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Joint Statement By The Fed, The FDIC, NCUA And OCC

Tyler Durden's picture




 

Presenting the joint statement by The Fed, the FDIC, NCUA, OCC. In essence: the Fed tells S&P to go fornicate itself. And for your corresponding pleasure, below are the media contact of note: Federal Reserve Susan Stawick (202) 452-2955;  FDIC David Barr (202) 898-6992; NCUA David Small (703) 518-6336; OCC Bryan Hubbard (202) 874-5307

Full release:

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency

Agencies Issue Guidance on Federal Debt

Earlier today, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations)

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board’s Regulation W, will also be unaffected.


###

Media Contacts:

Federal Reserve Susan Stawick (202) 452-2955
FDIC David Barr (202) 898-6992
NCUA David Small (703) 518-6336
OCC Bryan Hubbard (202) 874-5307

FDIC-PR-133-2011

 

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Fri, 08/05/2011 - 22:20 | 1529176 zorba THE GREEK
zorba THE GREEK's picture

I guess what they are implying is that there is no risk of not getting your money back in treasuries or anything else backed by the good faith of the U.S. government because they have printing press and they will print you up some pronto, no matter how worthless the dollar becomes.

Fri, 08/05/2011 - 22:57 | 1529304 trav7777
trav7777's picture

this really IS the Fed telling SP to fuck off.  There is no force or effect from this downgrade other than SP was making a political statement

Fri, 08/05/2011 - 23:03 | 1529331 Pay Day Today
Pay Day Today's picture

How many grades are there under AA+? Methinks that S&P has more rounds left in the clip. How about Turbo Timmah and the Bernank?

Fri, 08/05/2011 - 23:18 | 1529398 Hulk
Hulk's picture

Its A's all the way to the bottom...where there are B's...

Fri, 08/05/2011 - 23:45 | 1529476 Ahmeexnal
Ahmeexnal's picture

 

 

War is PeaceFreedom is SlaveryIgnorance is Strength, Debt is Money, Bankruptcy is Wealth, Death is Life, God is Satan

 

Sat, 08/06/2011 - 00:53 | 1529661 TBT or not TBT
TBT or not TBT's picture

Fiat is gold, gold is a barbarous relic

Sat, 08/06/2011 - 01:31 | 1529728 Cursive
Cursive's picture

@TBT or not TBT

Time to get long barbarians.

Sat, 08/06/2011 - 16:42 | 1531577 El Viejo
El Viejo's picture

One of the very first taxes imposed by this country was the Whiskey Tax. At that time Whiskey was Money.

Sat, 08/06/2011 - 00:23 | 1529584 caerus
caerus's picture

and turtles...

Sat, 08/06/2011 - 01:04 | 1529683 Hulk
Hulk's picture

Silly!

-Feynman...

Sat, 08/06/2011 - 01:53 | 1529755 caerus
caerus's picture

you no like turtles?

Sat, 08/06/2011 - 01:21 | 1529707 Tidewater
Tidewater's picture

It's not so much lower ratings from S&P -- this downgrade was and is monumental -- as other ratings agencies like Moody's tagging along. Could put weeks' worth of pressure on. Fitch might stay put/certainly won't be first to tag along.

But nardshark. S&P moved the rotten camembert. I'm gonna roll watching Bob Pisani spin this. Can't hardly damn wait.

Sat, 08/06/2011 - 01:39 | 1529737 StychoKiller
StychoKiller's picture

Earlier today, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations)

Our conclusion:  "We still got 2 out of 3 ratings agencies working, and that ain't bad!"

http://www.youtube.com/watch?v=VepS-IyKOLE&feature=related

Sat, 08/06/2011 - 02:22 | 1529789 Mentaliusanything
Mentaliusanything's picture

Not once has it been said..... anywhere .. It HAS NOT BEEN SAID ....get it.... NOT been said !!!!!!!!!

This is the Worlds Reserve Currency !!!!!!

It has been defiled, Fucked, screwed with, lost its Purity, raped, Buggered, slut fested, gang raped, cherry popped, defiled,  debased, royally screwed with, NOT to be Trusted, Not to be tied with, a Whore and a plaything of unclean people.

Oh Baby you are in so Much trouble.

