Recently the U.S. hit its debt limit, which is the total amount that Congress has authorized the Treasury Department to borrow. Treasury Secretary Geithner warned that we will default on our debt in August if Congress doesn't pass legislation permitting the government to borrow more money to meet its existing obligations.
A recent Wall Street Journal article, “Own Government Bonds? Here's Why You Should Be Worried” http://tinyurl.com/3ukm66f wrote about these concerns. Various leading fixed income investors commented within the article, including Dan Fuss (Marquette alumnus and a close friend of the AIM program). Mr. Fuss is concerned and you’ll probably find this to be an interesting read.
The following is an excerpt of the WSJ article: “The professional attitude seems to be, 'What, me worry?,'" says Daniel Fuss, who oversees $146 billion in fixed income at Loomis Sayles in Boston. "But will this time because the perception that default is possible? I really am worried about that." Mr. Fuss says that as he visits institutional clients overseas, he keeps being asked, "What's going on? Why can't [the U.S.] get your act together?"
