Marketplace Scratch Pad

Morning Reading

Scott Jagow Dec 10, 2009

Good morning. Some good stuff to get this Thursday started:

Are US Treasury bonds safe? (Wall Street Journal)

On its face, the probability of the U.S. defaulting on its spiraling debts seems highly unlikely. But that’s not what the markets think. The price of insurance against such a default–using derivatives known as credit default swaps–has jumped by more than 50% in the private market in recent months. According to CMA DataVision in London, a specialist in these contracts, it will now cost you 0.34% of the principal per year to buy default insurance on U.S. government bonds. If you held $1 million in Treasurys, insuring against default would cost you $3,400 for the year. A few months back, insuring those bonds would’ve cost less than $2,000.

The big fat catch-22: Reduce the deficit or create jobs? (The New Republic):

“The reality is that it’s not too hard to find a Wall Street analyst that says a second stimulus basically cancels itself out almost immediately because of the impact at this stage on government financing costs,” says one senior administration official.

Doesn’t sound like a recession in China (New York Times):

For more and more consumer goods, China is surpassing the United States as the world’s biggest market — from cars to refrigerators to washing machines, even desktop computers.

The Chinese market is “on full tilt — booming is an understatement these days,” said John Bonnell, the director of Asia vehicle forecasting at J.D. Power & Associates.

Leave the Federal Reserve alone (Washington Post) What George Will thinks:

If Time magazine has a lick of sense, Bernanke will be its Person of the Year because his leading role in stabilizing the financial system enabled the president to pursue other objectives. He did not do it perfectly, but he prevented paralysis…

Like the Fed, dentists are always important and urgently desired when pain is intense. But they are rarely objects of their patients’ affections.

What’s with the mixed signals on TARP (Christian Science Monitor)

High-tech companies lobby for R&D tax credit (NPR)

Journalists with jobs get very testy with each other on the air (Stupid Videos) Just watch it ’til the end.

Patchwork Nation: Ann Arbor, Michigan (PBS):

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