Debt Recon May 15, 2011: How the borrowing landscape changed

Here’s what I saw through my financial binoculars as I looked at the borrowing landscape over the last week.

WSJ reported Bill Gross, head of PIMCO, is betting against the massive firepower and determination of the Fed by selling a big chunk of his treasury holdings.  We’ll see who has greater influence on the market.

WSJ.com and others reported Sheila Bair will step down as head of the FDIC.  She’s been a rare bipartisan leader who had a steady hand on the financial wheel during a difficult time.

The Calculate Risk blog had an excellent summary of the deep depression in home prices.  Nearly 30% of all single family mortgage borrowers in the U.S. are underwater.  It’s going to be a long, long slog to normal times.

WSJ.com and others reported that the U.S. debt ceiling has become a game of political chicken with Dem’s shouting the sky is falling and conservatives demanding substantial budget cuts.  A debt default will have a big impact on interest rates.  Some have suggested Treasury department asset sales instead of new borrowing.  A novel idea.

WSJ.com reported Atlanta’s Fed president Lockhart and others are convinced that core inflation is subdud and inflation expectations are anchored.  Both are a ingredients for the hot dish of low interest rates.

Read of these and other events of last week that changed the contour of the borrowing landscape on my Twitter feed.  Catch you next week.

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About Michael Shelton

Your Business Coach Facilitating Delegation and Work Group Engagement Michael Shelton has over twenty-five years of business and military accomplishments, including extensive experience with one of the largest, publicly traded real estate investment trusts (REIT). He is a qualified business coach with assignments in cross-functional work group management, strategic planning, unit leadership, joint venture acquisitions, executive education, mentoring, training and merger integration. Michael has accumulated best practices for building committed work groups from more than $4 billion of capital markets transactions and commercial property development. He served as a commissioned officer and helicopter pilot in the U.S. Army, and earned his MBA from The University of Arizona. Michael has served as a major conference panelist and is the author of Cash Flow Rich, Winning Ways to Evaluate and Finance Real Estate. Today, he helps business owners get more work group engagement as President and CEO of Shelton Business Services, LLC in Scottsdale, Arizona. Disclaimer: I don't offer investment, legal or tax advice. Talk to your broker, accountant or lawyer for investment, tax and legal help. I might own stock in the companies I mention on-line. My posts, tweets and other on-line activity are my personal thoughts and don't represent my employer or company.
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