The Animated S&P Downgrade Warning

Tyler Durden's picture

For anyone who is still confused by what the S&P warning of a debt downgrade means, here comes the NMA TV signature animation explanation which cuts right to the chase. And as some may be out of Aderall to comprehend even this 1 minute cartoon version, we are confident that the bears will show up and put the topic to rest. And if that fails, there are always sock puppets and claymation dollar bill printers missing an OFF switch.

h/t HedgedIn

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
X. Kurt OSis's picture

Give it up folks. Soma production is at an all time high. Sheep don't care about NRSRO's (and would be briefly baffled by the acronym until their eyes glaze over). Unless this relates to Nielsen ratings, they don't care.

Edit: now if American Idol lost its gold plated Nielsen rating, it would be MASS FUCKING HYSTERIA.

velobabe's picture

banzai doing, i am sure of it†

X. Kurt OSis's picture

That would be some really good ironing.

America downgraded by S&P = 'I don't get it'

American Idol downgraded by Nielsen = 'OMG!!!!! WTF???? No way. This isn't happening... I think I'm gonna be sick...'

I don't know about the rest of you, but I'm am amusing the shit out of myself with this juxtapostion.

jeff montanye's picture

don't mean to cut in but did anyone notice the way the s&p 500 200 day weekly cut the 50?

gordengeko's picture

Those funny malaysians.

Bill D. Cat's picture

You know you're fucked when these guys get involved .

traderjoe's picture

Why does a sovereign country borrow its own money - at interest - from private corporations?

BobPaulson's picture

Cause it's not sovereign and they're borrowing from their rulers they didn't vote for.


Clampit's picture

Why is sovereignty the birthright of countries?

Holodomor2012's picture

Better question: Why do Marxist posters at ZH select Seasame Street avatars?  The cultural marxism slant I guess. 

Clampit's picture

It's almost Sesame Street, much like I'm almost a Marxist. Aren't labels fun?

Smiley's picture

Because it's citizens are stupid.

hamurobby's picture

Why does a sovereign country borrow its own money - at interest - from private corporations?


Because the private corporation known as the Federal reserve bank is, and has been, managing the BANKRUPTCY of the US government since 1913.

writingsonthewall's picture

...and what caused that bankruptcy?


A crisis of capitalism.

Attitude_Check's picture

The crisis was the capitalists being devoured by the financialists, with labor just an after dinner mint.

Drag Racer's picture

Skynet now will be implemented on April 19, 2011 and will begin its attack against humanity on April 21.

Terminator: The Sarah Connor Chronicles

Korrath's picture

I, for one, welcome our new machine overlords.

Honestly, can anyone tell me with a straight face that they could do a worse job then our current crop of ass-clowns, both the Washington and Wall street variety?

Hephasteus's picture

Here's their heirarchy of needs. It's exactly like the humans.

JR's picture

Remember S&P had investment grade, AAA, ratings on countless mortgage-backed securities right up until the moment the paper became worthless. -- Peter Schiff on the S&P’s “too late semi-downgrade of U.S. sovereign debt.”

In the first place, the S&P announcement only portrays a one in three chance that the U.S. would lose its AAA rating, reserving an opportunity later to move down to a one in two chance.  With this weak pronouncement, S&P still gives the politicos unbelievable latitude on whether they are “willing” to meet the challenge. And I particularly like the negative shift Peter Schiff supplies to the whole process. Excerpts:

Late to the Party…Once Again |

…[B]y shifting to a negative outlook, S&P will try to have its cake and eat it too. In the unlikely event that Congress does act responsibly to restore fiscal prudence, its AAA would be validated. If on the other hand, out of control deficits lead to outright default or hyperinflation, it will hang its hat on the timely warning of its negative outlook. This is like a stock analyst putting a strong buy on a stock, but qualifying the rating as being speculative.

The bottom line is that the AAA rating on U.S. sovereign debt is pure politics. S&P simply does not have the integrity to honestly rate U.S. debt. It has too cozy a relationship with the U.S. government and Wall Street to threaten the status quo. In fact, given the culpability of the rating agencies in the financial crisis, it may well be a quid pro quo that as long as the U.S.' AAA rating is maintained, the rating agencies will continue to enjoy their government sanctioned monopolies, and that no criminal or civil charges will be filed related to inappropriately rated mortgage-backed securities.

Remember S&P had investment grade, AAA, ratings on countless mortgage-backed securities right up until the moment the paper became worthless. Amazingly, the rating agencies somehow maintained their status, and their ability to move markets, after the dust settled.

Currently, they are making the same mistake with U.S. Treasuries. Once it becomes obvious to everyone that the U.S. will either default on its debt or inflate its obligations away, S&P might downgrade treasuries to AA+. Such a move will be of little comfort to those investors left holding the bag.

