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Egan Jones Downgrades USA From AA+ To AA, Outlook Negative

Tyler Durden's picture





 

A few weeks ago when discussing the imminent debt ceiling breach, and the progression of US debt/GDP into the 100%+ ballpark, we reminded readers that in February S&P said it could downgrade the US again in as soon as 6 months if there was no budget plan. Not only is there no budget plan, but the US is about to have its debt ceiling fiasco repeat all over as soon in as September. Which means another downgrade from S&P is imminent, and continuing the theme of deja vu 2011, the late summer is shaping up for a major market sell off. Minutes ago, Egan Jones just reminded us of all of this, after the only rating agency that matters, just downgraded the US from AA+ to AA, with a negative outlook.

From Egan Jones:

Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.

 

Without some structural changes soon, restoring credit quality will become increasingly difficult. Yields on 10-year treasury notes have fallen to their lowest since early Feb 2010 with US Federal Reserve's aggressive purchases of US Treasuries. A concern is the rise in interest rates placing higher pressure on the US's credit quality. Excess growth of money supply (i.e., debt monetization) harms creditors and ultimately, the economy. Weak debt reduction efforts force a neg. watch.

 


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Thu, 04/05/2012 - 17:11 | Link to Comment maxmad
maxmad's picture

hats off to Jones!!!!

Thu, 04/05/2012 - 17:23 | Link to Comment Careless Whisper
Careless Whisper's picture

call boxer and revoke their passports ! 

Thu, 04/05/2012 - 17:44 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

The PhD economists all agree: nobody, nobody, could have seen this coming.

 

Thu, 04/05/2012 - 17:54 | Link to Comment Doubleguns
Doubleguns's picture

Well Timmy did not see it coming thats for sure. Does that make him a nobody?

 

http://dailybail.com/home/geithner-no-risk-us-will-lose-aaa-credit-ratin...

Thu, 04/05/2012 - 18:27 | Link to Comment Chief KnocAHoma
Chief KnocAHoma's picture

Uh oh... he missed math class too.

 http://annoyanidiot.blogspot.com/

Thu, 04/05/2012 - 19:34 | Link to Comment Comay Mierda
Comay Mierda's picture

do their ratings include probability of currency crisis/hyperinflation?  or just a hard default?

the US credit rating is junk in my book

Thu, 04/05/2012 - 22:43 | Link to Comment markmotive
markmotive's picture

Too little, too late.

MIT predicts the world economy will collapse by 2030:

http://www.planbeconomics.com/2012/04/05/mit-predicts-that-world-economy...

Fri, 04/06/2012 - 00:15 | Link to Comment DeadFred
DeadFred's picture

Bunch of rank optimists!

Fri, 04/06/2012 - 01:27 | Link to Comment q99x2
q99x2's picture

I just got depressed. American Idol until 2030.

Tue, 04/17/2012 - 18:36 | Link to Comment mp95bravo11208
mp95bravo11208's picture

Timmy could not see anything anytime and anywhere. The man never had another job in his life outside of the Fed.  Truly pathetic this entire government now is.

Thu, 04/05/2012 - 20:20 | Link to Comment sof_hannibal
sof_hannibal's picture

Dr. David Brusca, PhD (of the Bernak school of psychoanalytic printing - a for profit online university with the full backing of 1 trillion in unsubsidized student loans) and his disertation student, Mr. MDB, million dollar bailout, unlicensed life coach to the stars) are predicting a housing turn around shortly. No worries, good things to come.

The economy is heating up people, but you have to "play to win..."

Thu, 04/05/2012 - 22:20 | Link to Comment johnu1978
johnu1978's picture

NEED MORE DOWNGRADES!!!

 

-John
Primitive Skills Classes
http://www.heartrootnatureconnection.com

Thu, 04/05/2012 - 23:26 | Link to Comment WhiteNight123129
WhiteNight123129's picture

What is coming?

Thu, 04/05/2012 - 23:43 | Link to Comment CryingBear
CryingBear's picture

I'm pretty sure the Republicans did and they probably put on leveraged positions before the debt debates because there is no reason not to raise tax revenue when the ratings agencies clearly stated that spending cuts and revenue increases must be included to retain AAA rating. Even closing tax loopholes wouldve prevented a ratings cut.

It was so easy to avoid the ratings cut but Republicans simply refused everything. Its almost like they wanted a ratings cut.

Thu, 04/05/2012 - 18:14 | Link to Comment kengland
kengland's picture

Egan Jones who? I think my downgrading the US may have more of an impact.

Thu, 04/05/2012 - 19:31 | Link to Comment Chump
Chump's picture

Yeah because no way will anyone else follow suit.

http://www.zerohedge.com/article/egan-jones-downgrades-us-aaa-aa

http://www.zerohedge.com/news/sp-downgrades-us-aa-outlook-negative-full-text

What do you think?  More or less than a month this time?

