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Egan Jones Downgrades US From AA To AA-

Tyler Durden's picture




 

From Egan Jones, who downgraded the US for the first time ever last July, two weeks ahead of S&P:

Synopsis: UNITED STATES (GOVT OF) EJR Sen Rating(Curr/Prj) AA-/ N/A Rating Analysis - 9/14/12 EJR CP Rating: A1+ Debt: $15.2B EJR's 1 yr. Default Probability: 1.2%

 

Up, up, and away - the FED's QE3 will stoke the stock market and commodity prices, but in our opinion will hurt the US economy and, by extension, credit quality. Issuing additional currency and depressing interest rates via the purchasing of MBS does little to raise the real GDP of the US, but does reduce the value of the dollar (because of the increase in money supply), and in turn increase the cost of commodities (see the recent rise in the prices of energy, gold, and other commodities). The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power. Hence, in our opinion QE3 will be detrimental to credit quality for the US.

 

Some market observers contend that a country issuing debt in its own currency can never default since it can simply print additional currency. However, per Reinhart & Rogoff's " This Time Is Different: Eight Centuries of Financial Folly " , p.111, 70 out of 320 defaults since 1800 have been on domestic (i.e., local currency) public debt. Note, US funding costs are likely to slowly rise as the global economy recovers or the FED scales back its Treas. purchases (75% recently).

 

From 2006 to present, the US's debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%. In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%. We are therefore downgrading the US country rating from "AA" to "AA-".

 

Ratings History:
Egan-Jones rating history for United States (Govt of).
9.14.12  AA to AA (-)
4.15.12  AA+ to AA (Negative outlook) 
7.16.11  AAA to AA+ 

Full report

 

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Fri, 09/14/2012 - 15:24 | 2796528 firstdivision
firstdivision's picture

But...but...we haven't raised taxes on dividends yet.  Not fair EJ!  The economy will be just fine. Please re-evaluate after reading this http://www.marketwatch.com/story/why-defend-dividends-2012-09-14?dist=countdown

Fri, 09/14/2012 - 15:30 | 2796577 LULZBank
LULZBank's picture

LOL

I would'nt give any "credit" to that.

A = Almost boob

B = Barely there

C = Can do

D = Damn!

E = Enormous

F = Fake

Fri, 09/14/2012 - 15:31 | 2796581 boogerbently
boogerbently's picture

E/J, always ahead of the pack.

Fri, 09/14/2012 - 15:33 | 2796592 Divided States ...
Divided States of America's picture

Makes no diff....we are in an asylum where the nutcases (led by Bernanke and Krugman) are running the show while the people who make sense are tied to the electric chair awaiting their fate.

Fri, 09/14/2012 - 15:34 | 2796606 SilverTree
SilverTree's picture

"No risk of that."

 

~Tim G.

Fri, 09/14/2012 - 16:25 | 2796860 Manthong
Manthong's picture

"in our opinion QE3 will be detrimental to credit quality for the US"

How could anyone ever possibly come to that conclusion? After all, it is unlmited. 

Fri, 09/14/2012 - 18:42 | 2797322 franzpick
franzpick's picture

U.S. bond ratings are about as trustworthy as our foreign policies: rate them all "A", for apology.

Fri, 09/14/2012 - 15:36 | 2796615 Turd Ferguson
Turd Ferguson's picture

What a joke this is.

OK, so the buyer is "guaranteed to get their money back". I get that. But at what inflation-adjusted basis?

Would a corporate bond that returns to the buyer just 50% of their principal value at maturity be rated AA-???

Fri, 09/14/2012 - 15:38 | 2796625 redpill
redpill's picture

Turd you're talking about megalomaniacs that deny inflation even exists.

Fri, 09/14/2012 - 16:34 | 2796900 JohnKozac
JohnKozac's picture

Speaking of megalomanics, where is Timmy these days?

Fri, 09/14/2012 - 17:25 | 2797059 lemonobrien
lemonobrien's picture

gett'n ready to bail.

Fri, 09/14/2012 - 17:49 | 2797163 Major Key Tonality
Major Key Tonality's picture

He's running apparently running in triatholons.  

Fri, 09/14/2012 - 15:38 | 2796627 malikai
malikai's picture

Can the corporate print his own money to pay it? If yes, AAA.

I think that's how it works.

Fri, 09/14/2012 - 15:44 | 2796661 Hype Alert
Hype Alert's picture

I'm naming my first wheelbarrow The Egan Jones.

Fri, 09/14/2012 - 16:13 | 2796815 Rahm
Rahm's picture

I gotta run to the bathroom to drop a bernanke.