In its analysis of U.S. solvency, S&P typically factors in the government's ability to print its way out of any fiscal jam. As a result, it applies a very different set of criteria in its analysis of investment risk than it would for a private company, or even a government whose currency has no reserve status. But the agency completely fails to consider how reckless printing will impact the value of the dollar itself. It can assure investors that they will be repaid, but the agency doesn't spare a thought about what if anything our creditors may be able to buy with their dollars.

X. Kurt OSis's picture

There is some pretty good ironing in all of this too.

Sovereign debt and full faith and credit securities get a default rating of AAA or an implied rating with no actual rating issued and no analysis ever done. Yet the yield on those securities form the basis for the discount rates/yields on every other financial asset which they could never properly rate when they were actually reviewing the credit.

I'm pretty sure every stock/bond valuation model would produce one result if the US got downgraded: 'SYNTAX ERROR.'

Markowitz, CAPM... All that shit would get thrown out the window.

JR's picture

Brilliant.  It's now all connected-action, in the end working against us.

booboo's picture

HAHAHA, you funny man President Milkdud, why you try to make sex to me by sending pointy eared gaithner, next you tell me your momma virgin.

Hephasteus's picture

Will you buy me dinna.


Will you buy me dinna?

I like people buy me dinna when they TRYING TO MAKE SEX TO ME!!

steve from virginia's picture


Absolutely hideous animation. Better than those dumb bears w/ the pink trees.

Debt: okay we have it, now what? The entire US is painted into a corner. So far, nobody suggests that the US repay some of it ... this is because the US cannot repay any of it. The US is not a going concern. That is: its spending earns less than not spending.

Hello, S&P! The USA is busted! Rate it down some more why don't you?

Guess what, the world is broke, too! Japan, Europe, Brazil, speculators' darling China ... all broke in their own unhappy way to paraphrase Tolstoy. Who cares what S&P sez, they have their heads in the sand. They believe in the myth: they want the current regime to be 'fixed' (by getting rid of the Kenyan and replacing him with a 'bidnessman' like Gingrich.)

The entire establishment has gone completely bonkers, batshit insane ...

Borrowing and spending digs a deeper debt hole: not spending interrupts the all important cash flows. Cash flow versus debt loads is the glowing bit of plutonium @ the center of the US (world's) 'moderne' economy.

It's what happens when you eat your capital for breakfast. Or take your capital, put in the tank of your car and drive around in circles so that after a period of time (60+ years) you have abolutely nothing to show for it but massive debts, (and no capital.)

Okay, we go cold turkey (turdey?) on the debts! What next? A cataclysmic financial collapse that (frankly) doesn't ever end! Who wants that?

Don't go cold turdey on the debt and what happens? Ultimately, the output return on new debt falls to zero and you have a cataclysmic finance collapse, etc. etc. etc. We have more or less reached the end of the gangplank folks, with nowhere to go.

No Bernanke, no 'gifts to banks' no money 'printing' and you have unstoppable deflation and cascading defaults @ all levels. The fabulous myth that 'honest money', 'No Fed', 'gold standard', an Ayn Rand- style capitalism, an Austrian- style capitalism or a doggy- style capitalism/whatever will somehow 'reform' industrialization when it has both invented and discarded all these approaches. Industrialization cannot be reformed or fixed, this is nonsense.

Industrialization destroys capital that is its nature.

We play out the debt string until the end and take our deflationary medicine as one sector of the economy after the other defaults (and demand for petroleum is destroyed which is what this particular story is all about.)

Our economy of consumption, malls, office buildings, suburbs, freeways, benefits, stock markets, 24 hour electricity, central heating, McMansions, SUVs, giant pickup trucks and endless electronic diversions runs on oil not money. Unlike the money, the oil is running out. We are paying for this right now, we will pay much more tomorrow. If you are lucky your children will not murder you in your beds.

Keep in mind one more thing, folks: money (gold, paper, electronic, cigarettes, silver coins, etc.) are fetish objects of the industrial state. What is taking place is forced de- industrialization on a worldwide scale. Money -- in the sense of a carrier of 'wealth' -- ain't.

Have a nice day.

tom a taxpayer's picture

Steve - I always enjoy your insights. Oil is the foundation for modern life. There is nothing that can replace this foundation within a reasonable time period.

Modern food production and distribution to feed billions of people requires oil for the foreseeable future. 

Zero Govt's picture

Steve Virgin

you're taking this topic far too seriously. The public debt was run up by politicians, not you, and without your explicit agreement (most poles show the majority of Yanks have been expressly against such vast public debts). So politicians are not spending with a public mandate so they have to repay it, not you

Now stick to that line and lighten up while you watch them burn in hell 

JR's picture

Yours is the argument of peak oil.  This argument is mistaken.  There will be substitutes for oil in the future AND, frankly, the world doesn’t have to use this much oil.  You can’t decide man’s future on a single factor.  That’s like saying 100 years ago that we’re going to need so many more horses we won’t be able to feed them.

For one thing, nuclear power could probably take care of most of the current need for oil by the generation of electricity.