Thu, 04/05/2012 - 23:44 | Link to Comment CryingBear
CryingBear's picture

S&P already said they wont cut before elections are over.

Fri, 04/06/2012 - 13:31 | Link to Comment Chump
Chump's picture

We'll see won't we?

http://www.zerohedge.com/news/sp-threatens-us-another-downgrade-little-6-months

 

“That is going to have to say something about entitlements, and that is probably going to have to say something about revenues.”

Bond investors ignored the downgrade, driving Treasury yields to the lowest levels in history, amid concern the U.S. economy was stalling and as Europe’s debt crisis intensified.

Treasuries have returned 3.9 percent since the rating cut and gained 9.8 percent last year, the debt’s best performance since 2008, according to Bank of  America Merrill Lynch index data.

“I don’t think anything is going to happen between now and the election in November,” Chambers said.

S&P said in August that political brinkmanship over increasing the government’s debt ceiling year showed the U.S. is becoming “less stable, less effective and less predictable” as the Treasury almost reached its borrowing limit before the government reached a compromise.

The “political brinkmanship hasn’t gone away,” Chambers said today. “That simply doesn’t happen in other AAA economies.”

He must not read Zerohedge, or do any sort of legit analysis.  If political brinkmanship is his main gripe then just wait until he sees what happens when we hit the debt ceiling nearly two months before the selection.

 

http://www.zerohedge.com/news/us-debt-ceiling-d-day-september-14-2012

 

Chambers may just have to eat crow, again, as S&P has no choice but to downgrade well before the elections.

Fri, 04/06/2012 - 07:14 | Link to Comment Iconoclast
Iconoclast's picture

Actually as a canary in the contaminated coal mine they are incredibly accurate..being light on their feet and devoid of political persuasion offers such liberty and freedom.. ;-)

Fri, 04/06/2012 - 11:16 | Link to Comment GeezerGeek
GeezerGeek's picture

Just wait until casting doubt on the U.S. government's ability to act responsibly is considered an act of terrorism. Bad news is not to be allowed!

Thu, 04/05/2012 - 17:36 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

Had a laugh just being reminded of that failed American 'Super Committee'.

How quickly the Great Idea of one day, is a Forgotten Fiasco soon afterwards.

Next time it should be a 'Super Duper Committee'.

Thu, 04/05/2012 - 17:56 | Link to Comment Seer
Seer's picture

Do people demand a really just system? Well, we'll arrange it so that they'll be satisfied with one that's a little less unjust ... They want a revolution, and we'll give them reforms -- lots of reforms; we'll drown them in reforms. Or rather, we'll drown them in promises of reforms, because we'll never give them real ones either!!

- DARIO FO, Accidental Death of an Anarchist

Thu, 04/05/2012 - 18:12 | Link to Comment IrritableBowels
IrritableBowels's picture

Super mega-ultra thunder committee.

Thu, 04/05/2012 - 20:13 | Link to Comment sof_hannibal
sof_hannibal's picture

On triple secret probation... the super friends

Thu, 04/05/2012 - 21:02 | Link to Comment azzhatter
azzhatter's picture

I would just turn over the whole thing to Maxine Waters

Thu, 04/05/2012 - 18:01 | Link to Comment Stoploss
Stoploss's picture

Happy Easter Obozo!!

Thu, 04/05/2012 - 18:40 | Link to Comment nmewn
nmewn's picture

lol...what's the over and under on a "law enforcement" raid on Egan anyways? ;-)

Thu, 04/05/2012 - 18:37 | Link to Comment Silver Bug
Silver Bug's picture

We all know it should be rated junk.

 

http://ericsprott.blogspot.ca/

Thu, 04/05/2012 - 20:55 | Link to Comment Non Passaran
Non Passaran's picture

As long as they can print, they can't default. AA is reasonable.

Fri, 04/06/2012 - 00:27 | Link to Comment DeadFred
DeadFred's picture

I doubt that the real return on the bonds will be worse than the Greek writedown since they can print. Well, except the 30yr... and maybe the 10yr and... oh I give up, who knows how bad it can get.

Thu, 04/05/2012 - 20:01 | Link to Comment vast-dom
vast-dom's picture

No hats off! AA is not even close. Sorry.

Thu, 04/05/2012 - 21:11 | Link to Comment azzhatter
azzhatter's picture

Is this rating seasonally adjusted?

Thu, 04/05/2012 - 17:13 | Link to Comment Straying from t...
Straying from the flock's picture

The end of the paper ponzi scheme is almost upon us.  I am preparing accordingly:

http://strayingfromtheflock.org/2012/04/05/an-open-letter-to-my-friends/

If I am wrong, I will have lost nothing.  If I am correct, will you have prepared yourself?

