Bond vigilantes will become more important in 2010. Not that they were not important before, but they were ignored. With the expected downgrade of Greece we will see more focus on credit. The overall size of debt to GDP will be an area of increased focus, so there will be more dollar negative talk. As perceptions of a debt problem in the US mount, it will be harder to find the marginal buyer of US debt. Rates will increase.
"Owe the bank $100, that's your problem. Owe the bank $100 million, that's the bank's problem." - JP Getty
Don't lend more to big borrowers whether real estate companies or countries.
Failures will occur. If failure is part of the system, it will happen regardless of what the government wants.
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