It’s the Fed financiers, not oil as a resource, that’s causing the current global contraction, even to the starvation that is triggering revolution in the Middle East.

“Sixty to seventy percent of the oil contracts in the futures markets are not held by companies that need oil, not by the airlines, not by the oil companies,” says Dan Gilligan, president of the Petroleum Marketers Assn. (representing 8000 retail and wholesale suppliers), “but they’re held by investors who profit from their speculative positions.”

Finance expert Phil Davis (Phil’s Stock World) goes into detail on how speculators and financiers make their profits while oil moves and doesn’t move around the world - money changing hands. He says market manipulation and rigging by a cartel actually has loaded tankers criss-crossing the oceans but only landing when the price is right.  Here was one recent quote from Phil:

“There is nothing that a congo-line of tankers between here and OPEC would like to do more than unload an extra 277 million barrels of crude at $112.79 per barrel  (Friday’s close on open contracts and price) but unfortunately, as I mentioned last week, Cushing, Oklahoma (where oil is stored), is already packed to the gills with oil and can only handle 44M barrels if it started out empty so it is, very simply, physically impossible for those barrels to be delivered.  This did not, however, stop 287M barrels worth of May contracts from trading on Friday and GAINING $2.49 on the day.”

Phil asks: “Who is buying 287,494 contracts (1000 barrels per contract) for May delivery that can’t possibly be delivered for $2.49 more than they were priced the day before?  These are the kinds of questions that you would think regulators would be asking if we had any.”

Source: Al Jazeera News Dissector Danny Schechter (producer of the film “Plunder the Crime of Our Time”)

BigJim's picture

You do a good job describing the debt situation, then you get a sudden rush of blood to the head and start spouting phrases like "Industrialization destroys capital that is its nature."

No. Sorry. We're in this situation because of our monetary system, not because of industrialisation. As for peak oil... will it cause serious problems? Yes. Is it the source of our current financial predicament? No.

And FFS, money is not a 'fetish object' of the industrial state. How can you believe such nonsense? How are people's attitudes to money any different now than they were 250, 500, 1000, 2000 years ago?

Read some history - your clearly excellent brain is running on empty.

foxman's picture

In 1874, the state geologist of the nation's leading oil producer, Pennsylvania, warned the U.S. had enough oil to last just four years.

In 1914, the Federal government said we had a ten-year supply.

The same government announced in 1940 that reserves would be depleted within a decade and a half.

The Club of Rome made similar claims in the 1970s.

President Carter famously predicted in 1977 that unless we made drastic cuts in our oil consumption, "Within ten years we would not be able to import enough oil — from any country, at any acceptable price."

And so it goes today..yet the nuclear earth keeps churnin'

Racer's picture

I found this quote from JPM from a while ago...


euro to trade around
 USD 1.25
until Q2 2011"


Ha ha.... wrong.... wrong.... uh did I say....they were SOS's?

Sokhmate's picture

the one on the left is quite hot.

Long-John-Silver's picture

Only because she speaks English. I like the one on the right because she does not. She can't bitch me out because I would never understand a word of it and I don't need to do any thing she tells me to do for the same reason.

bigdumbnugly's picture

your wife is knocking and screaming at the front door wanting in and your dog is at the back door barking like crazy wanting to get in too.  Which do you let in first?

bigdumbnugly's picture

the dog of course.  he'll shut up once he's in.

Sokhmate's picture

it wouldn't matter if I was deaf.

AldousHuxley's picture

S&P rates AltA liar loans as AAA. Now if those guys are saying something bad, US is really in trouble. Wait, US credit is pretty much all toxic mortgage.

Manzilla's picture

Wait....I thought if an elevator falls like that you would not move much. Didn't Einstein tell us that?

wisefool's picture

Probably newton. save albert for the most powerful force in the universe.  the elevator falling would (at best) be a zero g thing. you gotta get in that russian cargo plane power dive to actually get negative gravity that pushes you up the the roof.

michigan independant's picture


1. official sanction; authoritative permission 2. an arbitrary order or decree 3. Chiefly literary any command, decision, or act of will that brings something about from Latin, literally: let it be done, from fier? to become.
I would concern myself with a good harvest this fall. We have enough fuel hedged for this planting season only in our case. Then all hell breaks loose kids. Please plan accordingly souls. They will allow how much crude on the market as we read for the silly Americans? The production is there hedge to paying customers since I assume they do math in context to balance of trade with paying customers. Wake up kids... 


tom a taxpayer's picture


The downgrade warning is Stainedturd & Poop's Get-Out-Of-Jail-Card insurance for the next two years. The Obama administration had many golden opportunities to prosecute these worthless leeches, but instead choose to give Stainedturd & Poop's nine lives. So now, guess what..these subprime Wall Street bitches have the O administration, the Congress, the taxpayers, and the whole world by the B-A-L-L-S.


Sheriff Douchenik from AZ's picture

I like that video. It's bizarre. Much better to get the message across than a bunch of readin'.