Thu, 04/05/2012 - 17:13 | Link to Comment Lost Wages
Lost Wages's picture

Cue QE. $18.1 Trillion to pay it all off.

Thu, 04/05/2012 - 17:15 | Link to Comment maxmad
maxmad's picture

QE will only come after the 20% or better correction, bitchez!  Get your dow 10k hats out again!!!

Thu, 04/05/2012 - 18:46 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Not to piss on your parade but my slide rule says 20% won't get us to 10k.

Thu, 04/05/2012 - 19:00 | Link to Comment Rainman
Rainman's picture

When it breaks through 10K you bitchez won't be hearing from me much.... I'll be too busy partying in Monte Carlo.

Thu, 04/05/2012 - 17:14 | Link to Comment Auburn
Auburn's picture

Thank God for long weekends and short memories - all bullish

Thu, 04/05/2012 - 17:16 | Link to Comment Tsar Pointless
Tsar Pointless's picture

O 4 fukcs sake!

Does this mean we go directly to 1500, without passing 'Go' and collecting $2,000,000,000,000 digi-dollars?

Oh, say - can you see?

Just how bullish this will be.

Egan Jones are freedom-hating terrorists!

Thu, 04/05/2012 - 17:48 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Egan Jones are freedom-hating terrorists!

El Qaiegan and Osama bin Jones are freedem hatting terrists!!1!

 

Thu, 04/05/2012 - 21:31 | Link to Comment sof_hannibal
sof_hannibal's picture

They're on Obama's no terrorist on american soil watch list for sure, right next to ZH and the Michigan Milita

Thu, 04/05/2012 - 17:15 | Link to Comment Theta_Burn
Theta_Burn's picture

It's not that America can't pay her bills...she can, thats why we need to pass this debt ceiling increase, to instill faith & trust in the US government...

Barack Obama....during the last debt ceiling debate...

Thu, 04/05/2012 - 19:13 | Link to Comment centerline
centerline's picture

LOL.  The system working against itself.  If PhD economists were so right, why is the system operating so wrong?  Rhetorical question of course.

Shit - it seems mainstream economics is going to go down the ship swearing that if they just went faster the water would not flood the hull and drag them down.

Well, I suppose I could only conclude that mainstream economics is nothing more than smoke and mirrors intended to disguise a greater game that understands better the world dynamic, human behavior, history, etc. - and I am just along for the ride.

Thu, 04/05/2012 - 17:16 | Link to Comment LowProfile
LowProfile's picture

In fact the USA's rating should be AAA+!

But that's only because they can print as many dollars as they need to continue payments.

THE US DOLLAR NEEDS A RATING INSTEAD.

 

Thu, 04/05/2012 - 18:47 | Link to Comment resurger
resurger's picture

i think Dagong now will rate US debt B+ with default outlook once they dump their treasuries

Thu, 04/05/2012 - 21:08 | Link to Comment sitenine
sitenine's picture

This is an interesting point.  However, I just saw an interesting interview: Max Keiser interviews Jim Rickers in the second half of his latest show http://maxkeiser.com/2012/04/05/kr271-keiser-report-angel-dust-for-ponzi...

Paraphrasing, Rickards states that the Treasury/Fed can freeze China's bonds in the event that they try to dump, thereby putting the bonds in 'escrow', and preventing them from being sold.  He further asserts that this 'escrow' action would actually boost the market for bonds because of the coincidental shortage that occurs when $1T of an asset 'disappears'.

Any thoughts?

Thu, 04/05/2012 - 23:30 | Link to Comment HurricaneSeason
HurricaneSeason's picture

It looks like Japan bought $200 billion in 2011, I don't see any other country buying any significant amount. I thought there was at least $1 trillion in old debt rolling over every year along with at least $1 trillion in new debt. Japan and Iran should be able to buy all they want. I cant see Japan thinking they should shoot for $300 billion this year just because China might get screwed out of $1 trillion.

Fri, 04/06/2012 - 11:26 | Link to Comment GeezerGeek
GeezerGeek's picture

And then China stops exports of iPhones, iPads, drywall, tainted pet food, electronic devices, etc. How long will the American public put up with the deprivations associated with a lack of smartphones, new TV sets, etc. Barack would be impeached in a heartbeat if he deprived the U.S. consumer of all those trinkets.

Besides, nothing can be done before every American has at least one TV set - made in China of course - that can spy on the user even when not turned on.

Fri, 04/06/2012 - 00:38 | Link to Comment DeadFred
DeadFred's picture

They may be able to print but unless they get enough occupants out of the DC clown cars to vote 'yes' they can't spend.

Thu, 04/05/2012 - 17:19 | Link to Comment bingo was his name
bingo was his name's picture

Remeber D is for Degree so we got plenty of room before we have to be worried / sarc off

Thu, 04/05/2012 - 17:19 | Link to Comment johngaltfla
johngaltfla's picture

Gee, I wonder if someone is going to have massive strip search and cavity searches every time they fly commercial now.

