jakke

AAA-rated government bonds are used to back basically all futures contracts, to provide ubersafe assets to big banks and pension funds, to stabilize currency fluctuations, and to serve as totally-safe better-than-cash assets in a whole wide variety of situations. If a government loses its AAA rating, its bonds can’t be used like this anymore, because big institutional investors no longer regard them as 100% safe. 

So AAA debt is a really valuable renewable resource to global financial markets. And a big orange wedge on that chart above is currently risking downgrade. If the US Treasury is downgraded, anything that’s backed with US Treasury bonds suddenly becomes a little more risky and a little less valuable, all at once. Through the magic of leveraging, that corresponds to trillions of dollars of outstanding transactions, which would stand to lose billions of dollars in value. And there’s no good substitute to use in the meantime, because there aren’t that many AAA-rated governments and many of them are small countries (like Denmark or Luxembourg) with relatively little outstanding debt.

Hopefully this explains why a potential US downgrade could cause some really serious issues for global markets. 

Just wanted to point out that the French Socialists who are desperate to bring Strauss-Kahn back are entirely wasting their time, since Hollande and Aubry (two high-profile French Socialist politicians who are more in line with the party’s priorities and have not been charged with sexual assault) would do just fine against Sarkozy anyway. And they’d both be almost certain to make it to the second round of voting. Basically, the only way that (noted bigot) Le Pen would make it through to the second round would be if (previous losing Socialist candidate) Royal was the nominee.

A note on the French electoral system: the presidential election goes in two rounds, where a whole broad range of candidates compete in the first round (with several typically winning 10% of the vote or more) and then the top two advance to a second round (and the winner becomes President). Typically there’s one candidate from the UMP and one from the Socialists in the Presidential elections, but once a super uninspiring Socialist candidate came in third place and an unpleasant ethnic nationalist candidate came in second place (and then the UMP candidate trounced the second round like nobody’s business because most people did not want a really virulent racist President). Obviously, Sarkozy (the UMP incumbent) would like to have this happen again, and the Socialists are super afraid of it.

Oh, and judging by these 3D pie chart graphics, the polling firm LH2 may be hiring a graphic designer in the near future, so if you have Photoshop skills and can speak French you should probably look into that.

(Source: lh2.fr)

The data above was collected from the last 100 individuals to sign onto Manhunt in Vancouver; it omits anyone who didn’t report a position.

Look at that fucking symmetry - that is actually pretty impressive, and suggests that some guys might be basing their reported position on supply/demand considerations.