Kokomo Tribune; Kokomo, Indiana

State News

October 15, 2013

As default nears, investors shrug

Treasury says it will run out of money Thursday.

(Continued)

Treasurys are used as collateral in trillions of dollars of loans rolling over every day. They are also the standard against which the riskiness of stocks and bonds are measured. A default would cast doubt on the value of those assets and throw the global financial system into chaos.

Which is a key reason many seem unprepared for it: Why bother if you can’t really protect yourself? Or, as an official response from France’s Total oil company put it, “Nobody can imagine the consequences, so we don’t have any plans.”

Neither apparently does Sony Corp. “There isn’t a whole lot that one company can actually do,” CEO Kazuo Hirai said Friday at the company’s Tokyo headquarters.

Still, the business world isn’t entirely unprepared. Big U.S. companies have been hoarding cash since the financial crisis for fear of another credit crunch. And financial regulators, major banks and mutual funds have moved to shore up their defenses, too.

One area of concern is Treasury bills that mature shortly after Thursday. The fear is that owners of those bills may not get their money returned to them in case of a default.

As a result, the Hong Kong stock exchange is demanding that investors who use those bills as collateral in certain trades post more of them because they are riskier now. Funds that usually are filled with Treasury bills are scrambling to protect themselves, too. In a rare move, Fidelity Investments and JP Morgan Chase said last week they had purged their money market funds of all U.S. bills coming due soon after the default deadline.

Owners of U.S government bonds due later are less likely to get stiffed. But they’re still vulnerable. In the event of a default, Standard and Poor’s and other credit-rating agencies will consider those bonds higher risk and likely downgrade them. That could cause their prices to plummet, guaranteeing losses to sellers who can’t wait until the bonds mature. But the specter of a downgrade has yet to scare many.

Text Only | Photo Reprints
State News
  • Postal Service has 600 rural Indiana spots open INDIANAPOLIS (AP) — The U.S. Postal Service has openings for 600 part-time rural postal carriers across Indiana. The Postal Service announced the job openings Thursday in several ZIP Codes in the Greater Indiana District. It says interested applicant

    August 22, 2014

  • Police investigate bathtub death of Monticello boy MONTICELLO (AP) — State police say an investigation is underway into the death of a 5-year-old northern Indiana boy who reportedly was found not breathing in a bathtub. Sgt. Kim Riley says Ian Davidson died Thursday at an Indianapolis hospital, where

    August 22, 2014

  • Judge apologizes for remarks FORT WAYNE, Ind. (AP) — A northeastern Indiana judge apologized Thursday for saying at a public retirement reception for court staff members that one of the female retirees could have a second career as a phone-sex operator.Allen Superior Court Judge

    August 22, 2014

  • Worker dies after tractor pins him BUTLER (AP) — Authorities say a northeastern Indiana farm worker has died after a tractor dropped into a manure pit and pinned him.DeKalb County Sheriff Don Lauer tells The (Auburn) Star that Ignacio Casillas of Ligonier died at the scene of the acci

    August 22, 2014

  • Dissection Teen-24 [Duplicate] Cadavers, a teen, and a med school dream GARY (AP) — A 17-year-old Indiana high school student stands among the group of medical students, doctors and nurses working with a scalpel on a cadaver donor. His status isn’t obvious in the crowd, and his confidence seems to work as camouflage.John

    August 22, 2014 10 Photos

  • Slain journalist spent time with Indiana troops INDIANAPOLIS (AP) — The American journalist beheaded by the Islamic State extremist group had gone to Iraq with Indiana National Guard soldiers during a 2008 deployment. James Foley was embedded with members of the Indiana Guard's 76th Infantry Briga

    August 21, 2014

  • Hundreds attend vigil for missing SW Indiana women BOONVILLE (AP) — A few hundred people gathered at a prayer vigil for women missing in southwestern Indiana, including a 27-year-old mother of two children who was last seen nearly a week ago. Many in the crowd outside the Warrick County Courthouse in

    August 21, 2014

  • Friends honor Indiana teen killed in plane crash PLAINFIELD (AP) — Friends of a central Indiana teenager who died when the airplane he was piloting crashed into the Pacific Ocean honored him as his high school's soccer team played its first home game of the season. Dozens of people wearing white T

    August 21, 2014

  • New HUD sec. pledges revitalized Gary GARY (AP) — New U.S. Housing and Urban Development Secretary Julian Castro is pledging to use federal clout to help revitalize the city of Gary.Castro went to the beleaguered northwestern Indiana city on Wednesday and said its vacant downtown Sherato

    August 21, 2014

  • Stay denied in right-to-work case MUNSTER (AP) — A northwest Indiana judge has rejected a request by the Indiana attorney general’s office that he put on hold his order striking down the state’s right-to-work law until the state Supreme Court rules on a similar case.The Times of Muns

    August 21, 2014

Latest news
Featured Ads
Only on our website
AP Video
Japan Landslide Rescuers Struggle in Heavy Rain Raw: Severe Floods, Fire Wrecks Indiana Homes Endangered Red Wolves Face Uncertain Future Raw: Russian Aid Convoy Arrives in Ukraine Hamm Talks Emmy Chances Okla. Policeman Accused of Sex Assaults on Duty Raw: Egypt Bus Crash Kills at Least 33 Two Bodies Found in Adjacent Yards Dominican Republic Bans Miley Cyrus Concert Raw: Israeli Air Strike in Gaza Raw: Rescue Efforts Suspended at Japan Landslide Raw: Bodies of MH17 Victims Arrive in Malaysia Raw: Smaller Marches in Ferguson Attorney: Utah Eatery Had Other Chemical Burn Farm Resurgence Grows With Younger Crowd Microbrewery Chooses Special Can for Its Beer Ky. Firefighters Hurt in Ice Bucket Challenge Federal Investigation Will Look at Use of Force Community Deals With Michael Brown Aftermath US: We Do Not Pay Ransom to Terrorists
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries
Poll
Kelly Lafferty's video on Tom Miller