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2023-02-09 Government Corruption
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Bank of America urged to prepare for default
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 Direct Translation via Google Translate. Edited.
Commentary in italics by Russian military journalist Boris Rozhin:
[ColonelCassad] The US should not rule out the possibility of a default on financial obligations, Brian Moynihan, head of Bank of America, told CNN. Congress is arguing about raising the debt ceiling because the government has no money. This means that it is time for American business to prepare for the worst.
Congress is once again arguing about raising the national debt ceiling
| ...the Democrats are arguing, anyway. The Republicans who control the House are thus far refusing... |
- the amount that the US government can borrow to pay its bills on time. And this means that it is time for corporate America to prepare for the worst.
As the CEO of Bank of America (BAC), the second largest bank in the country, told CNN, lawmakers would do well to solve all the problems, because the market and the economy love stability. However, the possibility of debt default cannot be ignored.
“We need to be ready for this not only in our country, but also in other countries of the world,” Bank of America CEO Brian Moynihan said on Monday. “ You hope it doesn’t happen, but hope is not a strategy, so you have to be prepared.”
President Joe Biden may address this topic in his annual State of the Union address. US Treasury Secretary Janet Yellen has already warned Congress that the country could default on its financial obligations as early as June if it fails to raise the debt ceiling by that time.
Subsequently, Yellen said that the absence of an agreement to limit the debt is fraught with a "global financial crisis." The Treasury is currently taking "extraordinary measures" to ensure that all payments are made on time.
The recent dramatic events around the debt ceiling have led to a number of calls for the government to get rid of it completely. Iron argument: political squabbles should not prevent the country from fulfilling its financial obligations.
Moynihan is not particularly enthusiastic about this idea. When asked about lifting the debt ceiling, he replied that "a discussion is needed about our confidence that the country is living within its means."
“The Congress has the appropriate financial resources. I would not be reckless in trying to restructure the US constitution. I think we should leave it alone and make sure it works properly.”
However, he acknowledged that since 2020, due to the COVID-19 crisis, the government has had to spend heavily on various stimulus programs, taking on a lot of debt over the past couple of years to overcome the pandemic and level its impact on the economy.
The US economy quickly recovered from the effects of the brief downturn caused by the coronavirus. So much so that inflation has become the biggest problem for the country and the Federal Reserve.
Over the past year, the Fed has been actively raising rates in an attempt to keep it in check. And it worked, but the US labor market remains surprisingly strong. “The unemployment rate remains very low. Extremely low,” Moynihan said. "That's one of the problems for the Fed."
In this regard, according to him,Bank of America continues to forecast a “moderate recession” going forward, although the start date is continually being pushed back. He argues that raising rates could hurt corporate profits, but the good news is that most citizens are still working, earning and spending.
Moynihan also didn't seem overly concerned that the geopolitical tensions between the US and China sparked by the recent spy balloon incident would have a long-term impact on the global economy.
He stated that given the importance of China in the global supply chain, no one is interested in escalating economic tensions.
“It's interesting to watch all this fictitious struggle between the two countries, but from a purely economic point of view, free trade is undoubtedly the best thing in the world.”
https://inosmi.ru/20230208/defolt-260439482.html - zinc
https://edition.cnn.com/2023/02/06/investing/bank-of-america-ceo-brian-moynihan-debt-default /index.html - original in English
Of course, the debt ceiling will be raised again. Precisely to avoid an immediate default on government obligations.
But the general problem of debt growth has not disappeared and the problem is getting worse, which is why its discussion has reached the level of the top management of the largest American banks.As for the "discussion about living within one's means," it is obvious that the United States has long been living beyond its means, including by issuing unsecured dollars.
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Posted by badanov 2023-02-09 00:00||
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Posted by Super Hose 2023-02-09 12:33||
2023-02-09 12:33||
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