Thanks to ;;

Timmay

To big to fails

Helicopter wanker nankie

Wars

Lobbists (fuck I hate them)

Whats in it for me Congress

Wall st wally wankers.

and a crowd of a thousand hanger on blood sucking Tossers.

Welcome to HELL come Monday.

You are so Fucked!!!!!

 

Sat, 08/06/2011 - 06:39 | 1529968 IBelieveInMagic
IBelieveInMagic's picture

You forgot to include yourself and all of us.

Sat, 08/06/2011 - 09:42 | 1530159 j0nx
j0nx's picture

Amen brother. Things like this could never happen without the consent and apathy of the people. Americans seem to care for naught except for whether or not they can marry their gay lover Raul or what those zany kids on Jersey Shore are up to this week. We will pay dearly for that apathy at some point soon.

Sat, 08/06/2011 - 20:07 | 1531975 ejmoosa
ejmoosa's picture

The good Germans let Hitler come to power.

The German people paid the price.

 

The good Americans have let the government take power.

We AMericans are going to pay the price.

 

 

 

Sat, 08/06/2011 - 20:07 | 1531976 ejmoosa
ejmoosa's picture

The good Germans let Hitler come to power.

The German people paid the price.

 

The good Americans have let the government take power.

We AMericans are going to pay the price.

 

 

 

Fri, 08/05/2011 - 23:05 | 1529337 john39
john39's picture

Sock puppet show. This is all planned.

Fri, 08/05/2011 - 23:25 | 1529425 MM76mm
MM76mm's picture

Planned it is. They will say we restore the AAA rating if you raise taxes.  Raising taxes they will.

Sat, 08/06/2011 - 09:16 | 1530121 Yes_Questions
Yes_Questions's picture

 

 

Right.  And guess where the money is.

I'll give you a hint: it ain't with the shrinking in ranks middle class and cutting SNAP, UE, SSI or Medicare is a non-starter in this political season.

Sat, 08/06/2011 - 09:34 | 1530142 Bobbyrib
Bobbyrib's picture

It will come from the working middle class, or it won't come at all. You can't raise taxes on corporations and the wealthy, the Republicans would never go for that.

Sat, 08/06/2011 - 12:10 | 1530561 -Michelle-
-Michelle-'s picture

You can't raise taxes on corporations and the wealthy because the wealthy are rich enough to exploit loopholes and the corporations pass the taxes on to their customers.  So, yes, it will come from the working middle class any way you look at it.

Sat, 08/06/2011 - 13:16 | 1530883 Mesquite
Mesquite's picture

 I thought Egypt was a profound event...

How appropiate to happen in the cradle of civilization there..

Hmmm. 

Sat, 08/06/2011 - 00:58 | 1529670 diesheepledie
diesheepledie's picture

Yup, Timeigh and the Bernanke are such f'n geniuses. It is all planned with in concert wih Soros and the rest of the Bilderberg. We are mere mortals they are teh genius. Yea ... lol. Timeh!

Fri, 08/05/2011 - 23:05 | 1529340 CrashisOptimistic
CrashisOptimistic's picture

Oh, there most certainly is an effect that can extend past this communication.

Munis are tied to Ts.  THEY may have to downgrade somewhat automatically and a great many of them will then become ineligible for purchase by pension funds and mutual funds.

 

 

Sat, 08/06/2011 - 00:10 | 1529466 Taku
Taku's picture

Full release:

(translation)

Agencies Issue Guidance on Federal Debt

Earlier today, due to temporary insanity, some rogue analysts broke ranks with consensus estimates. With regard to this, listen carefully.

All you need to know is that everything is backed up by your Bernank. As such, there's no risk at all you will not get paid back. No risk. Please continue marking to fantasy. However, if you believe otherwise from this official statement, don't even think about trying to do something about it.

Sat, 08/06/2011 - 00:04 | 1529536 CrankItTo11
CrankItTo11's picture

Flashback: Moody's Will Cut 7,000 Top-Rated Munis if US Downgraded, Reviewing More...

http://www.bloomberg.com/news/2011-07-13/california-may-sell-notes-before-federal-debt-limit-deadline-lockyer-says.html

Sat, 08/06/2011 - 01:29 | 1529723 DeadFred
DeadFred's picture

The Fed may have some say with the banking community this directive this was aimed at but Despite what they may think they are not gods and the US is not the universe. I don't think Europe and China aren't going to kowtow to the Fed's wishes and we already know how little Russia thinks about the Bernank. This will provide the cover for them to do whatever they want in the currency wars and credit it to the downgrade. Monday we will see one way or the other.

