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Time From S&P Downgrade To El-Erian's Completed, Legally Cleared And Published Op-Ed: 90 Minutes

Tyler Durden's picture


That Mohamed El-Erian  is the most prolific op-ed writer-cum-CEO and co-CIO of a $1.4 trillion fixed fund in history is well-known. There rarely passes a 12 hour period without Mohamed's deep thoughts hitting the tape somewhere. Yet that El-Erian  took a whopping 90 minutes to pen, clear with legal, and publish an oped to the S&P 9:00 am Eastern rating action definitively proves there was absolutely no leakage of this "earth shattering" news to anyone, anywhere.

El-Erian in FT blog Alphaville, as of 10:30 am Eastern:

S&P reaffirmed this morning the AAA
rating of the US but, importantly, slapped a “negative outlook” on the
rating due to concerns on how the country will address its “very large
budget deficits and rising government indebtedness.” In justifying this
dramatic move, it noted that “there is a material risk that US
policymakers might not reach an agreement in how to address medium- and
long-term budgetary challenges by 2013.”

This is a timely reminder of the seriousness of America’s fiscal issues, for the country and for the rest of the world.

The continued failure to come up with a credible medium-term fiscal
reform program would increase borrowing costs for all segments of US
society, thereby undermining investment, employment and growth. It would
also curtail foreigners’ appetite to add to their already substantial
holdings of US assets. And it would weaken the dollar.

The US also risks eroding its standing at the core of the global monetary system.

The world looks to America for a range of “global public goods” —
including the reserve currency, the deepest and most liquid government
debt markets, and the “risk free” standard. With no other country able
and willing to step into this role, the result would be global
efficiency loses and a higher risk of economic and financial

S&P’s warning should be heard loud and clear in Washington DC,
hopefully acting as a catalyst for faster convergence on a credible
medium-term fiscal package. It is also a reminder of risk to the global
economy, as well as the generalized deterioration in the sovereign
credit quality of several advanced economies.

The time has come for the US (and other advanced economies) to take
better control of its fiscal destiny—for the sake of American society
and for the well being of the global economy.


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Mon, 04/18/2011 - 10:48 | 1180366 NOTW777
NOTW777's picture

someone asked why bill had so much cash

Mon, 04/18/2011 - 11:09 | 1180452 Harlequin001
Harlequin001's picture

It was a meeting of a very adept Board , there's no possible way he/they could have known this was coming...

Mon, 04/18/2011 - 11:43 | 1180609 rufusbird
rufusbird's picture

This supports my contention that ratings are determined more by time spent on the telephone than in studying spreadsheets....

Mon, 04/18/2011 - 10:49 | 1180371 uno
uno's picture

let's start another war to keep the masses entertained

Mon, 04/18/2011 - 10:51 | 1180383 SheepDog-One
SheepDog-One's picture

They will soon.

Mon, 04/18/2011 - 10:55 | 1180394 IdioTsincracY
IdioTsincracY's picture

With the money we have left we should be able to attack Nauru.

Mon, 04/18/2011 - 11:10 | 1180469 Harlequin001
Harlequin001's picture

Grenada's got a nice beach, I'm told you can simply walk up that one...

Mon, 04/18/2011 - 17:05 | 1181802 JPG101
JPG101's picture

Please leave Canada alone. It's cold up here. Go for the beaches...

Mon, 04/18/2011 - 20:54 | 1182387 nedwardkelly
nedwardkelly's picture

Yeah Nauru, otherwise known as birdshit island. Actually not so crazy I guess, going to need loads of fertilizer to keep everyone fed.

Mon, 04/18/2011 - 11:03 | 1180435 Long-John-Silver
Long-John-Silver's picture

They've run out of ammo for Libya. No way Obama can start a fourth war without ammunition.


NATO Runs Short of Munitions in Libya: Report

Mon, 04/18/2011 - 11:11 | 1180476 Harlequin001
Harlequin001's picture

Bow's and arrows mate...

cheap as chips.

and if that doesn't work, try a trenching tool...


Mon, 04/18/2011 - 11:30 | 1180554 redpill
redpill's picture

The Fed's out of ammo too.

