The Financial Landscape: Gas Is Falling; the Euro's Failing; U.S. Bondholders, Start Bailing

The financial landscapePain at the Pump Keeps Receding: The average price of a gallon of gas declined 11.22 cents during the two-week period that ended Friday and now stands at $3.63. "The rate of decline was reduced in the latest two weeks," according to Trilby Lundberg of the Lundberg Survey, "but we have yet to see the impact of the government sale of crude." Oil prices have fallen markedly since the International Energy Agency announced its intention to release 60 million barrels of oil from reserves over the next month, but the trend in gas prices has been downward since early May, and Obama administration officials pointedly declined to speculate about the impact on gas prices on Thursday, when the IEA announcement was made.

Soros Sees a Euro Exit Coming:
George Soros, the billionaire investor who got even richer betting against the British pound, predicts it is now "probably inevitable" that a country will leave the euro -- a development for which no enabling mechanism currently exists. Challenging the view of Europe's crisis as a sovereign debt issue, Soros explained, "I think most of us actually agree that [it] is actually centered around the euro. It's a kind of financial crisis that is really developing.... The authorities are actually engaged in buying time. And yet time is working against them."

"We are on the verge of an economic collapse which starts, let's say, in Greece, but it could easily spread," Soros added. "The financial system remains extremely vulnerable."

Keeping his criticism constructive, Soros encouraged the development of a "plan B" to save the European Union, the preservation of which he called "a vital interest to all." But judging from the tenor of his comments, who wants to bet that Soros -- one of those storied investors whose pronouncements have the potential to move markets -- has recently taken some heavily anti-euro positions?

Bad Times Ahead for Bondholders?: Citing a research arm of McGraw Hill, the parent of Standard & Poor's, the Financial Times reports that U.S. government bond investors could lose up to $100 billion if the country's debt loses its AAA rating. The study's concern is not the debt ceiling, which it assumes will be raised, but rather "the long term fiscal outlook," which Congress appears poorly poised to address. Such a downgrade, which would cause higher yield and lower prices, could also mean the Treasury -- and thus, the taxpayers -- paying $2.3 billion to $3.75 billion a year more in interest on a $1 trillion annual budget deficit.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

65 Comments

Filter by:
shhappens

either way, bush created the mess, then once he left and another president comes in.and to many have to end up find a scape goat for it.
Who? ltea baggers are one, Scape goats.
but just think if the reserve runs out within 10year we are out of oil. then what we going to do?

June 28 2011 at 7:59 AM Report abuse -3 rate up rate down Reply
Redding Holbert

Hello my fellow Americans, i welcome you to a brave new world.
The US banking system is owned by foriegn banks. The Federal Reserve is owned by the Bank of England.
Europe is broke and so are we.
Now comes the Great Great Depression.

June 28 2011 at 2:16 AM Report abuse +4 rate up rate down Reply
tonyvg44

Let us thank our politicians for being able to be bought out by the large corporations.. PERIOD!!!!!!

June 27 2011 at 10:39 PM Report abuse +5 rate up rate down Reply
mac2jr

Europe and the other countries of the world need to 'devorce' from the USA and our Wall Street bankers, we are the ones that sank their banking and countries, not them. We caused the world wide problems and then failed to take the responsibility for what we did, therefore if they were smart they would stop using the USA dollar and pull out all their money and properties.

June 27 2011 at 10:32 PM Report abuse +1 rate up rate down Reply
1 reply to mac2jr's comment
rlharbi

should learn to spell before analyzing complicated issues

June 27 2011 at 10:47 PM Report abuse +1 rate up rate down Reply
mac2jr

We owe China about $1.4 trillion dollars, the amount that they risk in investing in the USA. We therefore, have a few choices, we can default and screw them out of the total amount, which will come back to us in spades. We can consider that they made an investment, a bad one, and give them 10 cents on the dollar as has been done by Wall Street to the American Public many times. We can pay then back their money without interest, which will not make them happy, but then again. We can pay the entire balance of principle and interest and stop borrowing in the future.

June 27 2011 at 10:29 PM Report abuse +1 rate up rate down Reply
mac2jr

Gas prices have to rise to about $10 per gallon to get the USA off of gasoline and lower the price of it. Why, it is simple. the oil companies will not explore their already leased and claimed lands due to not being able to make a profit after making the investment that it takes to remove the oil from deep waters, frigid waters, and oil and tar sands. The profit has to be high enough to pay their expenses and be able to maintain the fields and pipelines. Now, in Alaska they have a small problem, the pipelines are half-full and the permafrost is melting, which means the pipelines are failing, two companies have already closed down. As for the USA getting off oil, the cost needs to be painful for the country to 'finally' decide that Presidents Jimmy Carter, Bill Clinton, and Obama were right and we needed to invest in alternative energy in a big way.....

June 27 2011 at 10:24 PM Report abuse -7 rate up rate down Reply
1 reply to mac2jr's comment
rlharbi

Would you please provide us with your $10 gas analysis. I'm most interested in the full numbers to support such an outlandish statement. How does raising prices force prices down? Are you suggesting that supply and demand will somehow neatly balance to a lower level? As well, I have not been able to find anything to support your claims of half full pipelines and a oil transportation/delivery problems. Quack!!!!!!!!!!

June 27 2011 at 10:52 PM Report abuse +2 rate up rate down Reply
1 reply to rlharbi's comment
oildad

Yeah Mac, dazzle us with your detailed explanation..........LOL

June 28 2011 at 5:44 AM Report abuse +2 rate up rate down
MARK

believe on the LORD JESUS CHRIST and thou shall be saved.......JESUS is coming soon ..... put your trust and faith in JESUS .....he paid the price for all sins.....if you believe this you will be saved..... GODS word is truth.....ask GOD TO SAVE YOU....HE WILL....HE HAS PROMISED IF YOU TRUELY BELIEVE....

June 27 2011 at 9:57 PM Report abuse -1 rate up rate down Reply
1 reply to MARK's comment
gospelb

Amen

June 28 2011 at 5:13 AM Report abuse -2 rate up rate down Reply
David

If you people will pick up and read the book by William Cooper " Behold a Pale Horse" than you will know that One World Government is just around the corner.

June 27 2011 at 9:56 PM Report abuse +2 rate up rate down Reply
1 reply to David's comment
wlouche

Yes, I read some where Obama wants NATO to run The World. When goverments turns us into andriots, maybe, otherwise, never will happen, religious differences.

June 28 2011 at 1:50 AM Report abuse -1 rate up rate down Reply
1 reply to wlouche's comment
Glenn

NATO can't even fight a small conflict..........let alone run the world. NATO was never been anything and will never be anything except a tool for the U.S. And, I mean that......positively, not negatively. If NATO runs the world.......then.......the U.S. is running the world.

June 28 2011 at 3:35 AM Report abuse -1 rate up rate down
Medic538

He's got our government in his pocket. We The People are being screwed by the Congress, Senate, President and the biggest scam, OUR LEGAL SYSTEM. Don't forget all the State Legislatures. Like in Delaware where they legally double dip. Meaning they hold office + are able to work a State job. You know that when they apply for a State job; whose going to get hired, Joe or Jane Smith or Mr/Ms. Representative or State Senator. Corruption is rampant in DE.

June 27 2011 at 9:03 PM Report abuse +4 rate up rate down Reply
likes2kayak

God Bless America for we are all doomed!

June 27 2011 at 9:00 PM Report abuse +3 rate up rate down Reply