Sat, 08/06/2011 - 11:51 | 1530479 msamour
msamour's picture

If the rest of the world corners the United States, I have no problem believing the Unted Stated Elites will start a world war just to keep the pressure off them, and the banking system. Hell I would not be surprised they used nukes. After all the only country in history to ever use nukes is the U.S.

Sat, 08/06/2011 - 01:25 | 1529717 Flakmeister
Flakmeister's picture

It takes 2 of 3... S&P actually covered their ass. Very Machiavellian if I do say.

Fri, 08/05/2011 - 23:13 | 1529379 Sophist Economicus
Sophist Economicus's picture

It was definitely a f-you. But, I think The S&P downgrade is the start of something big.

First, they told Barney frank where he could shove his letter, yup, the gerbils will have some paper to play with now

Second, they are now off the hook for any future liabilities regarding USA debt ratings -- nothing politicians can use to dangle over their head

Three, they've taken a stand against the status quo. I think others will now soon follow. Government intimidation falls apart in the face of large numbers. We might be at the bottom of the rebellion s-curve

Time will tell, but this could be the 'next shot heard round the world'

Fri, 08/05/2011 - 23:33 | 1529449 supersajin
supersajin's picture

all it takes is for a few cracks in the system

Sat, 08/06/2011 - 03:37 | 1529860 Squid-puppets a...
Squid-puppets a-go-go's picture

if im not mistaken, there are hard and fast repercussions - intra-American lending wont acknowledge the premium for the downgrade, but do you reckon china/european entities looking to lend to the US will accept repayment terms that arent reflective of an increased risk?

Sat, 08/06/2011 - 09:55 | 1530191 Winston Smith 2009
Winston Smith 2009's picture

"There is no force or effect from this downgrade other than SP was making a political statement"

As far as US banks and other institutions under direct Fed cartel control, correct.  As far as the rest of the world is concerned, incorrect.

Sat, 08/06/2011 - 21:27 | 1532092 MsCitizen2
MsCitizen2's picture

Exactly right, IMHO.  Just like the Tea Party Congressmembers were making their own "political statement" - - FRESHMEN all!   Nice work, morons.

Sat, 08/06/2011 - 01:20 | 1529704 blunderdog
blunderdog's picture

...but it's worse than that anyway.

The Treasury market can't really run into *serious* trouble until there's competition.

In principle, it's time for the Eurozone to launch it's "Euro-wide" bonds now.  Or China.

There are no other players who'd have even the slightest hope in hell of doing any direct harm.  There's noplace to roll $20 billion to overnight.

Sat, 08/06/2011 - 09:38 | 1530148 max2205
max2205's picture

Dark pool trading is open all weekend with huge blocks sold bought and hedged. Ts may see a pop then drop because all these trades will hit the tape Monday at 3:59:59

Sat, 08/06/2011 - 13:15 | 1530873 ZeroPower
ZeroPower's picture

How fucking stupid are you?

Sat, 08/06/2011 - 01:28 | 1529724 dukeland
dukeland's picture

FED is playing the same game it did during GFC - suspending the Mark-to-Market and replacing it with Mark -to- Nothing. Then we will pretend to be blind and give you full dollars (as worthless as green toilet paper) for these 'no-faith' treasury notes as collaterals.

Why live in real world when the la-la banana land is a paradise!

Sat, 08/06/2011 - 08:41 | 1530073 MarketTruth
MarketTruth's picture

What is the difference between a bankster and a counterfeiter?

 

BTW: Call the FDIC and ask them if they can guarantee the VALUE of your dollars. They will answer "No", as the FDIC only guarantees the dollar quantity, yet not the buying power as obviosly the Federal Reserve Note (dollar) devalues every year.