Mon, 04/18/2011 - 12:30 | 1180789 The Hawk
The Hawk's picture

I think Nato ran out, not the US... meaning US is going to be back in charge using our ammo.  Facking ridiculous.  Probably the plan all along.  "Nato will take over and then 'run out' of ammo, so we can retake control, and the public can't be mad"!

Mon, 04/18/2011 - 10:48 | 1180374 Misean
Misean's picture

Penned it while Turbo Tax finished his return I suspect...

Mon, 04/18/2011 - 11:10 | 1180478 Harlequin001
Harlequin001's picture

yeah, from 1992...

Mon, 04/18/2011 - 10:49 | 1180376 treemagnet
treemagnet's picture

That tool sounds like he's running for office - Senator El-Erian?

Mon, 04/18/2011 - 11:05 | 1180441 LehmanRefugee
LehmanRefugee's picture He is muslim.

Mon, 04/18/2011 - 11:09 | 1180462 treemagnet
treemagnet's picture

didn't seem to stop obama.

Mon, 04/18/2011 - 11:33 | 1180556 UninterestedObserver
UninterestedObserver's picture


Mon, 04/18/2011 - 10:50 | 1180379 boeing747
boeing747's picture

Pull It! Pull It!
No surprise for ZHers.

Mon, 04/18/2011 - 10:52 | 1180380 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

El Erian ain't hiding the fact that he has the PWG (the real abbreviation for the President's Working Group on Financial Markets) on speed dial.

Mon, 04/18/2011 - 10:53 | 1180384 tellsometruth
tellsometruth's picture


Mon, 04/18/2011 - 11:21 | 1180490 Harlequin001
Harlequin001's picture

OK, drum roll please,

Bought my son an iPad, my daughter an iPod, the wife got me an iPhone and I got her an iRon.

She wasn't overjoyed even after I explained that it integrates well with the iWash, iCook, iClean network which opened up the iNag reminder service and totally wiped out the iShag function.


Mon, 04/18/2011 - 12:12 | 1180721 Jreb
Jreb's picture


Mon, 04/18/2011 - 14:16 | 1181192 spekulatn
spekulatn's picture

OK, drum roll please,

Bought my son an iPad, my daughter an iPod, the wife got me an iPhone and I got her an iRon.

She wasn't overjoyed even after I explained that it integrates well with the iWash, iCook, iClean network which opened up the iNag reminder service and totally wiped out the iShag function.



Well done, Harlequin001!

Mon, 04/18/2011 - 10:54 | 1180385 DutchTreat
DutchTreat's picture


Time From S&P Downgrade Completed, Legally Cleared by El-Erian And Published  90 Minutes


Mon, 04/18/2011 - 11:18 | 1180496 Harlequin001
Harlequin001's picture

well I believe he had to go out and get himself a Starbucks as well, hence the delay...

Mon, 04/18/2011 - 10:52 | 1180387 Lilguy
Lilguy's picture

He probably had to dust this puppy off after pulling it out of his desk drawer and before sending it to legal he wrote it so long ago.  (Well, he may have had to update the lead sentence a bit before sending it on.) 

Then he just had to sit and wait until the idiot rating agencies actually did something useful....

Mon, 04/18/2011 - 10:55 | 1180392 SilverIsKing
SilverIsKing's picture

Not that we didn't already know he's on the inside but it's nice to have such clear confirmation.  This way, we'll have 100% assuredness that anything he says in the future is to the benefit of PTB and not us so we can play it that way.  Much like Tungstenman's calls on PMs, currencies, oil, and the equities markets.

Mon, 04/18/2011 - 10:54 | 1180395 SheepDog-One
SheepDog-One's picture

'The world looks to america for a cornicopius range of public goods, everything from worthless printed up rice paper FRN Fiatsco notes, to worthless printed up rice paper FRN Fiatsco notes'!

El Erian, bitchez.

Mon, 04/18/2011 - 10:53 | 1180396 Sophist Economicus
Sophist Economicus's picture

I hope he didn't stay up all night writing such an insightful message

Mon, 04/18/2011 - 11:20 | 1180505 Harlequin001
Harlequin001's picture

Bernanke wrote it...