Fri, 09/14/2012 - 16:49 | 2796956 viahj
viahj's picture

the geithner is the one that drops after the bernanke, it's smaller and not as well formed

Fri, 09/14/2012 - 15:49 | 2796687 r00t61
r00t61's picture

.

 

"Some market observers contend that a country issuing debt in its own currency can never default since it can simply print additional currency."

I like how EJ throws in this dig against the MMT'ers.

Fri, 09/14/2012 - 15:53 | 2796703 NewWorldOrange
NewWorldOrange's picture

B-b-but the Emperor is adorned in solid gold regalia! And WTF Egan? Are you trying to force the Vampire Squid's third tentacle aka the SEC to put the squeeze on you again?

Fri, 09/14/2012 - 16:22 | 2796842 Bay of Pigs
Bay of Pigs's picture

Hey Turd, when are you going to let people like me come back to your blog anyway?

Banning people is a joke. ZH posters paved your way, never forget that. 

 

Fri, 09/14/2012 - 16:20 | 2796839 Zap Powerz
Zap Powerz's picture

Over the past few years, the doom sayers have been pretty might spot on about everything.  Those telling us that everything is fine are consistently wrong.

The experts are always saying things like "unexpected increase in unemployment (for 3 straight years).  The experts are always saying things like "this is the summer of recovery" and "there is no risk of inflation".

The experts (read "fake reality cheerleaders") are wrong and the doom sayers are right.  We would be fools to believe this trend will not continue.

Every horrible thing that has been predicted to happen will happen:

Hyperinflation

Riots

Starvation

Cannibalism

Famine

Disease

Societal collapse.

Have a nice day, enjoy the few good ones we have left.

Fri, 09/14/2012 - 19:49 | 2797527 Daily Bail
Daily Bail's picture

Meet Jon Corzine's Daughter

Corzine's bloodline runs deep.

Fri, 09/14/2012 - 15:34 | 2796608 Ying-Yang
Ying-Yang's picture

EJ did this because they watched Innocence of Muslims

Fri, 09/14/2012 - 15:43 | 2796657 FlyoverCountryS...
FlyoverCountrySchmuck's picture

"EJ did this because they watched Innocence of Muslims"

 

This is OBVIOUSLY a terror attack directed at our media-beloved President! SEND IN THE DRONES!

Fri, 09/14/2012 - 15:49 | 2796692 Dr. Richard Head
Dr. Richard Head's picture

In a related story, Federal Reserve bankers from each of the 12 district banks, along with the SEC, have begun a demonstration at the headquarters of Egan Jones and have begun to burn effigies of rating agencies, along with burning piles of Federal Reserve Notes.  Paul Krugman noted that this should be positive for aggregate demand and should generate a GDP growth that will take the US out of the depression. 

Back to Kelly and our entertainment team to talk about Kate Middelton's nipples. Kelly........

Fri, 09/14/2012 - 16:16 | 2796827 Taterboy
Taterboy's picture

EJ dissed Obamy. Obamy gots to put a cap in EJ.  Plus Obamy's homey, Fittie Cent is now valued at Fortie Cent!

Fri, 09/14/2012 - 15:58 | 2796738 NotApplicable
NotApplicable's picture

I was going to ask rhetorically "Why does Egan Jones hate freedom and America?"

But I see you beat me to it with the answer.

Well played.

Fri, 09/14/2012 - 15:38 | 2796626 azzhatter
azzhatter's picture

Does this mean QE4 on deck?

Fri, 09/14/2012 - 15:54 | 2796720 Hype Alert
Hype Alert's picture

No, they knew sequential numbering would get out of hand, so they just made the last one open-ended.  And to think, we laughed at Zimbabwe.  They are now our model.

Fri, 09/14/2012 - 15:59 | 2796752 you enjoy myself
you enjoy myself's picture

how could it not?  we're now debasing our currency, but doing so to buy MBS (damn, the banks really must be on the verge of collapse) instead of funding our govt.  so we made bonds even less atractive to buyers, but didn't supply the additional uptake that will be needed.  we're so freaking doomed.  the primary dealers aren't going to buy bonds at this yield if they can't flip them right back to the Fed - so the Fed will soon add $40B in unending bond purchases too.

Fri, 09/14/2012 - 16:02 | 2796760 NewWorldOrange
NewWorldOrange's picture

Sorry, azzhatter. You must have missed the news. QE4 has baby arms, so QEternity is pinch-hitting and already at bat. He'll never score a hit, though, and an endless series of fouls is a sure bet.

Fri, 09/14/2012 - 17:10 | 2797021 Zap Powerz
Zap Powerz's picture

QE infinity is already here.  No numbers needed at this point.

