This is not yet one of those stuff-your-money-in-a-mattress moments.
Still, the talk in Washington of a federal budget crisis and possible default has given rise to all sorts of consumer fears of doomsday scenarios. Missed Social Security payments. Spikes in interest rates. Draconian cuts in government services.
But the most likely outcome, experts said in interviews this week, is that the nation’s credit rating will be downgraded a notch. And if that turns out to be the case, investors and borrowers should be able to ride out any volatility.
Over the last few days, financial advisers have tried to allay investor fears by sending notes to clients with the same message they have delivered in past periods of market uncertainty: As long as you’re diversified across different investments, the best action, in this case, is inaction.
MONEY MARKET FUNDS These funds hold 40 to 45 percent of the shorter-term Treasury debt outstanding, according to Deborah A. Cunningham, chief investment officer for money markets at Federated Investors. But if the nation’s debt rating were downgraded, these funds would not be required to sell the Treasuries they hold. In fact, a fund would not be required to sell in the event of a default, either, as long as the fund deems the securities to be safe and able to make their interest payments.
“The money market world asset flow, what comes in and goes out, has been pretty benign,” Ms. Cunningham said.
And she said she would not expect a downgrade to change those flows in any significant way. “The debt that is held in money market funds is so short in maturity that a downgrade will just not be an event that causes any kind of pricing concerns. As such, there shouldn’t be issues for investors.”
HOME LOANS AND CREDIT CARDS Fixed-rate mortgages generally track the 10-year Treasury note, whose interest rates would rise in the event of a downgrade. “The concern behind rates rising comes from the risk that investors — foreign and domestic — would rush to sell U.S. debt,” said Cameron Findlay, chief economist at LendingTree.com, noting that a sell-off would push the price of the debt lower, while causing its yield to rise. “So the question then is by what magnitude, and that remains the unanswered element everyone is struggling with.”
Shortly after a downgrade, he said, he would expect interest rates to spike a bit, though he said he did not expect rates on fixed-rate mortgages to rise more than half a percentage point to a full percentage point, at most. Nor did he expect a rise in rates to affect the pace of lending. After all, stricter credit standards are making lending difficult.
But once the federal debt issue is resolved, he said he expected mortgage rates to fall back to the range they are in now. Rates on a 30-year fixed mortgage averaged 4.52 percent for the week ending July 21, according to Freddie Mac. Though adjustable-rate mortgages typically do not track the 10-year Treasury note, experts said those rates could still move modestly higher.
Home equity lines of credit, meanwhile, track the prime rate, which is generally pegged to the federal funds rate. “Do we expect that to increase any time soon?” he asked. “We don’t. But if the risk of inflation increases, then, of course, the risk is that you will see that index start to increase.”
Credit cards are also pegged to the prime rate, so any increase in interest rates is more likely to be a result of broader economic factors or a decision by lenders to increase their profit margins. But as Greg McBride, a senior financial analyst at Bankrate.com, said, lenders must give borrowers at least 45 days’ notice before raising their interest rate, and that can be applied only to new balances.
STUDENT LOANS The interest rates on most private student loans are pegged to the London Interbank Offered Rate, or Libor, which is influenced by Treasury yields. So if the yields on government securities rise, student loan rates could rise as well, said Mark Kantrowitz, publisher of the FinAid and Fastweb Web sites. Borrowers taking out new loans, however, might see a greater increase in costs because of activity in the securities market backed by student loans.
Federal student loans are made by the government, which sells Treasuries to raise money to finance them. The government profits on the interest from the loans. If the government’s cost of borrowing rose, the government’s profit would decrease. But for now, since the interest rates are fixed, students would not necessarily see their costs rise unless Congress passed legislation to raise rates, he said. And then, the higher rates could apply only to new loans, he added.
The deficit reduction plan, which is likely to cut education spending, could have a broader effect on student lending. Some proposals, for instance, would cut subsidized interest on loans to graduate and professional students.
