In The News Today

Posted at 8:04 PM (CST) by & filed under In The News.

Debt ceiling: Fitch puts US credit rating under review
15 October 2013 Last updated at 17:33 ET

Ratings agency Fitch has put the US AAA credit rating under review for a downgrade as the deadline to raise the US borrowing limit draws closer.

The move comes after Democrats rejected a plan by the Republican-led House of Representatives as an attempt to appease a small group of conservatives.

The House plans to vote on a revised plan later on Tuesday, Republicans say.

The US must raise its $16.7tn (£10.5tn) debt limit by Thursday or risk default.

"The [Fitch] announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy," a US Treasury spokesperson said.

While Fitch said it expected the debt limit to be raised soon, it said "political brinkmanship" and "reduced financing flexibility could increase the risk of a US default".

During a previous fiscal standoff on Capitol Hill in 2011, another credit rating agency, Standard & Poor’s, downgraded the US rating from AAA to AA+.

More…

 

Treasury Bills Collapse
Submitted by Tyler Durden on 10/15/2013 11:52 -0400

As equities continue to press back towards all-time highs, the Treasury Bill market is growing increasingly uncomrtable that these "people" in DC will find a solution before the 10/17/13 bill matures (10/17/13 Bill +15 at 35bps now!). Dec VIX is continuing to diverge higher against stock exuberance as at least someone is hedging. Following the dismal tail in the 3- and 6-month bill auctions, it seems the US equity market’s dissonance is remarkable… It’s not just the short-dated Bills, Feb Bills are now 8-9bps higher in yield (triple the levels they started the day at!)

clip_image002

and stocks keep catching down to Dec VIX protection bid…

clip_image004

More…

Jim Sinclair’s Commentary

This was issued at 7:04 EST.

Fitch issues warning on U.S. credit rating
Tim Mullaney, USA TODAY7:04 p.m. EDT October 15, 2013

Fitch Ratings took a step toward cutting the U.S. government’s AAA debt rating Tuesday, as the clock ticked toward the Thursday deadline to raise the nation’s debt ceiling or risk default.

Chicago-based Fitch, the third-largest of the major debt-rating companies behind Standard & Poor’s and Moody’s Investors Service, put U.S. Treasury bonds on Rating Watch Negative, which is sometimes but not always a first step before a downgrade. Fitch said in a statement that it still thinks the debt ceiling will be raised in time to prevent a default.

Fitch said the government would have only limited capacity to make payments on the $16.7 trillion national debt after Treasury Department’s emergency measures run out Thursday.

More…