I cant wait to pay off my mortgage with a $1,000,000 dollar bill that I earned by working 2 hours.

Of course, I might need that 1M note to buy food for my kids.  Tough decisions ahead.

Fri, 09/14/2012 - 18:05 | 2797211 NewWorldOrange
NewWorldOrange's picture

"I cant wait to pay off my mortgage with a $1,000,000 dollar bill that I earned by working 2 hours."

Ah, but The Bernank is going to implement Operation Gold Twist...you know, so the bankers just get paid off with non-money, and so the Fed can loan real, fiat paper money to the Sheeple, who of course being utter geniuses, will see that gold is worthless shiny crap that should be sold to pawn shops and other buyers springing up everywhere, and that dollars are king. Like the Bernank said, "It's not money if I can't print it."

Once you do pay off that house, be sure to rent it out. With the Fed pumping all that money into housing, it's going to 1) cause housing prices to go higher than they would have and price people out of owning, 2) cause banks to not feel so rushed about selling these assets now sure to be propped up ad infinitum, 3) cause banks to start writing mortgages with principle payments pegged to inflation, and hence 4) force people to have to rent instead of buy.

Owning is for Mr. Landlord, and they're not going to give you a loan! Now be a good little tenant and pay your $500,000,000,000 rent and quit whining about the broken hot water heater. You can't afford to heat it anyway.

Fri, 09/14/2012 - 15:32 | 2796589 FlyoverCountryS...
FlyoverCountrySchmuck's picture

ARE THE SHEEPLE DISTRACTED ENOUGH BY THE MIDDLE EAST ATTACKS TO NOT BE PAYING ATTENTION TO ALL THE ECONOMIC DOOM NEWS??

Obama sure hopes so....

Fri, 09/14/2012 - 15:50 | 2796695 Dr. Richard Head
Dr. Richard Head's picture

Middle East attacks?  Did you see that fucking trick play by the Packers last night?  Holy shit that was awesome. 

Fri, 09/14/2012 - 15:57 | 2796739 Spastica Rex
Spastica Rex's picture

And Brittney Spears is BACK!!! Tits and ass, man TITS AND ASS!!!

Fri, 09/14/2012 - 16:07 | 2796782 LULZBank
LULZBank's picture

That was a conspiracy against Kate...

Fri, 09/14/2012 - 16:09 | 2796793 Dr. Richard Head
Dr. Richard Head's picture

A sexy and obviously cold one at that.  Cold hard cash and cold hard nipples.  Which will the American public spend more time pondering.  My silver is on the latter or half dollar titty grabber.

Fri, 09/14/2012 - 19:39 | 2797497 lakecity55
lakecity55's picture

photo link?

Fri, 09/14/2012 - 16:18 | 2796809 NewWorldOrange
NewWorldOrange's picture

"Obama sure hopes so...."

The compliant (with whatever POS is in office) MSM will make sure of that. All these "journalists" need to be on The Lists come the Ides of March (3-15-2012) when Americans take to the streets. We're going to need a lot of rope.

CNN's subtitle below Marc Rubio as he discussed opposition to taypayer funded birth control: "Against Women's Choice on Birth Control" (not "Rubio Opposed to Taxpayer-Funded Birth Control")

CNN's subtitile below Sandra Fluke as she preached to the DNC: "Miss Fluke Supports Access to Birth Control" (not "Fluke Demands Taxpayer- Funded Birth Control", or better yet, the really accurate one, "Loose Slot Demands Payout")

I understand both parties are CRAP. Like I said, the MSM supports whoever is in power (in name), because the REAL POWERS demand it and pay their bills and salaries. THIS is how they brainwash people. It's very hard to avoid. So don't watch TV. No, I haven't, in many years. I'm still wishing I had all those decades back that I did.

Fri, 09/14/2012 - 16:58 | 2796978 mademesmile
mademesmile's picture

Sandra Fluke is an insult to women, a parady of a parady. I attemped to listen to her speach at the convention and shanged the channel 4 times, just to prevent vomiting. Why give her a national speaking platform?  My employer should pay for all the krispy creme dounut I want, and if I get fat, pay for the liposuction too. It's My Body! It's My Choice! You Must Pay!

Sat, 09/15/2012 - 19:31 | 2799456 blunderdog
blunderdog's picture

Seems mademesmile and NewWorldOrange have opinions on this...maybe either or both of you two help me out with this 'cause I still really don't understand the "debate" here.

How do you folks think insurance companies should determine which prescription drugs are covered and which are not?