Mon, 04/18/2011 - 10:54 | 1180400 geminiRX
geminiRX's picture

I find it pretty cool that gold is catching some pretty big buying action on a day when everyone is selling everything. It is so unlike days past when people sold gold on market selloffs like this. There is going to be some enormous upside action soon I reckon. If not now.....then likely around June 13-14th (Armstrong hasn't steered me wrong yet)

Mon, 04/18/2011 - 10:57 | 1180402 Bam_Man
Bam_Man's picture

He had it written over a month ago after he overheard a little birdie whispering something in Bill Gross's ear.

Mon, 04/18/2011 - 10:55 | 1180404 Hansel
Hansel's picture

He didn't mention that PIMCO isn't going to sit in treasuries while the politicians sort it out.  He probably just forgot to add that.

Mon, 04/18/2011 - 10:57 | 1180419 monmick
monmick's picture

It's like the Liz Taylor Obits, what had long been expected had been written (and was in the can) a long time ago...

Mon, 04/18/2011 - 10:58 | 1180420 oogs66
oogs66's picture

I'm sure the agencies called pimco when they cut their holdings. Pimco told the agencies what to do. No surprises

Mon, 04/18/2011 - 11:01 | 1180424 johngaltfla
johngaltfla's picture

All you need to know about the "credibility" of the RINOcrat plan passed last week as Paul Ryan is as progressive as they get:

Congressman Paul Ryan’s Big Lie
Mon, 04/18/2011 - 11:02 | 1180430 ISEEIT
ISEEIT's picture

Am I an idiot for seeing this entire show as a method of convincing the 'teabaggers' to give up and allow the band to march on?

obamma didn't get crowned president for nothing and the propaganda campaign against any and all reasonable dissent to the globalist agenda has been fierce.

Something much larger is in the cards.

The $$ is beating the shit out of more solid currencies right now and the 'retail' crowd is having a field day (two weeks long). W.T.F?

Mon, 04/18/2011 - 11:06 | 1180451 treemagnet
treemagnet's picture

dollar is the incumbent so it wins by default as reserve currency (for now).

Mon, 04/18/2011 - 11:06 | 1180445 carbonmutant
carbonmutant's picture

The fact that CNBC is a mouthpiece of this administration should give some clue about how the WH feels about all of this... 

Mon, 04/18/2011 - 11:06 | 1180446 gordengeko
gordengeko's picture

"for the sake of American society and for the well being of the global economy."

Now that is some funny shit!  Although it will suck for my fellow humans when the shit hits the fan soon.

Mon, 04/18/2011 - 11:51 | 1180657 Don Birnam
Don Birnam's picture

Perhaps El-Arian is sub-letting a piece of W's 99,000-acre refuge ranch in Paraguay.

"Rent payable in gold, M'ham-ed."

Mon, 04/18/2011 - 11:04 | 1180447 the grateful un...
the grateful unemployed's picture

too bad we didn't take control when Paulson was threatening us with martial law. now trillions later we have to give up our cops, school teachers and firemen. so they can keep their bonuses. if the tea party platform wasn't a shill for the plutocrats, they would demand these guys heads on a platter.

Mon, 04/18/2011 - 12:17 | 1180738 Things that go bump
Things that go bump's picture

I think we will do quite well with fewer cops, thank you very much.  You can hardly move without tripping over one.  Don't forget that they put the police in police state and their numbers have dangerously exploded in the last 10 years or so.  Really, within a couple of miles from where I live we have four police departments and the Highway Patrol.  They are becoming increasingly hostile and confrontational.  I believe the profession is a magnet for people of a certain unfortunate character type and the shear number of them around is getting to be really quite frightening.  There is almost no violent crime around here, and never has been.  It is working class and nobody is very rich or very poor so we have kids shoplifting and bar fights on Friday night.  Just yesterday, within a couple of blocks from my house, I drove past a car they had pulled over, and there were two cop cars with their lights flashing pulled up behind it.  I have noticed this often.  It looked like a routine traffic stop to me, and I can only conclude that there are an excessive number of cops on duty at any one time and they don't have enough to do.  I question their numbers and how they are being paid and for what purpose.  

Mon, 04/18/2011 - 12:23 | 1180764 Zardinuk
Zardinuk's picture

Not a big fan of cops here, but I ought to point out to you that your violent crime rate is going to skyrocket when the cops move out of your area, especially if they go from having a job to food stamps, the cops themselves will make some of the worst violent criminals you've ever seen.