Sat, 08/06/2011 - 09:54 | 1530188 dehdhed
dehdhed's picture

if prices and rates are bound to fluctuate, it seems the only way to promise no change in risk weights is if they already plan further easing

almost feels like the fed just showed it's hand

Fri, 08/05/2011 - 22:20 | 1529177 silvertrain
silvertrain's picture

Is Turbo Tim going to keep his job still?

Fri, 08/05/2011 - 22:53 | 1529285 Long-John-Silver
Long-John-Silver's picture

 

He's seeking asylum on a Caribbean island with  his off shore bank account tonight.
Fri, 08/05/2011 - 23:31 | 1529440 Milton Waddams
Milton Waddams's picture

From Wikipedia:

"As a Treasury official, he helped manage multiple international crises of the 1990s in Brazil, Mexico, Indonesia, South Korea, and Thailand."

Anyone sensing a trend here? Perhaps he finally bag that big game he has always aspired to?

Stepping in to his private jet, Treasury Secretary Geithner waved his hand to the press corps that had gathered to cover the event. Before finally vanishing into the aircraft, Geithner chuckled to the onlookers "America, we hardly knew ye". No details were released on the the Treasury Secretary's destination nor any details about the trip.

Sat, 08/06/2011 - 10:16 | 1530228 urbanelf
urbanelf's picture

The American taxpayer: the deadliest game of them ALL!!!

Fri, 08/05/2011 - 23:35 | 1529458 MM76mm
MM76mm's picture

Ssaw on CNBC this early morning that the Politicians in Europe were too busy sipping cocktails on the Riveria,  I laughed.  If only they sipped more cocktails on the Riveria and stayed away from their best job of screwing the market up Royally.

Fri, 08/05/2011 - 22:36 | 1529178 tom a taxpayer
tom a taxpayer's picture

No problem, don't listen to downgrade. Just stick finger in ear.

http://cache.abovethelaw.com/uploads/2010/11/Obama-Big-ear.jpeg

Fri, 08/05/2011 - 22:23 | 1529179 SDRII
SDRII's picture

Let them eat iPod.....

Fri, 08/05/2011 - 22:27 | 1529182 MrJingles
MrJingles's picture

Sweep the leg Johnny.....sweep the leg.

Fri, 08/05/2011 - 22:26 | 1529186 cswjr
cswjr's picture

This is all well and good, but it's the insurance companies who'll be facing immediate problems from the downgrade -- not banking organizations.

Sat, 08/06/2011 - 09:36 | 1530146 Bobbyrib
Bobbyrib's picture

Oh, they'll just raise our rates..

Fri, 08/05/2011 - 22:29 | 1529191 Thomas Jefferson
Thomas Jefferson's picture

Ben is going to fire dollars out of his ass due this downgrade.

Fri, 08/05/2011 - 23:06 | 1529344 Spitzer
Spitzer's picture

-Monday morning, debt rally

-Monday morning, stock rally.

Fri, 08/05/2011 - 23:31 | 1529441 MM76mm
MM76mm's picture

Big Ben can fire them out of his arse all he wants as long as his helicopter is positioned right over my house, LOL

Sat, 08/06/2011 - 00:43 | 1529641 Troll Magnet
Troll Magnet's picture

Lloyd Blankfein, is that you?

Fri, 08/05/2011 - 22:29 | 1529192 TwelfthVulture
TwelfthVulture's picture

I think it shows the underlying pathology of the entire system.  Notice that one of the orginators of the memo is the Board of Governors of the Federal Reserve.  And what do they direct:

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board’s Regulation W, will also be unaffected.

So, the purchases of Treasuries and other agency issues under QE1, QE1.5 and QE2 are to be considered as AAA rated on the books of financial institutions. 

Now, consider, what do you think would be the effect on the Federal Reserve's own balance sheet if all those purchases were marked down from AAA to AA+?

Paging, Ron Paul.  Paging, Ron Paul.  Will Ron Paul please pick up the blue courtesy phone located througout the lobby.

Fri, 08/05/2011 - 22:55 | 1529293 Doyle Hargraves
Doyle Hargraves's picture

Congress is conveniently on a 5 week recess when this all goes down, they will be back in town soon to address the BAC takedown though. Hopefully, Dr. Paul will address all this shit since he is chair of monetary policy subcommittee.