================================================
2011/07/26 美國瀕臨違約 中國無計可施？ Tom Orlik
就拿中國來說吧。截至5月底，中國持有至少價值1.159萬億美元美國國債。一旦美國違約，中國將成為損失最為慘重的國家。目前的局面已令中國感到擔憂。中國政府已屢次表達了對美國的不滿。渣打銀行(Standard Chartered Bank)的分析顯示，今年前四個月，中國大幅減少了將新增儲備資金用於購買美國國債的比例。但與其他美國國債的主要債權人一樣，中國並無採取任何可能損害美國國債價值的理由。
如此巨額資金轉移到其他投資對象並非易事。而關鍵在於，中國仍借助低估的人民幣繼續依賴出口導向型的增長模式。雖然中國的貿易順差正在縮小，但上個季度的貿易順差仍達460億美元。而為了穩定人民幣兌美元的匯率，中國央行仍需購買所有流入境內的美元。
但這些由貿易順差帶來的美元除了投資美國國債以外的其他選擇十分有限。歐洲的債務救助計劃對這一情況的改善可能是好消息，但歐洲的主權債務市場仍較分散，這意味著目前仍缺乏具有與美國國債相同流動性和質量的歐元債券。日本國債市場規模龐大，但2010年中國買入日本國債的舉動曾引發日本政府的激烈反應，日本一直對日圓的幣值非常敏感。
而上周中國外匯儲備的管理人發表聲明指出，石油和黃金市場的規模太小、波動性太大，無法容納其外匯儲備的投資規模。
鑒於主要的美國債權人並不急於拋售美國國債，美國國債收益率依然維持在較低水平，10年期美國國債收益率報2.97%。或許，美國領導人需要的就是市場的激烈反應，以迫使他們採取行動，就如同他們在金融危機期間否決問題資產救助計劃（簡稱TARP）導致市場暴跌後又重新考慮通過該計劃一樣。但美國國債的主要持有人不太可能拋售美國國債、進而引發美國國債市場的動盪，這對他們沒有好處。而中國政府的情況尤其如此，因中國仍需依賴美國消費者來推動國內的出口行業，同時也需要美國的國債市場來容納其不斷增長的外匯儲備。
================================================
2011/07/27 摩通：美信評若遭降 政府年增1000億美元負擔
美國政治角力戰若無法達成協議刪減赤字，恐令美國主權信評失去最高 AAA 評等，根據摩根大通 (JPMorgan Chase) 債市策略部主管預估，這將使美國政府每年增加 1000 億美元財務負擔，並拖累經濟成長速度。
摩通固定收益策略部全球主任 Terry Belton 周二 (26 日) 於美國證券業暨金融市場協會 (SIFMA) 主辦的一場記者會上預估，美國信評若遭調降，恐引發借貸成本升高，造成美國公債殖利率「中期而言」上升 60-70 個基點。
Belton 指出，信評遭降對美國公債殖利率衝擊相當大。每年增加的這 1000 億美元負擔，是為了支付更高的舉債利息，並奪取了原本用於其他產品及服務的支出。
Belton 補充，美國信評遭降對公債殖利率的「短期」衝擊，約僅僅 5-10 個基點。因為他預期，不太會有資產經理人因此被迫拋售美國公債。
Still, the talk in Washington of a federal budget crisis and possible default has given rise to all sorts of consumer fears of doomsday scenarios. Missed Social Security payments. Spikes in interest rates. Draconian cuts in government services.
But the most likely outcome, experts said in interviews this week, is that the nation’s credit rating will be downgraded a notch. And if that turns out to be the case, investors and borrowers should be able to ride out any volatility.
Over the last few days, financial advisers have tried to allay investor fears by sending notes to clients with the same message they have delivered in past periods of market uncertainty: As long as you’re diversified across different investments, the best action, in this case, is inaction.
MONEY MARKET FUNDS These funds hold 40 to 45 percent of the shorter-term Treasury debt outstanding, according to Deborah A. Cunningham, chief investment officer for money markets at Federated Investors. But if the nation’s debt rating were downgraded, these funds would not be required to sell the Treasuries they hold. In fact, a fund would not be required to sell in the event of a default, either, as long as the fund deems the securities to be safe and able to make their interest payments.
“The money market world asset flow, what comes in and goes out, has been pretty benign,” Ms. Cunningham said.
And she said she would not expect a downgrade to change those flows in any significant way. “The debt that is held in money market funds is so short in maturity that a downgrade will just not be an event that causes any kind of pricing concerns. As such, there shouldn’t be issues for investors.”
HOME LOANS AND CREDIT CARDS Fixed-rate mortgages generally track the 10-year Treasury note, whose interest rates would rise in the event of a downgrade. “The concern behind rates rising comes from the risk that investors — foreign and domestic — would rush to sell U.S. debt,” said Cameron Findlay, chief economist at LendingTree.com, noting that a sell-off would push the price of the debt lower, while causing its yield to rise. “So the question then is by what magnitude, and that remains the unanswered element everyone is struggling with.”
Shortly after a downgrade, he said, he would expect interest rates to spike a bit, though he said he did not expect rates on fixed-rate mortgages to rise more than half a percentage point to a full percentage point, at most. Nor did he expect a rise in rates to affect the pace of lending. After all, stricter credit standards are making lending difficult.
But once the federal debt issue is resolved, he said he expected mortgage rates to fall back to the range they are in now. Rates on a 30-year fixed mortgage averaged 4.52 percent for the week ending July 21, according to Freddie Mac. Though adjustable-rate mortgages typically do not track the 10-year Treasury note, experts said those rates could still move modestly higher.
