Morning Note: Bitch Slapped

It never matters until it does. I’m referring to the ever growing burden
of debt. It’s ok for a while as long as lenders continue to go along and
then a point is reached where enough is enough and it turns into an ever
tightening noose and lenders balk. Her Majesty’s Throne in the UK got
bitch slapped (sorry for not being politically correct) by S&P for their
profligate ways where “even assuming additional fiscal tightening, the
net general government debt burden could approach 100% of GDP and remain
near that level in the medium term.” Their AAA rating was affirmed but
the outlook went to negative from stable and S&P said their was a 33%
chance they would get downgraded. Fitch and Moody’s weren’t as alarmed
though and reaffirmed their AAA rating with a stable outlook. The Pound
is off its 6 mo high vs the $. With debt to GDP approaching 80% in the
US, maybe DC will pay attention. Claims and the Philly Fed are key

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