Fri, 08/05/2011 - 23:00 | 1529311 Bob Sacamano
Bob Sacamano's picture

The only problem with the 5 week recess is that it is not 5 years.  90% of them are clueless how the real world works. 

Fri, 08/05/2011 - 23:09 | 1529350 Spitzer
Spitzer's picture

Ron Paul is leaving that post to run for prez

Fri, 08/05/2011 - 23:10 | 1529354 Doyle Hargraves
Doyle Hargraves's picture

Yeah the fact they can go on so many recesses justifies even further the need to go back to a part time legislature. But Ron doesn't really fit their mold anyway.

Sat, 08/06/2011 - 08:12 | 1530047 Landrew
Landrew's picture

You do realize they are not on vacation for 5 weeks, they are at home for 5 weeks. They should be home more ofthen in touch with their districts.

Sat, 08/06/2011 - 11:05 | 1530325 Doyle Hargraves
Doyle Hargraves's picture

Well they are on recess, but it just goes to strengthen the argument for a part time legislature so they can become more familiar with their constituents by not having homes,(most all of them have homes there), in dc but in their districts and stay in a hotel when they are in dc. They only visit their districts, home is DC for most of those bastards/bitchez!

Sat, 08/06/2011 - 00:12 | 1529549 XenoFrog
XenoFrog's picture

It's hilarious that last week, the threat of a downgrade was all doom and gloom from these folks, and tonight it has changed to, "Fuck S&P and their ratings we don't care."

Sat, 08/06/2011 - 00:25 | 1529596 caerus
caerus's picture

insolvency is sooooo hot right now...

Sat, 08/06/2011 - 01:38 | 1529734 Cursive
Cursive's picture

@XenoFrog

It's hilarious that last week, the threat of a downgrade was all doom and gloom from these folks, and tonight it has changed to, "Fuck S&P and their ratings we don't care."

Post of the Night.

Sat, 08/06/2011 - 10:20 | 1530240 island
island's picture

Good observation.  +++++

Ionesco = theatre of the absurd.

FIRE economy = reality of the absurd.

 

Sat, 08/06/2011 - 14:15 | 1531190 ElTerco
ElTerco's picture

 

Stages of Grief:

 

  • Denial (this isn't happening to me!)
  • Anger (why is this happening to me?)
  • Bargaining (I promise I'll be a better person if...)
  • Depression (I don't care anymore)
  • Acceptance (I'm ready for whatever comes)

 

Sat, 08/06/2011 - 14:22 | 1531224 ElTerco
ElTerco's picture

 

Stages of Denial:

Stage one denial is when a person truly does not believe that they have the disease of chemical addiction.

Stage two denial is when a person denies the need for ongoing sobriety support after treatment is completed. 

Stage three denial is the denial of the need to be willing to go to any length in the recovery process. 

Fri, 08/05/2011 - 22:30 | 1529194 PaperBugsBurn
PaperBugsBurn's picture

 

 

 

 

THE KKK EMPIRE IS GOING DOWN, BITCHEZ!!

 

ZOMBIE LAND HERE WE COME!!!

Fri, 08/05/2011 - 22:31 | 1529195 Tejano
Tejano's picture

A fiat AAA rating. How cool is that?

Fri, 08/05/2011 - 23:28 | 1529431 MM76mm
MM76mm's picture

How cool would it be to pay your bills with money printed out of your printer?

Fri, 08/05/2011 - 22:33 | 1529199 Long-John-Silver
Long-John-Silver's picture

Sure! We will give you back your money in US Dollars when the Bonds mature. Ben Bernanke has designed a new Bill just for Bond redemption’s.

http://www.milliondollarbillshop.com/libert17a.jpg

 

Sat, 08/06/2011 - 01:45 | 1529742 StychoKiller
StychoKiller's picture

Who's on the front of that note, "Homey the Clown?"

Fri, 08/05/2011 - 22:30 | 1529200 Chasecran
Chasecran's picture

Bonkers. Printing AAA takes more ink anyway. Efficiency is key in printing stuff on paper.

Fri, 08/05/2011 - 22:30 | 1529201 Chasecran
Chasecran's picture

Bonkers. Printing AAA takes more ink anyway. Efficiency is key in printing stuff on paper.