Fri, 09/14/2012 - 16:55 | 2796970 DosZap
DosZap's picture

ARE THE SHEEPLE DISTRACTED ENOUGH BY THE MIDDLE EAST ATTACKS TO NOT BE PAYING ATTENTION TO ALL THE ECONOMIC DOOM NEWS??

 

And if anyone thinks these attacks were STARTED,on 9-111, over a movie, your IQ is 43.

Pre-Planned event.............Sept 4th, the Gub was warned on it.

Fri, 09/14/2012 - 19:37 | 2797491 lakecity55
lakecity55's picture

....meanwhile, the numerous telephone threats against colleges were traced to a residence on PA Avenue.

Fri, 09/14/2012 - 15:46 | 2796620 LMAOLORI
LMAOLORI's picture

 

 

Ooh Egan Jones is going to be in deep doo doo the obama administration already went after them last time they gave a downgrade they are not Moody's after all

SEC Keeps Ratings Game Rigged

snip more at link

A case the commission filed last week epitomizes a lot of what's wrong with the agency, even under the supposed overhaul by its chairwoman, Mary L. Schapiro.

The agency brought a civil case against a tiny, iconoclastic ratings agency called Egan-Jones, run by the outspoken Sean Egan, accusing it of, well, essentially filling out forms wrong.

Before the S.E.C. charges, Egan-Jones was best known for two things: having made some bold calls about shaky credit prospects and having a business model that was different than that of the big boys — Moody's Investors Service, Standard & Poor's and Fitch. Mr. Egan's outfit gets paid by the users of his ratings; the oligopoly gets paid by the issuers whose debt is going to be rated.

You don't need to be a hedge fund quant to see the conflict of interest: the more ratings, the more profits to the ratings agencies, so the temptation is to be extra lenient. And, boy, were they.

Fri, 09/14/2012 - 15:44 | 2796662 lolmao500
lolmao500's picture

The funniest thing in all of this is the default probability rate... 1.2%?? In what world??? The unicorns one I presume.

Fri, 09/14/2012 - 15:52 | 2796705 Dr. Richard Head
Dr. Richard Head's picture

The same world of aliens that Krugman predicted will cause a world resolute in increasing GDP to defend against broken windows inevitably caused by the aliens.

Fri, 09/14/2012 - 15:25 | 2796531 redpill
redpill's picture

"Hence, in our opinion QE3 will be detrimental to credit quality for the US."

 

Ya don't say!!!

Egan Jones is clearly a domestic terrorist operation.

Fri, 09/14/2012 - 15:31 | 2796582 HelluvaEngineer
HelluvaEngineer's picture

I bet the Silver Bears video set them off.

Fri, 09/14/2012 - 15:34 | 2796609 Sam Clemons
Sam Clemons's picture

Is there a new one?

 

Fri, 09/14/2012 - 15:25 | 2796532 LawsofPhysics
LawsofPhysics's picture

Paging the bond vigilantes, where the fuck are you guys?

Fri, 09/14/2012 - 15:28 | 2796571 MachoMan
MachoMan's picture

Busy squeeling like pigs listening to ben play the banjo

Fri, 09/14/2012 - 16:24 | 2796857 Bay of Pigs
Bay of Pigs's picture

OINK!

The bond vigilantes left years ago...

Fri, 09/14/2012 - 15:30 | 2796576 Schmuck Raker
Schmuck Raker's picture

LOL - Silly LoPhys, bond vigilantes are the "smart money", they don't own US sovereign debt.

Fri, 09/14/2012 - 15:33 | 2796599 malikai
malikai's picture

At some point, "don't fight the fed" will become "get the fuck out of dodge".

Fri, 09/14/2012 - 15:41 | 2796647 Rylie
Rylie's picture

I got that silver coin

Fri, 09/14/2012 - 15:39 | 2796639 Vincent Vega
Vincent Vega's picture

Long bond off 3 points....some vigilanties out there. It will be interesting to see what next week brings.

Fri, 09/14/2012 - 17:00 | 2796981 viahj
viahj's picture

China is weighing it's options on it's USD holdings.

Fri, 09/14/2012 - 16:50 | 2796961 odatruf
odatruf's picture

Ironic that someday we'll be grateful to the bastards for the day they came in to wreck the day and saved it, isn't it?

Fri, 09/14/2012 - 15:25 | 2796533 not fat not stupid
not fat not stupid's picture

My hero.

Fri, 09/14/2012 - 15:26 | 2796539 FischerBlack
FischerBlack's picture

We might get a red close today. That would be weird and stuff.

Fri, 09/14/2012 - 16:23 | 2796801 Threeggg
Threeggg's picture

How can we close red when they have a printing press and a face-cord stacked at every trading console ?

We will never close RED again !