If I worked for Egan-Jones, I would arrive at least 4 hours before any flight now because this administration DOES believe in revenge.

Fri, 04/06/2012 - 11:28 | Link to Comment GeezerGeek
GeezerGeek's picture

If you know you're in for a body cavity search, chug a laxative with the appropriate lead time.

Thu, 04/05/2012 - 17:20 | Link to Comment Lost Wages
Lost Wages's picture

Egad, Jones!

Thu, 04/05/2012 - 17:22 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

The Tylers have maybe pulled off their best day yet with great articles!  Bravo!

Thu, 04/05/2012 - 17:23 | Link to Comment blindman
blindman's picture

this must have something to do with it.
http://www.youtube.com/watch?v=uPvfjjARJUc&feature=results_video&playnex...
Impacts of Fukushima Part 1 Tim Rifat
Impacts of Fukushima Part 2 Tim Rifat
Impacts of Fukushima Part 3 Tim Rifat
.
and this.
Gary Null - The Natural Living Show
Why we should be concerned about the increasing power of the Presidency. Guest: author Brandon Turbeville.
Thursday April 5 12:00pm
http://wbai.org/index.php?option=com_content&task=view&id=11290&Itemid=141

Thu, 04/05/2012 - 22:56 | Link to Comment geekgrrl
geekgrrl's picture

Thanks for the links. Tim Rifat doesn't mince any words, although I lost track of how many times he said "massive" in describing the radiation releases. I think it's probably safe to predict a large increase in the number of US "dumpster babies" in the coming years.

Thu, 04/05/2012 - 23:59 | Link to Comment blindman
blindman's picture

http://www.youtube.com/watch?v=RqvYuvwy9Z8
Rense & Rifat - A Fukushima Fallout Will Dwarf the US Arsenal
.
this link, part 1, has a video portion.
warning, graphic.

Fri, 04/06/2012 - 18:09 | Link to Comment geekgrrl
geekgrrl's picture

Wow. Just wow. Thanks.

Thu, 04/05/2012 - 17:24 | Link to Comment navy62802
navy62802's picture

Excess growth of money supply (i.e., debt monetization) harms creditors and ultimately, the economy.

----

No fucking shit. Great observation Egan Jones. lulz

Thu, 04/05/2012 - 17:25 | Link to Comment blu
blu's picture

Until November elections are behind us this kind of thing are just political theater. I don't trust the rating agencies -- none of them -- to do anything except insure their own survival by pretending to give a shit. They don't. And nobody cares what they think.

Thu, 04/05/2012 - 17:34 | Link to Comment MachoMan
MachoMan's picture

They're simply another component of the overall mechanism used by the FED/Treasury to manage the currency... 

Thu, 04/05/2012 - 20:12 | Link to Comment sof_hannibal
sof_hannibal's picture

Isn't a budget "vote" coming up before the election?

Thu, 04/05/2012 - 20:26 | Link to Comment WonderDawg
WonderDawg's picture

You mean the one they haven't done for the last 3 years? Yeah, I think so.

Thu, 04/05/2012 - 20:49 | Link to Comment sof_hannibal
sof_hannibal's picture

Noted, back to watching kim khardashin and the Situation "news" on E!, nothing to see here... Now, talk about financial wizards... spray tans and cocaine and McDonlads and sparks and lotto tickets and prozac and gastric bypass (those last two, courtesy of ObamaCarePermanente) -- for everyone!

I would contend that America (right now) is at the height of it's leading elite/ academic culture... If only American idol could land Britney Spears, my life would be complete.

CNBC says it's ripe time to get back in the market and dump my usesless bars of worthless gold... all while Rome burns (or GREECE anyway). let them eat cake. Amurkia, phuck yeah

Thu, 04/05/2012 - 17:28 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

Damn, I still don't have my 2014 TBT calls.  I'll need to put in some buy orders on Monday.

Thu, 04/05/2012 - 17:32 | Link to Comment sitenine
sitenine's picture

Shut up, shut up, shut up. The US is AAA, and will always be AAA. Americans are producers - we all KNOW this, right? GDP growth is guaranteed! The Bernark told us his QE is working - just look at equities! Hell, the entire debt can be paid back in a matter of a few years because the rich can easily pay an additional few trillion in taxes a year. Geez, isn't anyone paying attention to what the POTUS say? Good paying jobs are everywhere - doesn't anyone believe the BLS? Doomers, all of you!!! Bwahahahahahaha!

Thu, 04/05/2012 - 17:33 | Link to Comment DormRoom
DormRoom's picture

if I were Egan Jones, I'd look out my office window for drones.  Government comin for ya.

