Default on debt affect on legal job market/upcoming OCI Forum
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Default on debt affect on legal job market/upcoming OCI
Any thoughts? I.e. firms reducing summer class sizes for the upcoming OCI as a conservative defense in case the economy tanks again?
- thesealocust
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Re: Default on debt affect on legal job market/upcoming OCI
I've got ears to the ground in both relevant worlds (Washington / politics and NYC / finance) and while everyone is frustrated, nobody thinks there's a real chance of default. I wouldn't worry.
- Bronte
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Re: Default on debt affect on legal job market/upcoming OCI
They're not going to default on treasury bonds. That would be catastrophic and would change the face of this country forever. It would cause another recession, and if yes that would negatively effect OCI.
- IrwinM.Fletcher
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Re: Default on debt affect on legal job market/upcoming OCI
Probably better drop out in anticipation of the coming disaster. Even if top 10% at HYS.
- rayiner
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Re: Default on debt affect on legal job market/upcoming OCI
Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
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- Bronte
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Re: Default on debt affect on legal job market/upcoming OCI
I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.rayiner wrote:Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
- rayiner
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Re: Default on debt affect on legal job market/upcoming OCI
The finance guys got caught with their pants down last time. This, they've had plenty of forewarning.Bronte wrote:I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.rayiner wrote:Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
- Bronte
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Re: Default on debt affect on legal job market/upcoming OCI
Yeah it's hard to stop a market panic though. A bond default would put us with the likes of third-world countries, like Argentina and California.rayiner wrote:The finance guys got caught with their pants down last time. This, they've had plenty of forewarning.Bronte wrote:I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.
- MrPapagiorgio
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Re: Default on debt affect on legal job market/upcoming OCI
LOL. Thank you for that.Bronte wrote:A bond default would put us with the likes of third-world countries, like Argentina and California.
- swc65
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Re: Default on debt affect on legal job market/upcoming OCI
There will be little to no consequence even if the deadline passes. There is a ton of money to service/rollover the debt. The fed can turn over its profits a month early (last year it turned over 80 billion to the treasury- it is obligated to turn over any profits from FOMC activities). If interest rates, spike uncle ben will turn on the printing presses, buy treasuries and keep the interest rates low until a debt ceiling hike is passed.
5 to 10 years from now when people dont want to lend to the us govt. because the debt burden is too high, then we might be in real trouble. But, the Fed could just inflate the debt away at that point anyway.
5 to 10 years from now when people dont want to lend to the us govt. because the debt burden is too high, then we might be in real trouble. But, the Fed could just inflate the debt away at that point anyway.
- Unitas
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Re: Default on debt affect on legal job market/upcoming OCI
Are you saying it will cause a major selloff of treasury bonds? If so, I disagree. IMO it may very well push people into American treasuries. Mainly because people will fear a selloff in stocks, leading them to go to the relative safety of treasury bonds, even though they are in default it is unlikely they will be there for long and the rates on them aren't showing any fear of them being in default for long.Bronte wrote:I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.rayiner wrote:Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
The biggest worry for students should be if they don't pay our student loans on time....
- swc65
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Re: Default on debt affect on legal job market/upcoming OCI
Since younger people vote less often than military people or seniors, it is totally conceivable that we would be last on the list.Unitas wrote:Are you saying it will cause a major selloff of treasury bonds? If so, I disagree. IMO it may very well push people into American treasuries. Mainly because people will fear a selloff in stocks, leading them to go to the relative safety of treasury bonds, even though they are in default it is unlikely they will be there for long and the rates on them aren't showing any fear of them being in default for long.Bronte wrote:I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.rayiner wrote:Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
The biggest worry for students should be if they don't pay our student loans on time....
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Re: Default on debt affect on legal job market/upcoming OCI
eh if that happens im pretty sure schools would extend tuition payment deadlines. Housing and other expenses would be an issue, though.swc65 wrote:Since younger people vote less often than military people or seniors, it is totally conceivable that we would be last on the list.Unitas wrote:Are you saying it will cause a major selloff of treasury bonds? If so, I disagree. IMO it may very well push people into American treasuries. Mainly because people will fear a selloff in stocks, leading them to go to the relative safety of treasury bonds, even though they are in default it is unlikely they will be there for long and the rates on them aren't showing any fear of them being in default for long.Bronte wrote:I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.rayiner wrote:Meh. I don't think there will be a recession even if there is a technical default. It is in the interest of the finance guys to not have the economy crash again and they'll rig up some magic to paper over it.