QE4ever !!

Fri, 09/14/2012 - 15:25 | 2796541 fuu
fuu's picture

\EJ/

Fri, 09/14/2012 - 15:25 | 2796544 LULZBank
LULZBank's picture

Downgrade?

Daddy will be so unhappy?

Fri, 09/14/2012 - 15:40 | 2796645 giovanni_f
giovanni_f's picture

Daddy will punish them

Fri, 09/14/2012 - 15:54 | 2796725 LMAOLORI
Fri, 09/14/2012 - 15:28 | 2796545 Vincent Vega
Vincent Vega's picture

Sean is gonna keep fucking around with these ratings and accidentally shoot himself in the back of the head 3 or 4 times.

Fri, 09/14/2012 - 15:56 | 2796733 LMAOLORI
LMAOLORI's picture

 

 

OMG good one some of you really crack me up that's why I use ROFLMAO

Fri, 09/14/2012 - 16:09 | 2796796 Tijuana Donkey Show
Tijuana Donkey Show's picture

Heart attack! He didn't believe in Obamacare, and looked what happened, BAM, heart attack. 

Fri, 09/14/2012 - 15:26 | 2796547 Aquiloaster
Aquiloaster's picture

Inflation everywhere--including grade inflation.

Fri, 09/14/2012 - 15:26 | 2796549 j0nx
j0nx's picture

Egan who?

Fri, 09/14/2012 - 15:38 | 2796622 LouisDega
LouisDega's picture

Egan Lou Who. Thats Who

Fri, 09/14/2012 - 15:26 | 2796550 Yen Cross
Yen Cross's picture

 Sweet!   ( A SMALL NOT SO - OBSCURE- RATINGS AGENCY) Sets' precedent!

Fri, 09/14/2012 - 15:26 | 2796552 Fecklesslackey
Fecklesslackey's picture

Who cares ... market (SP) +5

Fri, 09/14/2012 - 15:33 | 2796600 HelluvaEngineer
HelluvaEngineer's picture

Don't spoil the coke & underage hookers party in the Hamptons

Fri, 09/14/2012 - 15:42 | 2796653 Fecklesslackey
Fecklesslackey's picture

I didn't know Egan Jones was in that business. But independent hooker rating service might gain some traction

Fri, 09/14/2012 - 15:26 | 2796558 ar01
ar01's picture

Surely the SEC can find more paperwork to file charges against them, right?

Fri, 09/14/2012 - 15:26 | 2796559 dwdollar
dwdollar's picture

Where is Egan Jones located? The Navy needs to send some ships there.

Fri, 09/14/2012 - 20:09 | 2797587 jerry_theking_lawler
jerry_theking_lawler's picture

the Us Navy or Russian....better not ask a democrat....

Fri, 09/14/2012 - 15:27 | 2796560 Banksters
Banksters's picture

The us has infinity money, greenspit said so. Too bad the unfed has the gold.

Fri, 09/14/2012 - 15:28 | 2796568 youngman
youngman's picture

He nails it in one paragraph....

Fri, 09/14/2012 - 15:32 | 2796585 LULZBank
LULZBank's picture

Marc Faber did it in one line...

Fri, 09/14/2012 - 15:44 | 2796665 disabledvet
disabledvet's picture

I do it in one word: "hahahahahaha." what else can I do? "we're all stand up comedians now." oh, look! an idiot paying his bills! did you hear the one about the bank robber? When the teller pulled out the gun and handed him the note "your money or your life" he said "I have to think about that now."

Fri, 09/14/2012 - 15:30 | 2796578 Sphinx_www
Sphinx_www's picture

Egan is a leading indicator. It wont be a decade before the rest catch up.

Fri, 09/14/2012 - 15:30 | 2796579 alfred b.
alfred b.'s picture

 

    ....wonder if moody's and/or s&p will "keep up with the Jones's"

 

Fri, 09/14/2012 - 15:30 | 2796580 ziggy59
ziggy59's picture

On a long enough timeline the credit of the U.S. goes to F

Fri, 09/14/2012 - 15:31 | 2796583 Jlmadyson
Jlmadyson's picture

Timmy G: "No risk of credit rating downgrade."

How about the risk after a couple of downgrades Timmy?

Timmy G gonna get ya.

Fri, 09/14/2012 - 15:32 | 2796587 uno
uno's picture

music to bernake, wants US dollar down fast

Fri, 09/14/2012 - 15:32 | 2796588 pendragon
pendragon's picture

bitch slap from the regulators in 5,4,3,2,1.....

Fri, 09/14/2012 - 15:32 | 2796590 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Although US debt should be considered junk, I will say downgrading them because the Fed prints is not logical.  The Fed is a private for profit bank that has no government ties to the US.