Thu, 04/05/2012 - 17:35 | Link to Comment slewie the pi rat
slewie the pi rat's picture

why TF did they do that, now we will be subjected to more platitudes from the orifice of Omaha

Thu, 04/05/2012 - 17:39 | Link to Comment NotApplicable
NotApplicable's picture

You just answered your own question, slewie.

Thu, 04/05/2012 - 18:05 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i would say that is clonie's best comment in her 2 almost-2-weeks, N/A

on a downgrade, too! 

Thu, 04/05/2012 - 20:29 | Link to Comment nmewn
nmewn's picture

Well they say imitation is the sincerest form of flattery slewie. Looks like you pissed someone off bad...well done...lol.

"Forgive your enemies, but never forget their names."...hyphenated...JFK ;-)

Thu, 04/05/2012 - 21:14 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

bilary sent her;  she's a spook-bot

i turned her the first day;  L0L!

Thu, 04/05/2012 - 22:35 | Link to Comment nmewn
nmewn's picture

ROTFL!!!

Clearly I'm going to have to step it up a notch...I've had a few that can't even get a vowel in between two consonants when addressing me.

Somehow now, I feel inadequate ;-)

Thu, 04/05/2012 - 17:35 | Link to Comment Nozza
Nozza's picture

WTF is Egan Jones?

Thu, 04/05/2012 - 17:53 | Link to Comment toadold
toadold's picture

Egan Jones is a credit rating company for buy side customers only.  They are not like S&P who take money from bond sellers to rate their product.  

Fri, 04/06/2012 - 04:47 | Link to Comment Nozza
Nozza's picture

Thanks toadold. I didnt realize that there was a buy-side (investor) ratings agency. Heard of Moody's, S&P etc but this one is new to me.

Thu, 04/05/2012 - 17:41 | Link to Comment NotApplicable
NotApplicable's picture

"Paging Robert Brusca!

Please pick up the white curtesy phone located just outside your reality deprivation chamber."

Thu, 04/05/2012 - 17:51 | Link to Comment ffart
ffart's picture

This downgrade should be good for a 3-6 month dollar rally.

Thu, 04/05/2012 - 17:57 | Link to Comment jmcadg
jmcadg's picture

I thought the Dollar rating was Junk status.

Thu, 04/05/2012 - 18:00 | Link to Comment chet
chet's picture

Winter is coming.

Thu, 04/05/2012 - 21:06 | Link to Comment sof_hannibal
sof_hannibal's picture

They'll bend the knee or I'll destroy them

Thu, 04/05/2012 - 18:03 | Link to Comment YesWeKahn
YesWeKahn's picture

How dare they!

 

Timo.

Thu, 04/05/2012 - 18:13 | Link to Comment I am Jobe
I am Jobe's picture

Hey how dare they downgrade. USSA has IPADS and with Facebook IPO things will be peachy. Spend Spend Spend, rack up that debt and fly the Flag and chant USA USA USA.

Thu, 04/05/2012 - 21:11 | Link to Comment sof_hannibal
sof_hannibal's picture

That's one thing people really haven't mentioned... what's Apple's nxt product that's going to save America... I mean save foxconn... i hope it's a mac with a floppy drive and a mouse... or some wicked cool glasses, like the one's google is coming out with... so u can google/ sext while you walk without looking down

Thu, 04/05/2012 - 18:13 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

Bullish!

Thu, 04/05/2012 - 20:28 | Link to Comment sof_hannibal
sof_hannibal's picture

Bullish on your bullish... unemployment, lowest since 1912 on the revised, adjusted, re-revised, mark to market unemployment stats... with the actual numbers sitting in a FED account titled BarrackChewco1 and Mittens_JEDI_2...

Thu, 04/05/2012 - 18:23 | Link to Comment fuu
fuu's picture

\EJ/

Thu, 04/05/2012 - 18:24 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

downgrade?  negative watch?

for some reason this is giving me a rise in my collateral, BiCheZ!

Thu, 04/05/2012 - 18:27 | Link to Comment lolmao500
lolmao500's picture

And when deficits are cut to 0... the GDP will take a 15%+ dive... shall be interesting to see.

Thu, 04/05/2012 - 18:30 | Link to Comment mendigo
mendigo's picture

This analysis sounds balanced and rational.
Is this some kind of trick?
Someone needs reprogramming.

Thu, 04/05/2012 - 21:14 | Link to Comment sof_hannibal
sof_hannibal's picture

The algo bots (news bots) are becoming sentient... right before they
Destroy us, they're feeling a little sorry for us humans (non algos)...

Thu, 04/05/2012 - 18:32 | Link to Comment SgtSchultz
SgtSchultz's picture

Egan Jones will get "bought out" in the interest of national security.

Thu, 04/05/2012 - 19:41 | Link to Comment max2205
max2205's picture

Well they saw something so they said something.

