Now, back to the important things.
The European Union is struggling to find a way to bail out the government of Greece in the face of its being unable to pay its debts.
Countries - like Greece and the U.S. - borrow money to run their operations by selling bonds.
The Obama Administration is claiming that if the Congress doesn't vote to raise the debt limit by August 2, 2011 then the U.S. Treasury will not be able to pay off whatever loans are falling due (nor issue new Treasury bonds) and this will lead to really big problems.
No one really believes the U.S. will default on its sovereign debt. As of yesterday afternoon 10 year Treasury bonds were selling at yields of 3.08 percent.
In contrast to that, just about everyone fears the Greeks may default on their debts, and so their 10 year bonds sold this week for yields of nearly 17 percent.
Let's say American wants to buy a car for $20,000. If we finance $15,000 of it at 3 percent for four years our monthly payment would be $332.01.
If Greece want to buy that same car, but had to pay 17 percent interest, its monthly payment would be $432.83 - a $100 per month more.
Expand $15,000 to $15 billion and you can see what that higher interest rate can mean to a struggling economy.
Even though I watch CNBC each and every morning, I have no idea whether or not a failure to raise the U.S. debt limit will be the second coming of the collapse of Lehman Brothers.
Fed Chairman Ben Bernanke thinks it could be a very, very bad thing, indeed. According to the Wall Street Journal:
"Failing to raise the debt limit could cause 'severe disruptions in financial markets,' including ratings downgrades of U.S. government debt and damage to the special role the U.S. dollar and Treasurys currently enjoy in global markets, the Fed chief said."
U.S. banks, ever sensitive to the public good, have made it known they are, according to the Financial Times:
"preparing to cut their use of US Treasuries in August as a precaution against any turbulence that could follow if warring Republicans and Democrats fail to increase soon the US debt ceiling."
A good deal of the U.S. debt is owned by China. Did China buy these bonds because they wanted to be our BFF? No. They bought the bonds because they know they are guaranteed to be repaid.
The Chinese could have bought Greek bonds with the possibility of making nearly six times the return on their investment but, as we're seeing, the likelihood of holders of Greek bonds being repaid fully and on time is looking increasingly dim.
A good deal of these bonds - known as sovereign debt - are held by large banks. Large banks, as we know, get extremely cranky when borrowers can't make timely payments on their loans.
Banks often demand collateral if they are loaning you money. You have to pledge that car, your home, the inventory of your business, or whatever to have something the bank can seize should you default.
Bond holders don't have a claim on the national rail system, the Parliament building, nor a Greek Isle if the host country defaults on its payments.
Sovereign debt is backed only by the full faith and credit of the country issuing the bonds.
Germany is by far the largest economy in Europe. The German government is preparing to step in and put together a package which will not be called a restructuring - which would mean Greece has officially defaulted on its sovereign debt - but will be a voluntary rewriting of the terms of the bonds by the central and private banks that hold the debt.
You know the old saying, borrow $1,000 and the bank owns you; borrow $15 trillion and you own … the world.
A piece in PC Magazine showed the most-common iPhone passcodes are 0000 and 1234 (which account for about 10 percent). The next most popular is 2580 (the middle keys from top to bottom). Numbers four and five in popularity are 1111 and 5555, and the sixth was 5683.
According to the article, on the iPhone keypad, 5683 spells out "LOVE."
On my Blackberry, 5683 spells out "DFXR"
In spite of your annoyance with me for my Bachmann analysis, "I DFXR U."