Wall St. Makes Fallback Plans for Debt Crisis

Wall St. Makes Fallback Plans for Debt Crisis

www.nytimes.com

These companies are taking steps to reduce the risk of holding Treasury bonds or angling for ways to make profits from any possible upheaval. And even if a deal is reached in Washington, some in the industry fear that the dickering has already harmed the country’s market credibility.

On Wall Street, Treasuries function like a currency, and investors often use these bonds, which are supposed to be virtually fail-proof, as security deposits in their trading in the markets. Now, banks are sifting through their holdings and their customers’ holdings to determine if these security deposits will retain their value.

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I just visited my investments to see if there is any adjustment I could make that would help. Not really, nowhere safe to go. I think for now I might just start trading some of my dollars for Mexican pesos, they've been pretty steady and actually gained-up on the dollar the past couple years.

Deterioration of investor confidence in the United States could also hurt the value of the dollar, according to William H. Gross, co-chief investment officer of Pimco, a bond fund based in California. Mr. Gross said he believed that the dollar would become weaker because of the country’s inability to deal with its rising deficit. Instead, he favors currencies in China, Canada, Brazil and Mexico. Compared with the balance sheet of the United States, he said, “their dirty shirts are much cleaner.”

The less dollars I have to pull out for living expenses if this doesn't make the deadline, well.., the dollar would be hurting for awhile and my pension may not even be getting deposited on time. Good that I'm not dependent on having it month to month.

Even if they make the budget deadline it could hurt confidence in the dollar for quite a time. Other currencies sound like a decent option, at least for upcoming expenses for awhile. I don't see the dollar gitting immediately stronger right away.

BTW, does anyone know what happened to the former Soviet Union?

www.nytimes.com
(visit the link for the full news article)

I wonder if the Asian Markets are making plans...

reply to post by tracehd1

I wonder if the Asian Markets are making plans...

They are dumping their short term US Treasury bonds and starting a trend to decline overall long term US holdings. Considering there overall investments they have only moved a little of it so far, but it does look like they have had enough.

I just visited my investments to see if there is any adjustment I could make that would help. Not really, nowhere safe to go...

Did the same, The only option I could come up with was to get out of the stocks and bonds and pick up some commodities.I think money market accounts and mutual funds will get hammered.