Now downgrading the Fed, that would be something!

Fri, 09/14/2012 - 15:36 | 2796616 giovanni_f
giovanni_f's picture

Why not taking the direttissima from AA -> DDD?

Fri, 09/14/2012 - 15:37 | 2796621 ziggy59
ziggy59's picture

Why not? Because we're not batteries or tits.

Fri, 09/14/2012 - 15:37 | 2796618 Ying-Yang
Ying-Yang's picture

Now eliminating the Fed, that would be something!

fixed it for ya

Fri, 09/14/2012 - 15:37 | 2796624 q99x2
q99x2's picture

Arrest Bernanke for financial terrorism.

Fri, 09/14/2012 - 15:38 | 2796628 lolmao500
lolmao500's picture

Time for SP, Moody and Fitch to man up and do it too.

Fri, 09/14/2012 - 15:46 | 2796673 Dr. Engali
Dr. Engali's picture

Yeah right. The U.S wll go down like AIG.....AAA rated.

Fri, 09/14/2012 - 15:38 | 2796630 WhiteNight123129
WhiteNight123129's picture

THis ~I am completly nuts~ strategy is to force GOOG AAPL MSFT ORCL to spend the 1.6% of GDP they hoard in cash and waste it, Corporate Keynesianism.

Fri, 09/14/2012 - 15:38 | 2796631 monopoly
monopoly's picture

Wow, they got a pair, don't they. Where is this honesty coming from. Not used to it.

Fri, 09/14/2012 - 15:39 | 2796632 101 years and c...
101 years and counting's picture

egan jones better not be planning to stay in a manhattan hotel this week.  if so, he better be out of the room when the chambermaid comes in.

Fri, 09/14/2012 - 15:39 | 2796638 Rylie
Rylie's picture

Speaking of that it's quite the coincidence that the Middle east erupting is happening the same time the US dollar is being killed off.

 

 

Fri, 09/14/2012 - 19:30 | 2797477 lakecity55
lakecity55's picture

....angry citizens make better soldiers when drafted and told AQ killed their 401Ks.

Fri, 09/14/2012 - 15:45 | 2796641 AvenoSativo
AvenoSativo's picture

Hence, in our opinion QE3 will be detrimental to credit quality for the US.

 

They should be more accurate and call a spade a spade. BenBanker did not announce QE3 this Thursday, what he announced was QE&infin. That is, he did not announce another round of QE but infinite rounds of QEs.

Fri, 09/14/2012 - 16:17 | 2796830 Threeggg
Threeggg's picture

Look at it this way.....................

Gold is up $30 on that news !

$30 Bucks

Fri, 09/14/2012 - 15:40 | 2796646 Jlmadyson
Jlmadyson's picture

Love this AP story off twitter just now.

Rising gas prices crimp US consumer spending. Fed move could push prices higher.

Really? For reals? You don't say?

Fri, 09/14/2012 - 15:41 | 2796648 Dr. Engali
Dr. Engali's picture

They should have downgraded the U.S to junk. By the time a ten year matures, sure you will have gotten your money back, but it will only be good for wiping your ass. And it really won't even be good for that.

Fri, 09/14/2012 - 15:59 | 2796745 Yen Cross
Yen Cross's picture

Good post Englai. Wood chippers, will be in "vogue"? Or we can use our "left index finger"?

Fri, 09/14/2012 - 15:42 | 2796650 JuliaS
JuliaS's picture

Should've been downgraded to BAAAAH.

Fri, 09/14/2012 - 15:43 | 2796654 Overfed
Overfed's picture

Sean Egan has balls that clank! I just hope he doesn't suddenly develop heart trouble or become suicidal.

Fri, 09/14/2012 - 15:43 | 2796655 geewhiz190
geewhiz190's picture

don't know if they mentioned this but what Ben did now takes the heat off congress to do a thing. probably made that whole situation worse

Fri, 09/14/2012 - 15:44 | 2796666 victor82
victor82's picture

Everybody hold fucking hands!

The Duchess of Cambridge has perkytits, a lovely ass, and Mitt Romney will save us.

Meanwhile, has anyone noticed that Robert Mugabe is wallpapering his Master Bathroom Suite in U.S. fiat?

Fri, 09/14/2012 - 15:46 | 2796674 Urban Redneck
Urban Redneck's picture

EJ, the Rodney Dangerfield of the comedy troupe known as Ratings Agencies

can't get no respect meets it's funny because it's true

Fri, 09/14/2012 - 15:48 | 2796681 debtor of last ...
debtor of last resort's picture

So, Egan, Europe should not go federal in your opinion?

