do not exist anymore!) After a four-hour stent at a local cell phone store, I am 100% back up and running, with no future complaints of a dropped call.
Thanks for your time this morning, this post was longer partially from the squashing of multi posts into one, created from my cell problems yesterday.
Have a Good Day!