Thu, 04/05/2012 - 19:34 | Link to Comment HD
HD's picture

I like my ratings agencies with big fat hairy balls. Egan Jones has those balls. Timing however, they do not have. The market now has three days to spin this somehow magically positive.

Thu, 04/05/2012 - 18:40 | Link to Comment resurger
resurger's picture

Gold Bitchez!

Thu, 04/05/2012 - 23:56 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

Bullets and Food.

And upon this "bad news" Silver and Gold remain floundered in a pre-determind trading range. Yaaawn! Wake me up when something real happens..

Thu, 04/05/2012 - 18:41 | Link to Comment Everybodys All ...
Everybodys All American's picture

Obamanomics ... or is it reincarnate of Jimmy Carter. Either way any fool yes fool who votes for this man again needs to have their heads examined. I don't care who else you vote for or for that matter stay home because this guy does not need affirmation of yes his policies.

Thu, 04/05/2012 - 20:30 | Link to Comment hardcleareye
hardcleareye's picture

Big difference between Carter and Obama, Carter may have been a piss poor manager but the guy had integrity and would not be bought by the likes of the vampire squid, so please don't insult Carter by comparing him to "Obama The Whore" (the "hopelessness of denial Profit", I mean the "prophet of hope").

(No matter how bleak and stark the future may be, dealing with it "head on" surpass the ultimate hopelessness and despair that ultimately comes with the denial of reality...hence the "hopelessness of denial")

And while we a throwing political bs around, tell me what kind of policies to you think the GOP is going to implement, I don't see much of a difference between the Dems and the GOP these days, just different sides of the same coin. 

Pitty RP can't get enough votes to run.  I may not agree with him on a lot of issues, but I think he is cut from the same bolt of cloth that Carter was.  I would vote for him, even though I ask myself how effective he would be considering the political positions of the House and Senate, and that the main stream corporate media would crucify him.

Hey lets get Bernie Sanders to run for President on the 'Independent - (Democratic Socialist)" ticket!!! <snark> (we are soooo fucked....)

Thu, 04/05/2012 - 20:56 | Link to Comment sof_hannibal
sof_hannibal's picture

Who would have thunk it... Carter, the peanut farmer was right, Regan just had dementia... but he made you feel soooo good about the corporations... tear down this wall... now, or he will make you watch that movie about the Gipper... Cheers (salute with a six'er of Billy Beer) 4 the USSA

Fri, 04/06/2012 - 08:12 | Link to Comment DanDaley
DanDaley's picture

While there may not be much difference between Dems and Repubs in many areas, you have to admit that nobody does spiteful, vengeful Good Squads quite like the Dems -from having created the KKK (to kill Repubs and blacks), to Woodrow Wilson's head crackers, to FDR's internment camps (forerunner of the FEMA liquidation-reeducation camps to come), to Omojo's desire for a private army ("...as big and as well funded as the US military..."), to the Dems eternally bright burning passion: Gun Control (i.e., total subjugation of the American people -a major remaining difference between Dems and Repubs). 

Thu, 04/05/2012 - 18:50 | Link to Comment bugs_
bugs_'s picture

egad!

Thu, 04/05/2012 - 18:56 | Link to Comment onlooker
onlooker's picture

Egan-Jones Ratings Company

From Wikipedia, the free encyclopedia Jump to: navigation, search Egan-Jones Ratings Company Type Private company Industry Financial services Founded 1995 Founder(s) Sean Egan & Bruce Jones Headquarters Saline, Michigan[1], United States Area served Global Key people Sean Egan & Bruce Jones Website www.egan-jones.com

Egan-Jones Ratings Company, also known as EJR, was founded in 1995 and actively rates the credit worthiness of approximately 2000+ high yield and high grade U.S. corporate debt issuers. Egan-Jones is wholly supported by investors to minimize the potential for conflicts of interest in accessing credit quality[citation needed]. On Dec. 21, 2007, the SEC granted Egan-Jones NRSRO status, thus including them in a group of what is currently nine recognized NRSROs[citation needed].

The effectiveness of Egan-Jones' investor supported credit ratings has been measured by third parties including Richard D. Johnson of the Kansas City Federal Reserve, the Stanford University Business School and the University of Michigan's Business School.[2]

Sean Egan, principal of Egan-Jones Rating, appeared before Congress on October 22, 2008 and argued that issuers of complex securities "shopped" for ratings which resulted in a race to the bottom in terms of credit transparency. Rather than "beat up Moody's and S&P for behavior" they'd been financially motivated to pursue, the government needs to support a new business model paid for by investors, not issuers, to support the funding ecosystem which has so severely broken down, he asserted.[3]

Egan-Jones on July 16, 2011, became the first NRSRO to cut its rating on the United States from AAA to AA+.[4]

Thu, 04/05/2012 - 20:25 | Link to Comment mendigo
mendigo's picture

So there are honest people in this business?
I'm going to need time to process this?
Thanks for excellent post.

