The United States government is financing its more than trillion-dollar-a-year borrowing with IOUs on terms that seem too good to be true. However Treasury officials now face three headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

George Soros has made a statement that “bloodletting” may be in the offing for leveraged buyout firms (LBOs) and commercial real estate investors amid the worst economy in seven decades. He also says that in commercial real estate and leveraged buyouts, the bloodletting is yet to come.