Fri, 09/14/2012 - 15:50 | 2796699 debtor of last ...
debtor of last resort's picture

Because currency debasement has to be backed by at least a couple hondred million people? To do the job right?

Fri, 09/14/2012 - 15:49 | 2796685 willien1derland
willien1derland's picture

Bernacke has done nothing less than transfer wealth from the 99% to the top 5% & ensure his stakeholders, the largest US Banks, get paid...WHY THE HELL DOES GOLDMAN SACH & MORGAN STANLEY STILL HAVE ACCESS TO THE FED DISCOUNT WINDOW??!!! THEY ARE NOT BANKS - THEY WERE GRANTED THAT STATUS BY VIRTUE OF THE FACT THAT THE FINANCIAL SYSTEM COLLAPSED! It is OBSCENE - Neither 'bank' has a retail banking footprint or conducts ANY true retail banking operations - 98% of Americans could not avail of these 'banks' services due to the fact that 98% do not meet the capital requirement, however, the US TAXPAYER is FULLY LIABLE for their antics - It is absolutely unacceptable & I hope Bernacke enjoys his moment because history will show him to be totally incompetent -

Fri, 09/14/2012 - 15:58 | 2796742 aheady
aheady's picture

You had me 'til "incompetent".

Fri, 09/14/2012 - 21:19 | 2797760 Nimby
Nimby's picture

How do you transfer wealth from the "99%" to the top "5%"?  

Fri, 09/14/2012 - 15:48 | 2796688 Jlmadyson
Jlmadyson's picture

Hey S&P remember when we only had $14 Trillion in debt and you downgraded us?

The good times right.

Fri, 09/14/2012 - 15:59 | 2796689 kito
kito's picture

 egan feels that the country will see its borrowing costs rise because the economy will recover...............NOT..............there will be no recovery until the debt overhang disappears, affordable energy is discovered, and the population dwindles...........................the country will see its borrowing costs rise because the world will lose faith in the u.s...........even egan jones doesnt get it........................

Fri, 09/14/2012 - 16:26 | 2796840 Threeggg
Threeggg's picture

Kito,

In short hand your post is written in one word.................

NEVER !

Fri, 09/14/2012 - 15:56 | 2796696 honestann
honestann's picture

honestann downgrades USSA to ZZZ---

...with negative guidance!

Fri, 09/14/2012 - 15:50 | 2796698 mrktwtch2
mrktwtch2's picture

who listens to eagan jones..??

Fri, 09/14/2012 - 16:05 | 2796719 Jlmadyson
Jlmadyson's picture

The folks walking out of Lehman Brothers four years to the day.

Only in respospect does Egan get credit.

Marc Faber: Give every household $10 million.

Now this is my kind of QE. Let the good times roll.

Fri, 09/14/2012 - 16:01 | 2796759 Yen Cross
Yen Cross's picture

 I'll toss ya a greeny if you can name 5 ratings agencies? I'll toss ya another greeny, if you can name the ratings agency that sent "European bond yields up" last November?

Fri, 09/14/2012 - 17:46 | 2797150 Bolweevil
Bolweevil's picture

Moody's Fitch E-J S&P First Afghan Credit Risk Ratings (had to look that one up, bet they're busy these days). I'm going to guess Fitch hit the Limeys with the downgrade last week?

Fri, 09/14/2012 - 18:48 | 2797339 Yen Cross
Yen Cross's picture

 Well Done! I just wish the answer came that "Toad" above you! Limey downgrades, are like "BoJ" downgrades.

  dirty money " carry trade" havens.

Fri, 09/14/2012 - 15:54 | 2796721 Meesohaawnee
Meesohaawnee's picture

but Cramer said that the fed is a hero !! whos right?

Fri, 09/14/2012 - 15:54 | 2796724 Pejorative Requiem
Pejorative Requiem's picture

Ultimately the grading doesn't matter (if the world's money still sees the US as one of the safest bets). What matters is the internest rate required to sell more paper. In the face of open ended put promises, I wonder if even the Steely Dan Dow (that's all it is now, just a self gratification toy) will care much about a downgrade; Moody's, S&P, Bob's Gold and Coin, whoever.

Fri, 09/14/2012 - 15:56 | 2796729 MachuPicchu
MachuPicchu's picture

Egan should be audited! and downgraded!

EEUU is and will always be AAA... !

Fri, 09/14/2012 - 15:58 | 2796743 Jlmadyson
Jlmadyson's picture

You missed an A.

Love your pal,

Warren

Fri, 09/14/2012 - 16:04 | 2796767 Yen Cross
Yen Cross's picture

EGAN should be "applauded" for having the guts enough to state reality, you fucktard!

