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Re: My God, you are an idiot.
Quote:
Originally Posted by Tyrone Slothrop
I think this is the wrong way to think about what will happen. I would be surprised if you see a huge change in where capital is invested. People are not going to stop buying Treasuries. BUT, rates will change. Many different types of bonds will get more expensive, and none are going to get cheaper. A company or government in another part of the world is not going lend money for less than they do today, just because buyers are going to find other options less attractive. To the contrary -- they may be able to ask more than they do today, since there will be fewer alternatives.
It's like a huge, massive tax.
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I don't think this is right at all. Ask the states that have already been downgraded whether it is harder and more expensive to borrow money.
I can tell you I know investment bankers who believe most of the deals they are currently working on will die if there is a default, and will be deeply troubled if there is a downgrade.
And if those deals die, law firm revenues are going to suck wind.
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Last edited by Greedy,Greedy,Greedy; 07-25-2011 at 05:38 PM..
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