Barrel Strength

In an earlier article your correspondent noted that the “Social Security program is projected to be in deficit by 2016″, based on Congressional Budget Office projections.  Now it seems that that threshold has been crossed.  This  news report states that Social Security is already in red.

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

This might explain another anomaly in the fixed income markets that was reported by WSJ today.

Something troubling has occurred in the market for default protection on the debt of the world’s biggest borrower.

As the folks at Standard Poor’s Valuation and Risk Strategies division noted in a research note Monday, the difference between the spread on U.S. sovereign credit default swaps and an equivalent benchmark for AAA-rated euro-zone sovereigns flipped into positive territory March 12. As U.S. CDS spreads expanded to their widest levels in two years, that cross-region gap blew out to 5.7 basis points last Friday before narrowing to 4.7 Tuesday.

Wider CDS spreads indicate that sellers of insurance against a particular issuer’s default are charging more for it. In effect, the positive U.S.-versus-euro zone spread means investors think the risk of a U.S. default–however remote–is greater than that on euro-denominated sovereign debt.

NYT editorial seem to be oblivious to all this.

We were, briefly, chilled when the credit rating agencies — Moody’s, Standard and Poor’s, and Fitch — warned that they might have to downgrade the triple-A debt of the United States if it failed to bring its budget deficit under control. Then we remembered it was not too long ago that these agencies were tripping over one another to bestow triple-A ratings on many of the incomprehensible financial confections the banks crafted out of mounds of dicey mortgages…

We also suspect the downgrade will never happen since downgrading the United States would probably require downgrading all the American banks — the agencies’ main clients.

Even if it did, it is hard to envisage that it would have a huge impact. Despite all the concern expressed by raters, Republicans and Wall Street talking heads, the yields on Treasury bonds are at their lowest levels in 30 or 40 years. Investors still seem to trust the Treasury more than they do the raters.

But then what would you expect from NYT editors, the oracles of the explored universe, who on January 13th, 1920 shared this insight regarding rockets and space exploration.

The full weight of scorn, however, was reserved for the lunar proposal: “after the rocket quits our air and really starts on its longer journey it will neither be accelerated nor maintained by the explosion of the charges it then might have left. To claim that it would be is to deny a fundamental law of dynamics, and only Dr. Einstein and his chosen dozen, so few and fit, are licensed to do that.” It expressed disbelief that Professor Goddard actually “does not know of the relation of action to reaction, and the need to have something better than a vacuum against which to react” and even talked of “such things as intentional mistakes or oversights.” Goddard, the Times declared, apparently suggesting bad faith, “only seems to lack the knowledge ladled out daily in high schools.”

Of course the only thing Dr. Goddard did was to build and launch the first liquid-fueled rocket, so it is understandable that his knowledge of rocketry was deficient, especially when compared to editors at NYT.  No report on what knowledge the editors of NYT might lack.

More hypocrisy from liberal shills for islamists:

According to the Washington Post this morning, there’s consternation again about a building plan in Jerusalem:  ”The United States had previously objected to the project, which would be built on the site of the Shepherd Hotel, the former home of the late Haj Amin Husseini, a former mufti, or Islamic law scholar, of Jerusalem.”

Haj Amin Husseini and new German BFF

Just your average “Islamic law scholar,” I guess.  Oh, and yes, this picture — as well as Husseini’s efforts to recruit Muslims for the Waffen-SS, as well as his efforts to slaughter Jews throughout Tel Aviv and Jerusalem — happened before there was any such “obstacle” as “settlements.”

Though feted in Germany, he was less of a hit in the rest of Europe:

In 1945, Yugoslavia sought to indict the Mufti as a war criminal for his role in recruiting 20,000 Muslim volunteers for the SS, who participated in the killing of Jews in Croatia and Hungary.