Home equity lines of credit, meanwhile, track the prime rate, which is generally pegged to the federal funds rate. “Do we expect that to increase any time soon?” he asked. “We don’t. But if the risk of inflation increases, then, of course, the risk is that you will see that index start to increase.”
Credit cards are also pegged to the prime rate, so any increase in interest rates is more likely to be a result of broader economic factors or a decision by lenders to increase their profit margins. But as Greg McBride, a senior financial analyst at Bankrate.com, said, lenders must give borrowers at least 45 days’ notice before raising their interest rate, and that can be applied only to new balances.
STUDENT LOANS The interest rates on most private student loans are pegged to the London Interbank Offered Rate, or Libor, which is influenced by Treasury yields. So if the yields on government securities rise, student loan rates could rise as well, said Mark Kantrowitz, publisher of the FinAid and Fastweb Web sites. Borrowers taking out new loans, however, might see a greater increase in costs because of activity in the securities market backed by student loans.
Federal student loans are made by the government, which sells Treasuries to raise money to finance them. The government profits on the interest from the loans. If the government’s cost of borrowing rose, the government’s profit would decrease. But for now, since the interest rates are fixed, students would not necessarily see their costs rise unless Congress passed legislation to raise rates, he said. And then, the higher rates could apply only to new loans, he added.
The deficit reduction plan, which is likely to cut education spending, could have a broader effect on student lending. Some proposals, for instance, would cut subsidized interest on loans to graduate and professional students.
================================================
2011/07/26 美國瀕臨違約 中國無計可施？ Tom Orlik
就拿中國來說吧。截至5月底，中國持有至少價值1.159萬億美元美國國債。一旦美國違約，中國將成為損失最為慘重的國家。目前的局面已令中國感到擔憂。中國政府已屢次表達了對美國的不滿。渣打銀行(Standard Chartered Bank)的分析顯示，今年前四個月，中國大幅減少了將新增儲備資金用於購買美國國債的比例。但與其他美國國債的主要債權人一樣，中國並無採取任何可能損害美國國債價值的理由。
如此巨額資金轉移到其他投資對象並非易事。而關鍵在於，中國仍借助低估的人民幣繼續依賴出口導向型的增長模式。雖然中國的貿易順差正在縮小，但上個季度的貿易順差仍達460億美元。而為了穩定人民幣兌美元的匯率，中國央行仍需購買所有流入境內的美元。
但這些由貿易順差帶來的美元除了投資美國國債以外的其他選擇十分有限。歐洲的債務救助計劃對這一情況的改善可能是好消息，但歐洲的主權債務市場仍較分散，這意味著目前仍缺乏具有與美國國債相同流動性和質量的歐元債券。日本國債市場規模龐大，但2010年中國買入日本國債的舉動曾引發日本政府的激烈反應，日本一直對日圓的幣值非常敏感。
而上周中國外匯儲備的管理人發表聲明指出，石油和黃金市場的規模太小、波動性太大，無法容納其外匯儲備的投資規模。
鑒於主要的美國債權人並不急於拋售美國國債，美國國債收益率依然維持在較低水平，10年期美國國債收益率報2.97%。或許，美國領導人需要的就是市場的激烈反應，以迫使他們採取行動，就如同他們在金融危機期間否決問題資產救助計劃（簡稱TARP）導致市場暴跌後又重新考慮通過該計劃一樣。但美國國債的主要持有人不太可能拋售美國國債、進而引發美國國債市場的動盪，這對他們沒有好處。而中國政府的情況尤其如此，因中國仍需依賴美國消費者來推動國內的出口行業，同時也需要美國的國債市場來容納其不斷增長的外匯儲備。
================================================
2011/07/27 摩通：美信評若遭降 政府年增1000億美元負擔
美國政治角力戰若無法達成協議刪減赤字，恐令美國主權信評失去最高 AAA 評等，根據摩根大通 (JPMorgan Chase) 債市策略部主管預估，這將使美國政府每年增加 1000 億美元財務負擔，並拖累經濟成長速度。
摩通固定收益策略部全球主任 Terry Belton 周二 (26 日) 於美國證券業暨金融市場協會 (SIFMA) 主辦的一場記者會上預估，美國信評若遭調降，恐引發借貸成本升高，造成美國公債殖利率「中期而言」上升 60-70 個基點。
Belton 指出，信評遭降對美國公債殖利率衝擊相當大。每年增加的這 1000 億美元負擔，是為了支付更高的舉債利息，並奪取了原本用於其他產品及服務的支出。
Belton 補充，美國信評遭降對公債殖利率的「短期」衝擊，約僅僅 5-10 個基點。因為他預期，不太會有資產經理人因此被迫拋售美國公債。
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