Mon, 04/18/2011 - 12:37 | 1180820 trav7777
trav7777's picture

no; your violent crime rate will depend upon the concentration of a certain demographic in the area.  At least that's been the rule for the past half dozen decades

Mon, 04/18/2011 - 14:20 | 1181206 Ricky Bobby
Ricky Bobby's picture


Mon, 04/18/2011 - 11:05 | 1180449 web bot
web bot's picture

This should be considered progress...

Mon, 04/18/2011 - 11:07 | 1180459 Rainman
Rainman's picture

Being naturally suspicious, I see central planning's fingerprints all over the S&P ratings news. What better way to disarm the Tea Party disciples who may thwart the effort to raise Uncle Sugar's debt extravaganza....?? 

Mon, 04/18/2011 - 11:35 | 1180582 UninterestedObserver
UninterestedObserver's picture

Well if a few people from S&P have "accidents" or sudden health problems that result in untimely deaths then we will know if this was or wasn't planned....

Mon, 04/18/2011 - 11:09 | 1180464 magpie
magpie's picture

And i wonder under what circumstances the Bernankputs would expire worthless...

Mon, 04/18/2011 - 11:22 | 1180509 williambanzai7
williambanzai7's picture

I think he is using the iYap App

Mon, 04/18/2011 - 11:31 | 1180560 mspgrandi
mspgrandi's picture

Having read a few books about the crisis .. adn knowing how the system works, it s certainly no a usrprise that this type of information are shared amongst the top brass before are released to the public.

i think inside trading regulations ban you from trading on those information.. not actually getting to know them

Mon, 04/18/2011 - 11:38 | 1180590 UninterestedObserver
UninterestedObserver's picture

LOL sure that doesn't quite explain Goldman's track record for their trading desk.

Mon, 04/18/2011 - 11:35 | 1180586 cougar_w
cougar_w's picture

Look. It's celebrity like obituaries. You write them in advance of the event, and when the day comes you polish them off, update a few things, and hit "send".

We've all been thinking it was coming. The professionals prepare for the day, that's all.

Mon, 04/18/2011 - 11:37 | 1180593 r101958
r101958's picture

The other goal of the downgrade is to frighten the gov't into raising the debt ceiling so the TBTF's can continue to roll in money. A many faceted goal(s) oriented announcement S&P's downgrade was.

Mon, 04/18/2011 - 11:46 | 1180637 the grateful un...
the grateful unemployed's picture

surprised there isn't something about tanks in our streets (well there is a comment about continuing to put tanks in "their" streets. 

Mon, 04/18/2011 - 11:38 | 1180599 max2205
max2205's picture

I beg to differ, Friday saw a ramp trap and most issues with vol stuck to near strikes fucking put buyers yet again....

Mon, 04/18/2011 - 11:42 | 1180606 max2205
max2205's picture

This Rate comment smells of Ben pushing the idots in wash drinking out of their lead cups

Mon, 04/18/2011 - 11:43 | 1180608 r101958
r101958's picture

What do you want to be that the Dow ends up only 30 or 40 down today?

Mon, 04/18/2011 - 11:49 | 1180653 gordengeko
gordengeko's picture

I'll take that

Mon, 04/18/2011 - 11:52 | 1180652 AldoHux_IV
AldoHux_IV's picture

The global economy is broken-- it's no longer an economy, but rather a mechanism designed now to steal wealth from the masses and transfer it to the top 2%.  Destroy the debt, end the fed, reform the treasury, stop funding the IMF/Worldbank, replace the idiot leaders, and throw some motherfuckers in jail for their crimes against humanity.

Mon, 04/18/2011 - 12:20 | 1180744 zaknick
zaknick's picture

Ha! These cocksucking banksters have run western civ for centuries. I'd say you're ducked and prepare for nukular false flag soon!!

Mon, 04/18/2011 - 12:28 | 1180779 SheepDog-One
SheepDog-One's picture

Yep something like that up next no doubt.

