Treasury Secretary Tim Geithner did his best on ABC News’s “This Week” to shoot down Moody’s speculation that the U.S. government could lose its triple-A bond rating.
Bloomberg follows with a detailed analysis of the long-term strength of the dollar (based on the handy Bloomberg Correlation-Weighted Currency Indexes), and why the greenback retains its position as the world’s reserve currency.
The amount of America’s government debt held by investors outside the U.S. rose 17 percent to $3.6 trillion in 2009 through November, according to the Treasury Department.
Purchases may continue to rise as investors seek refuge from growing sovereign credit risk in the euro area. The dollar “will benefit from relative liquidity of the U.S. Treasury markets,” Barclays Capital currency strategists led by David Woo in London said in a Feb. 5 report.
It’s a helpful bit of reporting amid a lot of wondering about whither the deficit, whither the debt, and whither the dollar. Basically, Bloomberg says the dollar is still as sound as, um, one.
—The Wall Street Journal surveys states struggling with their own budget shortfalls, and finds many considering an expansion of sales taxes to services such as lawn care, accountants’ advice, even hot-air balloon operators.
Some tax experts long have argued the most effective way to broaden the sales-tax base was to expand it into the service sector. Purveyors of goods can easily move across state lines or online, though services can’t easily do so. “You can’t get your plumbing fixed over the Internet,” said Michael Mazerov, formerly research director of the Multistate Tax Commission, an organization of state taxing authorities, and now at the Center on Budget and Policy Priorities, a liberal advocacy group in Washington.
Makes sense; no word yet on what happens when balloons cross state lines.
—The Hill updates on President Obama’s bold State of the Union pledge to double exports over the next five years, reporting the U.S. Trade Representative Ron Kirk met with business-friendly Democrats in Congress to talk about trade.
I still don’t know how he plans to double it.
—The Big Money paints a not-too-pretty picture of the student loan business, with a piece pointedly called Loan Shark U. It’s mostly built around this stunning fact: while college costs are soaring, “The amount that students can borrow in federally subsidized loans has remained almost unchanged for more than 15 years.”
—Finally, in case you missed it over the weekend, we enjoyed this bit of mortgage schadenfreude courtesy of the WSJ’s James R. Hagerty and The Washington Post’s V. Dion Haynes:
In the Journal:
Mortgage Bankers Association Sells Headquarters at Big LossThe story, noted by Ritholtz and CalculatedRisk, is subtle, but a fun irony-fest nonetheless. The Journal account seems to dig the knife in a little deeper; we’ll add a little emphasis:
John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. “We’re not going to discuss the financing,” he said. A spokeswoman for the MBA added that the MBA has reached “an agreement with all relevant parties” regarding the outstanding amount on that loan but declined to provide any details.
A spokesman for PNC, a banking company based in Pittsburgh, declined to comment.
Here’s another low blow: Looking up what the guy said last year:
In an interview late last year, Mr. Courson said he believed mortgage borrowers should keep paying their loans even if that no longer seemed to be in their economic interest. He said paying off a mortgage isn’t only a matter of personal interest. Defaults hurt neighborhoods by lowering property values, Mr. Courson said. “What about the message they will send to their family and their kids and their friends?” he asked.
And one more twist: the old press release:
When the MBA announced the purchase of the building in early 2007, the trade group’s president at the time, Jonathan Kempner, said: “We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association.” In October 2009, however, the MBA informed its members that it had put the building up for sale. At that time, the MBA said that continued ownership of the building, which was financed with $75 million of variable-rate debt, would be “economically imprudent.”
The MBA spokeswoman said some members have since then concluded that the trade group shouldn’t be in the business of owning real estate.
Great job on this. We enjoyed the Journal’s take especially.