Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- President Joe Biden and House Speaker Kevin McCarthy will soon offer the clearest sign yet about whether a deal can be reached to avert a historic US default.
- McCarthy has sought a deal tied to budget cuts as a condition of increasing the debt limit, which would avert an unprecedented US default that could come in as few as 17 days.
- A default would sink markets, leave potentially millions out of work and hike borrowing costs for families and the US government alike.
- McCarthy on Monday said the two parties would have to have a deal by this weekend to push it through Congress in time to avoid default.
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- As talks over raising the U.S. government’s $31.4 trillion debt ceiling intensify, Wall Street banks and asset managers have begun preparing for fallout from a potential default.
- U.S. government bonds underpin the global financial system so it is difficult to fully gauge the damage a default would create, but executives expect massive volatility across equity, debt and other markets.
- Even a short breach of the debt limit could lead to a spike in interest rates, a plunge in equity prices, and covenant breaches in loan documentation and leverage agreements.
- Big bond investors have cautioned that maintaining high levels of liquidity was important to withstand potential violent asset price moves, and to avoid having to sell at the worst possible time.
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- The CEO of America’s second-largest bank is preparing for possible US debt default
- Congress is once again bickering about raising the debt ceiling, the amount of money the US government can borrow to pay its bills on time. And that means that Corporate America has to be ready for the worst.
- The CEO of Bank of America (BAC), America’s second-largest bank, told CNN he hopes lawmakers resolve their issues, because the market and economy love stability. Yet defaulting on the country’s debt remains a possibility that cannot be ignored.
- “We have to be prepared for that, not only in this country but in other countries around the world,” Bank of America CEO Brian Moynihan told Poppy Harlow on “CNN This Morning” Monday. “You hope it doesn’t happen, but hope is not a strategy — so you prepare for it.”
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While much of the world was focused on Greece and a potential default that could cause ripples throughout the European economy, another nation has announced they will be unable to pay their bills.
Puerto Rico governor Alejandro Garcia Padilla told the New York Times that the country’s economy was close to a “death spiral” and that it cannot pay the $72 billion it owes creditors.
“The debt is not payable,” García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”
“My administration is doing everything not to default,” García Padilla added. “But we have to make the economy grow,” he added. “If not, we will be in a death spiral.”
The self-governing U.S. commonwealth has been in a recession since 2006.
Gracia Padilla said that unless creditors come to the table and “share the sacrifices” made by the citizens of the country, it could be bad.
“If they don’t come to the table, it will be bad for them,” he told the Times. “What will happen is that our economy will get into a worse situation and we’ll have less money to pay them. They will be shooting themselves in the foot.”
Because Puerto Rico is a territory and not a state, it cannot file for bankruptcy in the same manner that Detroit, Michigan did in 2013.
