1. Shutdown Stupidity
In a Bloomberg Television interview last Saturday, the ratings agency's CEO Ray McDaniel said he sees a "very low" chance the U.S. will default on its debt payments as the standstill between President Obama and House Republicans continues. Treasury Secretary Jacob J. Lew said last week Congress needs to increase the debt ceiling by Oct. 17 or the U.S. will be "dangerously low" on cash and risk defaulting on its obligations.
"There's, we still think, a good chance that there will be resolution around the debt ceiling," said McDaniel. "Even if there's not resolution on the debt ceiling, we think that the likelihood that Treasury security payments would be prioritized highly is strong."What more do you need folks? Everybody's killing themselves for a deal and the single guy they are ultimately trying to please is telling you it's no big thing! Moody's has already blessed the U.S. with its top ranking, and now its boss says there is nothing to fear. So why should we? So what if Moody's and the other two blind mice -- Fitch and S&P -- nearly blew up the global financial system by blessing toxic mortgage bonds with pristine ratings? And who cares if they never really admitted that their so-called credit models were in fact a corrupt joke? Deal or no deal, if Ray McDaniel says our country's paper is riskless then it's riskless! That should be good enough for our Chinese bankers right? Or new incoming Fed Chief Janet Yellen, since at $85 billion a month, or whatever she hoovers up to keep rates low, she will soon replace Ben Bernanke as the biggest Treasury buyer around. Heck, when Standard & Poor's downgraded Uncle Sam's credit in 2011, yields moved lower! For all you stock-jockeys out there, that means that bond prices went up when our government's credit went down. That's why we here at the Dumbest Lab say "Screw it!" Let the president and House Republicans keep talking about a solution. Or not talking. The bond market's experts have deemed it just doesn't matter. Until, of course, it does. -- Written by Gregg Greenberg in New York Follow @5gsonthestreet