The biggest worry for students should be if they don't pay our student loans on time....
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- Tanicius
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Re: Default on debt affect on legal job market/upcoming OCI
Genuinely curious question, because you are literally the first person I've read who says anything to the effect of "There will be little to no consequence." Are there any economists or professors of economics who are predicting what you are predicting? If so, please throw me the link, because I want a little twig of optimism at this point.swc65 wrote:There will be little to no consequence even if the deadline passes. There is a ton of money to service/rollover the debt. The fed can turn over its profits a month early (last year it turned over 80 billion to the treasury- it is obligated to turn over any profits from FOMC activities). If interest rates, spike uncle ben will turn on the printing presses, buy treasuries and keep the interest rates low until a debt ceiling hike is passed.
5 to 10 years from now when people dont want to lend to the us govt. because the debt burden is too high, then we might be in real trouble. But, the Fed could just inflate the debt away at that point anyway.
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Re: Default on debt affect on legal job market/upcoming OCI
Me too. Because every prediction I've seen ends with us living in caves and fighting with sticks.Tanicius wrote: Genuinely curious question, because you are literally the first person I've read who says anything to the effect of "There will be little to no consequence." Are there any economists or professors of economics who are predicting what you are predicting? If so, please throw me the link, because I want a little twig of optimism at this point.
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Re: Default on debt affect on legal job market/upcoming OCI
all I know is I am looking forward to see how it plays out.. I've already said if I can't find a job after school I'm fleeing to a country with no extradition.. maybe at that point it will also be a better country to be in anyway!
- thesealocust
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Re: Default on debt affect on legal job market/upcoming OCI
I liquidated my portfolio and invested it all in malt liquor, common types of a munition, and a bear.Renzo wrote:Me too. Because every prediction I've seen ends with us living in caves and fighting with sticks.Tanicius wrote: Genuinely curious question, because you are literally the first person I've read who says anything to the effect of "There will be little to no consequence." Are there any economists or professors of economics who are predicting what you are predicting? If so, please throw me the link, because I want a little twig of optimism at this point.
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- AreJay711
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Re: Default on debt affect on legal job market/upcoming OCI
If there is a default or a deal with no change in spending (and a subsequent downgrade in US bond ratings) there would be a big spurt of legal work as everyone required to have AAA collateral would be SOL until they were able to work something out.... then we'd be fighting with sticks.
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Re: Default on debt affect on legal job market/upcoming OCI
AreJay711 wrote:If there is a default or a deal with no change in spending (and a subsequent downgrade in US bond ratings) there would be a big spurt of legal work as everyone required to have AAA collateral would be SOL until they were able to work something out.... then we'd be fighting with sticks.
The stick fights may not actually happen until after China invades to get all the money in our economy back, since they lent it to us.
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Re: Default on debt affect on legal job market/upcoming OCI
only like a trillion of it is from China.. not to make a trillion sound like peas.. but i mean we increased the debt by something like 1.5 tril just this past fiscal year.. we got bigger problems than China wanting their bread backRenzo wrote:AreJay711 wrote:If there is a default or a deal with no change in spending (and a subsequent downgrade in US bond ratings) there would be a big spurt of legal work as everyone required to have AAA collateral would be SOL until they were able to work something out.... then we'd be fighting with sticks.
The stick fights may not actually happen until after China invades to get all the money in our economy back, since they lent it to us.
- Unitas
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Re: Default on debt affect on legal job market/upcoming OCI
They would extend the tuition payments because they would still expect the cash. Landlords however could give a damn less.splitmuch wrote:eh if that happens im pretty sure schools would extend tuition payment deadlines. Housing and other expenses would be an issue, though.swc65 wrote:Since younger people vote less often than military people or seniors, it is totally conceivable that we would be last on the list.Unitas wrote:Are you saying it will cause a major selloff of treasury bonds? If so, I disagree. IMO it may very well push people into American treasuries. Mainly because people will fear a selloff in stocks, leading them to go to the relative safety of treasury bonds, even though they are in default it is unlikely they will be there for long and the rates on them aren't showing any fear of them being in default for long.Bronte wrote:
I don't know, it would have been in the interests of (most) of the finance guys not to have the last recession. The problem is that it will trigger a major bond selloff, which will drive up interest rates and probably result in a widespread flight from American assets in general. It would be really bad.
The biggest worry for students should be if they don't pay our student loans on time....