Thu, 04/05/2012 - 19:00 | Link to Comment tony bonn
tony bonn's picture

looks like some other executives will have assassination contracts opened on them by the bush crime syndicate....is that goober from s&p who downgraded the usa still alive?

Thu, 04/05/2012 - 20:10 | Link to Comment sof_hannibal
sof_hannibal's picture

They're going to have to pay eric prince of Xe/ Blacwater in US junk(ed) bonds...

Thu, 04/05/2012 - 19:06 | Link to Comment johnnymustardseed
johnnymustardseed's picture

RUH ROH!!

Thu, 04/05/2012 - 19:59 | Link to Comment hardcleareye
hardcleareye's picture

Zoinks...we've landed on the tail of a whale. (Shaggy)

Thu, 04/05/2012 - 19:33 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

I thought Fed could only buy AAA paper.

Thu, 04/05/2012 - 20:01 | Link to Comment sof_hannibal
sof_hannibal's picture

They're going to have to switch to Facescam.IPO paper... Zuck on the 3 dollar bill ya all

Thu, 04/05/2012 - 23:23 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

You must be referring to some other antiquated notions like rules of construction etc...GM prime bond holders know differently- rules represent mere challenges to this group of devos.... my advice to anyone today is watch more network sitcoms until their mind clears.

Thu, 04/05/2012 - 19:44 | Link to Comment CryingBear
CryingBear's picture

WTF, America is AAAA FYI

Thu, 04/05/2012 - 19:58 | Link to Comment sof_hannibal
sof_hannibal's picture

If and or when, the US stops paying it's military, or turns to conscription, be scared. There is another 100,000 SGT Robert Bales just waiting to snap. And most soldiers; ex or otherwise generally have their own personal arsonals... by creating an expensive, all volunteer military force, [the USA] the Army especially has dug it self into a hole... they can't all keep these (many of them at best semi-skilled/ blue collar "joes") on the payroll... and their aren't many job prospects for the avg. Grunt returning from combat...

many are placated with VA benefits, but what if those stop... America/ the world is certainly/ currently in some sort of 1984 meets a brave new world type horror film. Question 1) for the ZH crowd: Japan-- and their lost decade(s) with GDP/ debt ratios at insane levels. Can the US ramp it up that high to keep the show going for a few more years?

Question 2), if America's gulag crew (FBI, CIA, ATF, riot police, national guard, and so on, etc.); Stop getting paid, how long before the elite start raising their own private armies (para military)... Game of thrones bitches

Thu, 04/05/2012 - 20:04 | Link to Comment RoadKill
RoadKill's picture

Quick question. US debt to GDP is only 100% if you include debt owed to SS. The numbers for France and Italy are external debt numbers arent they? My understanding is that in Europe pension schemes are pay as you go and since France is demographically 20 years ahead of the US they are about to get crushed by this.

Anybody know where we can get apples to apples numbers?

Thu, 04/05/2012 - 20:23 | Link to Comment gavroche76
gavroche76's picture

France is not 20 years ahead of the US about demography. I dont have the exact numbers, but i know they are in a good position on that point, one of the best western countrys actually. That being said, the component of the youth is mostly made of arabs, wich make the situation... not so bright... 

Thu, 04/05/2012 - 20:34 | Link to Comment WonderDawg
WonderDawg's picture

I could be wrong on this, but I'm almost positive that debt number does NOT include SS obligations.

Thu, 04/05/2012 - 20:06 | Link to Comment Zgangsta
Thu, 04/05/2012 - 23:45 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

By doing the acreage math and location, looks like they got ripped off.

Thu, 04/05/2012 - 20:13 | Link to Comment AUD
AUD's picture

restoring credit quality will become increasingly difficult.

So Egan Jones is saying that the quality of US Treasury debt is such that it requires restoring, yet still gives US debt 'investment grade'.

Egan Jones are a bunch of tools.

Thu, 04/05/2012 - 21:25 | Link to Comment Zgangsta
Zgangsta's picture

The explanation is simple: they are grading on a curve. Otherwise, every country would fail.

Thu, 04/05/2012 - 20:26 | Link to Comment gavroche76
gavroche76's picture

Have you notice that Market Watch ignored that news ??? I know what you're all thinking: what the hell am i doing on that site ??? 

Thu, 04/05/2012 - 20:31 | Link to Comment sof_hannibal
sof_hannibal's picture

You are a man keeping up with the sheeple! The salt of the ponzi...

Thu, 04/05/2012 - 20:44 | Link to Comment hardcleareye
hardcleareye's picture

My Husband reads sheeple news  I read ZH, it's a game to see who picks the news up faster (ZH or Sheeple News), so far I win!!!!  Yes this is what comes after more than 30 years of marriage.... lol

Thu, 04/05/2012 - 22:40 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Eh, par for the course. The vast majority of straight men are dumber than a box of rocks.

