2012 – Corporate & Federal Debt Apocalypse?

March 17, 2010 by · Leave a Comment
Filed under: Credit News 

According to the NYT, in 2010 we will have over $700 billion in notes coming dues from the private and public sectors.  We could see a financial version of the hyped 2012 end of the world, by the lack of available credit for businesses as all these debt issues needs to be paid off and or borrowed.  It is mind-boggling that our own U.S. government is going to tap the markets for $2 trillion (With a “T”) in treasury auctions.

We need to get this spending under control, we are slowly mortgaging our country and if we keep doing this eventually foreigners will own a good portion of it.  If you don’t believe the last statement, Warren Buffet said the same thing on the News Hours when he was asked about the large amount of public debt.

New York Times – When the Mayans envisioned the world coming to an end in 2012 — at least in the Hollywood telling — they didn’t count junk bonds among the perils that would lead to worldwide disaster.  Maybe they should have, because 2012 also is the beginning of a three-year period in which more than $700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could overload the debt markets.

With huge bills about to hit corporations and the federal government around the same time, the worry is that some companies will have trouble getting new loans, spurring defaults and a wave of bankruptcies.

The United States government alone will need to borrow nearly $2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt.

Indeed, worries about the growth of national, or sovereign, debt prompted Moody’s Investors Service to warn on Monday that the United States and other Western nations were moving “substantially” closer to losing their top-notch Aaa credit ratings.

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