GOP Rep. Schweikert to press: "None of you were math majors, were you?”

All of the talk about default on the national debt is hyperbole by Democrats and their lapdog media. 

Another reporter asked Schweikert to respond to some doom-saying quotes from Chinese bankers. “I lay this at the steps of the administration and Jack Lew,” said the congressman. “The unconscionable, unacceptable use of language, the word ‘default,’ when the borrowing we need for 2014 is we’re 16 percent short on revenue. To use the word ‘default,’ to scare the markets—are politics really that important to this administration that it ignores basic math?”
Schweikert ticked off ways that he, as a county treasurer, had sought balance. “The basic repo desk, running your ladders on your debt—it’s stunning that the politicians in the administration care more about keeping this as a wedge than the international markets. Even Geithner made it clear that he had the ability to prioritize…. [T]here is no such thing as default unless there is an actual evil attempt from the administration. When you have 18 percent of GDP coming in in cash, less than 2 percent going out in debt coverage—I’m stunned you all fall for it in the press. None of you were math majors, were you?”

Interesting: Moody's calls BS on Obama's debt default scare tactic

We take in $250 million a month in taxes and the interest on the national debt is about $20 million a month. Only an idiot would default. Oh, Obama is President.

Via WaPo:

One of the nation’s top credit-rating agencies says that the U.S. Treasury Department is likely to continue paying interest on the government’s debt even if Congress fails to lift the limit on borrowing next week, preserving the nation’s sterling AAA credit rating.
In a memo being circulated on Capitol Hill Wednesday, Moody’s Investors Service offers “answers to frequently asked questions” about the government shutdown, now in its second week, and the federal debt limit. President Obama has said that, unless Congress acts to raise the $16.7 trillion limit by next Thursday, the nation will be at risk of default.
Not so, Moody’s says in the memo dated Oct. 7.
” We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.

Newest Bailout: Reverse Home Mortgages...

According to the FHA, who insure most reverse mortgages, a whopping 10% were in default last year.

Via BI:

The FHA insures some 90 percent of reverse mortgages purchased from private lenders. It says about 58,000 loans — or nearly ten percent of its reverse mortgages — were in default in 2012. That's up from 2 percent ten years ago.

The FHA says it faces some $2.8 billion in losses from the defaults, which could force it to seek a bailout from the federal government next year.

By halting the fixed rate standard HECM, the FHA said in testimony before Congress late last year that it hopes to prevent more defaults in the future.

"This does limit an option for people thinking about reverse mortgages, but you can understand why the FHA is doing this," Conway explained. "There's some real concern about people spending their cash too soon and defaulting."

Reverse mortgages are often thought of as a financial lifeline for seniors, especially with medical costs rising for an explosion of retiring baby boomers. More info here...

Sad: DNC defaulting on convention loan; sticks Duke Energy for $10 million

Anybody dumb enough to guarantee a DNC loan is getting what they deserve.  Is is sad democrats won't pay their bills.

The Democratic National Committee has no plans to repay Duke Energy for an unprecedented $10 million line of credit it guaranteed to help the Democratic convention’s local host committee put on President Obama’s three-day nominating convention in Charlotte, N.C., last September.

A Duke company official said the company was claiming the money as a business expense for tax purposes, meaning shareholders will foot $6 million of the cost, according to a report in the Charlotte Observer.

The large loan and the secrecy surrounding it have government watchdog groups deeply concerned. They say the arrangement raises serious conflict-of-interest issues for Mr. Obama and challenges his claim to be committed to disclosure and transparency.

Since guaranteeing the loan, Duke Energy previously had refused to disclose the payment terms or when it would come due. At the end of January a Duke Energy spokesman referred all questions about the loan to Dan Murrey, a surgeon in Charlotte who was chairman of the convention host committee.

Rasmussen: 42% of Americans think U.S. Debt Default is Somewhat Likely

Did you know America’s per capita government debt is worse than Greece?

Via Rasmussen:

Looking overseas at the catastrophic economic problems plaguing Greece and other European nations, a sizable number of Americans still think the United States is also a candidate for default in the near future. A new Rasmussen Reports national telephone survey finds that 42% of American Adults believe it is at least somewhat likely that the U.S. government will default on its debt in the next five years. Forty-eight percent (48%) now rate a national debt default as unlikely. (To see survey question wording, click here.)

If you thought the Greek financial mess was solved, think again.

The deal required Greece to get 95% of bondholders 50% cut in their holdings and accept new bonds with a lower premium by next Thursday. It doesn't look like that is going to happen. If the deal is imposed on bondholders, Greece will likely declared in default by credit rating agencies. This may bar them from getting the $170 billion loan they need to pay the bills.

Via Telegraph:

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.

Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.

While the markets have been ready for a Greek default for months, the move could leave Greece and its banks barred from funding from the European Central Bank (ECB). On Monday, Standard & Poor's declared Greece to be in a state of "selective default" which led to the ECB announcing it would no longer accept Greek government bonds as security for new loans.

The rating agency said its decision had been prompted by the threat of the CACs and the actual use of them is likely to tip Greece into actual default. The agency said it regarded the process as a "distressed debt restructuring".

Raoul Ruparel of Open Europe, the London-based think-tank, said: "Greece is likely to struggle to reach the targets for a voluntary agreement so the credit rating agencies are almost certainly going to see this as a default.

"What happens next is unknown territory. Read more here...

Germany preparing for Greece to default on debt

This has been inevitable for a long time. A country where hairdressers get early retirement because their jobs are deemed hazardous is unsustainable in the age of global economies.

The Telegraph reported:

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020. Keep on reading...