Analysis and discussion with Doug Smith of Standard Chartered Bank. He talks about the flexibility of U.S. economy and the lack of “stress” in the US Treasury’s stress tests.
US financial firms have an substantial amount of debt outstanding… and this explains the concern of global investors about the solvency of the US banking system.
It’s a political decision now whether the federal government will continue injecting and guaranteeing capital for the too-big-to-fail banks…. while simultaneously refusing to do the same for California and other municipalities.
Standard and Poors is reviewing the credit rating of the United States… and the Treasury is scheduled to auction $162 billion next week… hold tight… this will be an important indication of global appetite for US paper…
(Bloomberg/Asia Confidential… running time = 3 minutes)