Here is some breaking news. It seems that we have a French Bank getting nervous over US debt.

Thoughts? Comments? How long before that bank unfreezes these funds?

My goodness. Maybe our classical economist, Mr. L, can come in here and tell us why debt is not important?

Grizz, those are not federal debts; they are simply high risk (sub-prime) private real estate mortgages that were borrowed by Americans who were poor credit risks. Debt is important for the person who owes debt, if they are unable to pay it back.

I misunderstand exactly what is being said by the classic economists that John L loves to quote. Those guys seem to say that it doesn't matter how many trillions of dollars the federal government owes because
1. Most of the federal bonds/notes are held by Americans, or even by the Social Security Mistrust Fund.
2. So long as the federal debt (the fed govt.'s separate debt) is a tiny fraction of the GDP (an entirely separate measure of the entire private and public national economy), it wouldn't matter if the national debt measured 989 trillion dollars, because they can always issue more paper (in this case, US treasury bonds).
3. Most importantly, liberals are really conservatives.

But I don't see the relation between the French financial company and the suprime mortgage crisis, and the US federal debt. But maybe that isn't what you're talking about.

As I understand this subprime crisis, it's affecting the values of financial stocks (big banks and investment houses like Goldman Sachs), and it severely affected liquidity in the market. Several central banks injected countless billions of dollars into the market to solve part of the liquidity crisis.

Right. I'm talking about consumer debt in the US.

And what is wrong with consumer debt? Where would our economy be if everyone had to pay cash for their purchases??

Not arguing with you Nomad, but we'd all be a lot better off if we had fewer debts. The present crisis in lending, which extends worldwide, relates to mortgages to bad credit risks in the USA, subprime loans. The irony is that the crisis does not come from people just charging for unneeded cell phones and flat screen monitors, and not from govt. bonds from overspending govt.'s. These are secured mortgages on residential homes!

Run on countrywide. I won't be surprised if this gets worse.

So, you're inclined to think this is more than a long called-for correction of an overly hot housing market and easy and risky credit?

What are your thoughts of the foreign markets that are also in a downturn? Or, have I missed this somewhere in your previous posts?

How's the trip coming along to St. Elsewhere?