Seriously - look at how they live. They're basically the same person as they were when they were 10.

Just big children.

Thu, 04/05/2012 - 23:16 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

Hey... I resemble that remark!!

Fri, 04/06/2012 - 06:58 | Link to Comment magpie
magpie's picture

And persons of a certain orientation emotionally resemble six year old girls ?

Thu, 04/05/2012 - 20:41 | Link to Comment hardcleareye
hardcleareye's picture

Bloomberg picked it up 2 hours ago, just after 6 PM, when did Egan release it?

Friday is a holiday so isn't it normal protcol that this stuff gets releases after hours on friday  (in this case Thursday)?

The boys and gals ar MW are starting the holiday weekend....

Thu, 04/05/2012 - 20:52 | Link to Comment gavroche76
gavroche76's picture

At the opening of the Japanese market, they had a follow up on it right on time. They just ''ignored'' the EJ downgrade so far.

Thu, 04/05/2012 - 20:37 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Thank you Egan-Jones.

A little truth never hurts.

Thu, 04/05/2012 - 20:52 | Link to Comment sof_hannibal
sof_hannibal's picture

Does all this debt make me look fat?

Thu, 04/05/2012 - 21:38 | Link to Comment Frozen IcQb
Frozen IcQb's picture

LMAO

Sun, 04/08/2012 - 11:50 | Link to Comment TheMerryPrankster
TheMerryPrankster's picture

Fat, stupid and either mesmerized or fossilized. Distraction rather than action, American Idol and Internet Porn, a parade of episodic sporting events washing away the space for news, as if there were anyone left to report it or read/watch it.

We are being hoisted upon our own petards and are blissfully unaware. The pain of gutting will be both sudden and brief and survivors few.

The first families have had us since the Federal Reserve and the Income Tax became law, its been a slow boil cooking us by generation every since, they had nothing but time and now they have a siphon draining away our wealth and efforts.

Nothing changes until we make it change.

Thu, 04/05/2012 - 21:27 | Link to Comment yogibear
yogibear's picture

It's about time! How about downgrading it another point! Where Moodys and S&P? Double, triple dare them to Dowgrade US debt again!!

LOL, everyone knows the US is going to stiff it's bondholders! How about 25 cents on the dollar. All the rest is going to be gone!

Those in the US expect much higher oil and food as the debt keeps on rolling over and increasing.

Obama and Ben Bernanke join the PIIGS soon.

Thu, 04/05/2012 - 21:30 | Link to Comment lolmao500
lolmao500's picture

Should be downgraded way below A... what about CCC??

Anyway, what happens if GDP drops 20%??

15620B/12235B = 127.7% debt to GDP

What about 40%??

15620B/9176B = 170.2% debt to GDP

What about 50%?? (experts say it's very possible in the end, GDP will fall by 50%)

15620B/7647B = 204.3% debt to GDP

Yeah it's gonna be quite something to see...

Thu, 04/05/2012 - 21:56 | Link to Comment yogibear
yogibear's picture

Soon the White House will have it's blacked-suited goons visiting Egan, Just like they did with S&P.

It's election time and all the US Government goons will be calling and visiting Egan.

 

Thu, 04/05/2012 - 21:58 | Link to Comment non_anon
non_anon's picture

getting closer to the truth but not quite there yet

Thu, 04/05/2012 - 22:44 | Link to Comment Tsar Pointless
Tsar Pointless's picture

I know the word "default" is thrown around regarding some future event in Amerikkka, but didn't this lousy shithole of a country essentially default back on August 15, 1971, when President Dick Nixon abandoned the gold standard?

Oh, the Muppets. What of the Muppets?!

Thu, 04/05/2012 - 22:58 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture
. . . . . . . . . . . . . . .MORE COWBELL
Thu, 04/05/2012 - 23:39 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

And watch tommorow the S&P downgrades Planet Earth!! Lol! Uhh, Ooops, they already did, nevermind..

 http://blogs.discovermagazine.com/intersection/2011/08/16/sp-downgrades-planet-eart/

Thu, 04/05/2012 - 23:39 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

Double.

Fri, 04/06/2012 - 04:40 | Link to Comment cnhedge
cnhedge's picture

that's why I believe the reason for qe3 is that US can't afford a high interest rate.
http://www.cnhedge.com/
http://www.jinrongbaike.com/

Fri, 04/06/2012 - 07:05 | Link to Comment The Alarmist
The Alarmist's picture

When Egan Jones talks, people .... Wait a minute, Egan who?

In an unrelated story, the offices of Egan Jones were raided by the SEC yesterday in an investigation of allegations of insider trading. SEC sources have not confirmed rumors that child pornography was found on several hard drives of the firm's principals.

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