Mon, 04/18/2011 - 12:36 | 1180815 proLiberty
proLiberty's picture


The global economy is not “broken”. It is working just fine. It is not a mechanism to seal from everyone to transfer to the top 2%, it is a monetary, financial and legal environment run by governments to maximize the amount of wealth and power they can extract from their citizens.


It is not Bill Gates or Warren Buffet who are attempting to steal your wealth, for they don't own the money printing operation of the Federal Reserve Corporation. Nor do they have more than a little input to the tax laws that Congress passes and are signed by the President.


If anyone thinks this is just to transfer to the “top 2%”, seem to ignore that at the very top of this “top 2%” sits the Master Parasite, government itself.


Haven't you read Alan Greenspan's essay Gold and Economic Freedom? [1] The last two paragraphs summarize it very well:


"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.


"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."


The scheme of fiat money coupled with a tax on income is the grandest scheme of theft in all of human history. The only thing like it in private business is the Microsoft Tax on Windoze PCs, but the inflate, tax and borrow scheme makes Gate's revenue stream look like a faucet dripping compared to the river of wealth government steals from us by taxing, inflating, diluting and borrowing.





Mon, 04/18/2011 - 12:41 | 1180827 trav7777
trav7777's picture

well, now that the sovereign indebted itself to its eyeballs to save the banks, now the banks want paid back.

What a fucking con...make good on the banks' bad debts by borrowing from banks (that were themselves totally bankrupt), liquify the banks and now the banks come asking for their money.

We need to straight up eliminate the entire banking system.

Mon, 04/18/2011 - 13:05 | 1180928 ivars
ivars's picture

Hear the next president of the USA as current parties will continue to do nothing about the debt-which will lead to the USA debt crash correction in 2013-2014:


Treasury bubble is about to bust. That should mean no QE3.

Mon, 04/18/2011 - 13:07 | 1180938 JR
JR's picture

“The continued failure to come up with a credible medium-term fiscal reform program would increase borrowing costs for all segments of US society, thereby undermining investment, employment and growth... It is also a reminder of risk to the global economy…” – El-Erian

Investment, employment and growth!!  What about morality, standards of justice, sound money, and the future of the middle class?  We are in crisis because the priority of the ruling class is the welfare of the ruling class. Period! 

It’s time to unplug these connected rulers from their positions of power.   

We did not form a country so investors could have employment and growth.  We formed a country in pursuit of life, liberty, happiness and property, i.e., to protect the individual's rights in his pursuit of free enterprise.  This government was established to protect these sovereign shores and to protect our people in pursuit of their American Dream; it was not formed to protect employment and growth for multinationals.

I didn’t hear Patrick Henry say we need to protect investments.  El-Erian and the oligarchs have their cart before the nation’s horse. The people who want borrowing costs at zero are the people with their grimy fingers around the levers of powers, who control Washington DC, as the nation self destructs and falls around them

Mon, 04/18/2011 - 13:07 | 1180942 slewie the pi-rat
slewie the pi-rat's picture

el-erian is the tom friedman of economics

so middle-of-the-road you hear elevator music

Mon, 04/18/2011 - 13:23 | 1180989 Forgiven
Forgiven's picture

None Dare Call it a Conspiracy - as appropriate today as the day it was penned.

Mon, 04/18/2011 - 13:41 | 1181066 jmc8888
jmc8888's picture

It's not american society, it's bankster soceity he is talking about saving. I think this picture of 'the boys downtown' is an appropriate response.

Screw 'em!

(Airplane 2)

Mon, 04/18/2011 - 13:48 | 1181089 Grand Supercycle
Grand Supercycle's picture

'COPPER has ignored the recent equity bounce. Daily and weekly are not bullish' ~ March 31, 2011.

'When the sell off does occur, it won’t be pretty. As mentioned earlier, this market behaviour is similar to 2007 / 2008' ~ April 6, 2011.

'DOW/S&P500 is tracking sideways once again suggesting that short covering rally has lost momentum' ~ April 7, 2011.

Mon, 04/18/2011 - 14:50 | 1181233 gkm
gkm's picture

And the fact that there was clear distribution going on Friday indicates that it may have been known to some unknowers sooner than others among the unknowing.

Mon, 04/18/2011 - 15:02 | 1181380 Eireann go Brach
Eireann go Brach's picture

El Arian looks like a fucking gorilla

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