Another issue that would likely be an unexpected consequence if the US chooses to default would be a spike in strategic defaults on home loans. Think about it this way: Congress has already approved the spending and is now debating on whether they will allow the funds to be spent to cover that spending they authorized knowing full well what debt would be necessary. Now compare this situation to the concept of strategic defaulting. I owe the bank money that I know I would owe but now don't like the taste of that debt. So instead of paying it I choose not to pay it until a bank offers me a better deal or I just walk away. The issue of our government choosing to default on their loans, and it is a choice, makes it seem more worthy that as a citizen of that government I should be able to not pay for what I said I would or at least that it is acceptable for me to do so if the government does so. The analogy is somewhat strained but when something like 40% of homes are underwater people are looking for excuses to default and this may well be the tipping point that gives them enough justification to do so.
TLDR: Government is effectively strategically defaulting on their obligations; why can't society?
Last edited by Unitas on Mon Jul 25, 2011 11:06 pm, edited 1 time in total.
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- thesealocust
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Re: Default on debt affect on legal job market/upcoming OCI
Uh, society already can and already does.Unitas wrote:Another issue that would likely be an unexpected consequence if the US chooses to default would be a spike in strategic defaults on home loans. Think about it this way: Congress has already approved the spending and is now debating on whether they will allow the funds to be spent to cover that spending they authorized knowing full well what debt would be necessary. Now compare this situation to the concept of strategic defaulting. I owe the bank money that I know I would owe but now don't like the taste of that debt. So instead of paying it I choose not to pay it until a bank offers me a better deal or I just walk away. The issue of our government choosing to default on their loans, and it is a choice, makes it seem more worthy that as a citizen of that government I should be able to not pay for what I said I would or at least that it is acceptable for me to do so if the government does so. The analogy is somewhat strained but when something like 40% of homes are underwater people are looking for excuses to default and this may well be the tipping point that gives them enough justification to do so.
TLDR: Government is effectively strategically defaulting on their obligations; why can't society?
http://www.investopedia.com/terms/j/jingle-mail.asp
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Re: Default on debt affect on legal job market/upcoming OCI
Yeah, but when they gang up with India, Germany, Saudi Arabia, and Goldman Sachs, and they ALL come looking for their money...BlueDiamond wrote:only like a trillion of it is from China.. not to make a trillion sound like peas.. but i mean we increased the debt by something like 1.5 tril just this past fiscal year.. we got bigger problems than China wanting their bread backRenzo wrote:AreJay711 wrote:If there is a default or a deal with no change in spending (and a subsequent downgrade in US bond ratings) there would be a big spurt of legal work as everyone required to have AAA collateral would be SOL until they were able to work something out.... then we'd be fighting with sticks.
The stick fights may not actually happen until after China invades to get all the money in our economy back, since they lent it to us.
- Unitas
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Re: Default on debt affect on legal job market/upcoming OCI
Yeah, I know. But it isn't really commonly practiced and, I would say, most people still view it as morally wrong. Strategic defaulting also differs slightly because generally those people live in the home as long as possible without paying the debt owed to offset the loss of credit rating with the gain of cash saved and also strategic defaulters generally have the ability to pay the debt and choose not to. It used to be that only those that couldn't pay would send in their keys.thesealocust wrote:Uh, society already can and already does.Unitas wrote:Another issue that would likely be an unexpected consequence if the US chooses to default would be a spike in strategic defaults on home loans. Think about it this way: Congress has already approved the spending and is now debating on whether they will allow the funds to be spent to cover that spending they authorized knowing full well what debt would be necessary. Now compare this situation to the concept of strategic defaulting. I owe the bank money that I know I would owe but now don't like the taste of that debt. So instead of paying it I choose not to pay it until a bank offers me a better deal or I just walk away. The issue of our government choosing to default on their loans, and it is a choice, makes it seem more worthy that as a citizen of that government I should be able to not pay for what I said I would or at least that it is acceptable for me to do so if the government does so. The analogy is somewhat strained but when something like 40% of homes are underwater people are looking for excuses to default and this may well be the tipping point that gives them enough justification to do so.
TLDR: Government is effectively strategically defaulting on their obligations; why can't society?
http://www.investopedia.com/terms/j/jingle-mail.asp
- thesealocust
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Re: Default on debt affect on legal job market/upcoming OCI
It's commercially practiced all the time.
Seriously? What are you waiting for?
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