Fri, 09/14/2012 - 15:56 | 2796732 vote_libertaria...
vote_libertarian_party's picture

...report faxed from an undisclosed underground bunker...

Fri, 09/14/2012 - 16:00 | 2796755 tahoebumsmith
tahoebumsmith's picture

Meanwhile the BRICS continue to undermine the FED'S insanity by moving further away from the dollar. If the currency crisis wasn't already bad enough, now the fresh flood of dollars will pretty much ensure the death of the dollar. This is war without typical means of warfare, there will be no bloodshed from the enemy, only from within when total chaos is unleashed...

Fri, 09/14/2012 - 16:08 | 2796785 ebworthen
ebworthen's picture

ROFLMAO!

Hey Ben!?  Ben Bernanke!?

Yes you!  Did you get the memo!?

Fri, 09/14/2012 - 16:13 | 2796810 LULZBank
LULZBank's picture

Shuusshhh Damn it!!!

Now I have to count again how many zeroes to add!!!

Fri, 09/14/2012 - 16:10 | 2796802 Jlmadyson
Jlmadyson's picture

Oh gah look at the Drudge headline right below the main headline:

Flash Us Credit Downgraded...

Below it with Bernake pic almost can see the pain on his face:

PUMPING BLAMED.....

Nailed it Drudge heh.

Fri, 09/14/2012 - 16:22 | 2796844 Nothing To See Here
Nothing To See Here's picture

I am amazed that Egan Jones' move was actually reported by CNBC : http://www.cnbc.com/id/49037337

Fri, 09/14/2012 - 16:28 | 2796874 Bolweevil
Bolweevil's picture

Egan-Jones
We'll cut you. (C)

Fri, 09/14/2012 - 16:30 | 2796886 GrinandBearit
GrinandBearit's picture

Market would not care even if they downgraded the US to -ZZZ. 

Ben the Beard has everything under control!

Fri, 09/14/2012 - 16:43 | 2796930 You Didn't Buil...
You Didn't Build That's picture

Problem is people overseas are scared sh*tless of losing 100% of their money so they build treasuries hoping they lose less.

That's the only explanation i have for treasuries being in such demand.

Fri, 09/14/2012 - 16:42 | 2796935 foodstampbarry
foodstampbarry's picture

President Zero's destruction of the American empire in 1 term is right on track.

Sat, 09/15/2012 - 12:24 | 2798623 falak pema
falak pema's picture

It is documented by historians that when the Gods asked Caracalla why the Roman Empire commenced its decline during his reign he replied : "why don't you ask Caesar that when he crossed the Rubicon, or Nero when he burnt Rome!" 

Roman Decadence, Rome and Romania, and the Emperors Who Weren't

Crisis of the Third Century - Wikipedia, the free encyclopedia

Fri, 09/14/2012 - 16:43 | 2796936 Van Halen
Van Halen's picture

In the last 72 hours of Obama's presidency, we've had our embassies overrun, our embassy people murdered, government on another wild printing spree, another downgrade for the nation's credit rating, the Middle East is burning, and Obama is tweeting us about meeting Jay Z and Beyonce.

 

Fri, 09/14/2012 - 17:01 | 2796983 LULZBank
LULZBank's picture

... and English Princess's tits exposed by the filthy French.

Sat, 09/15/2012 - 12:12 | 2798605 falak pema
falak pema's picture

don't understand your logic; if the tits were filthy then the french compounded the "filth"; but if the tits were beautiful, the french press compounded their beauty by dissemination of their imagery.

Beauty like filth is in the eye of the beholder; apparently the french press finds them "boootifoool" but Royal morals "heeeepocritical". 

Fri, 09/14/2012 - 17:04 | 2796997 mademesmile
mademesmile's picture

And don't forget, he's leading in the polls. Stupid, stupid, stupid. If people vote for him, I'm for a scarlet letter of some sort, so the idiots can be moved to the coasts.

Fri, 09/14/2012 - 21:06 | 2797726 Nimby
Nimby's picture

Do you think if Romney is elected things will turn around?  Or do you think they will just crumble more slowly?

Fri, 09/14/2012 - 17:11 | 2797025 Van Halen
Van Halen's picture

I forgot to add multiple bomb threats around the country today. So many important things to ignore for a good time to be had at a fundraiser!

Fri, 09/14/2012 - 17:15 | 2797043 Van Halen
Van Halen's picture

Ooops! Also forgot to add that news broke about how King Putt has skipped over half his intelligence briefings. What will happen in the NEXT 72 hours of this horrific presidency?

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