Fri, 08/05/2011 - 22:35 | 1529214 Long-John-Silver
Long-John-Silver's picture

AAA = 01000001 01000001 01000001

AA = 01000001 01000001

Fri, 08/05/2011 - 23:10 | 1529357 snowball777
snowball777's picture

AA+ == 0x41 0x41 0x2b

Sat, 08/06/2011 - 00:00 | 1529520 Yen Cross
Yen Cross's picture

  I miss that old login " 777"  I mis you telling us about you're family.   we care about you.

Fri, 08/05/2011 - 22:34 | 1529204 PaperBugsBurn
PaperBugsBurn's picture

 

 

 

 

THE KKK EMPIRE IS GOING DOWN, BITCHEZ!!

 

ZOMBIE LAND HERE WE COME!!!

Fri, 08/05/2011 - 22:33 | 1529207 Rodent Freikorps
Rodent Freikorps's picture

Lies, damned lies, and Obama Administration lies.

The most honest administration, evarrrr.

Lying commie shitbags.

Fri, 08/05/2011 - 22:46 | 1529263 kridkrid
kridkrid's picture

Finance fascism has no party alligience.  Making it about Obama is a red herring.

Sat, 08/06/2011 - 02:22 | 1529791 firefighter302
firefighter302's picture

It's all about Obama.

Fri, 08/05/2011 - 22:50 | 1529273 PaperBugsBurn
PaperBugsBurn's picture

As if that redneck mccain would have been any different... lmao

 

 

Fri, 08/05/2011 - 22:53 | 1529291 Rodent Freikorps
Rodent Freikorps's picture

When did I claim McCain isn't a lying commie shitbag?

The only difference is McCain lies about being a commie.

He actually revels in openly being a traitor shitbag to anyone stupid enough to trust him.

Fri, 08/05/2011 - 23:13 | 1529380 snowball777
snowball777's picture

Another "if it ain't Ron (can't win, but runs anyway collecting dollars the whole time) Paul, it's commie" krishna!

Ronnie Paulie Paulie Krishna Krishna Paulie Paulie Ronnie...

Sat, 08/06/2011 - 00:23 | 1529552 tickhound
tickhound's picture

That reminds me... Where's Dennis been?  We know Grayson's toast, there's Dennis... Where's the Fed bashing Bush-Doctrine hating progressives when you need these bitchez?  I'll throw 'em a few bucks.  All things considered, we're getting off cheap with Ron and these guys.  The truth alone is worth...

+1 in spirit cuz deep down you know you were harsh, and may have had a cocktail or two.

Sat, 08/06/2011 - 11:06 | 1530327 Raphio
Raphio's picture

I say Paul/Kucinich (Kucinich/Paul?)  2012 - for the new Progressive Libertarian Alliance

Sat, 08/06/2011 - 13:15 | 1530875 Cathartes Aura
Cathartes Aura's picture

you guys are funny - do you really believe that individuals affect this behemoth?  that if you choose a different flavour, you get a different outcome? 

still??

the system, the structure, the whole top heavy mirage of a nationstate is what needs to be seen as broken, false, finished - not the fucking figureheads.

it's over, it's been over for years, now it just has to die. . . in your minds.

Sat, 08/06/2011 - 19:05 | 1531881 Inibo E. Exibo
Inibo E. Exibo's picture

From all these indignities, such as the very beasts of the field would not endure, you can deliver yourselves if you try, not by taking action, but merely by willing to be free. Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces. ~Étienne de La Boétie

Fri, 08/05/2011 - 22:36 | 1529209 YesWeKahn
YesWeKahn's picture

The FEd is funny. It prints free money to buy treasuries. Now the interest rate is going through the roof, they should be super happy, why complain?

Fri, 08/05/2011 - 22:44 | 1529248 malikai
malikai's picture

You'll understand it all a little better when nominal rates are > 10%, unemployment is at 20%(50%), and the CPI is cruising along at 10%(40%).

Sat, 08/06/2011 - 00:56 | 1529667 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

you forgot to add the consumer confidence index sinking down under 53%, the new low of lows from our already low of 53.6 from 2007-2009 on average.

"The Latest Conference Board Consumer Confidence Index was released this morning based on data collected through July 14th. The 59.5 reading is better than the consensus estimate of 56.0, reported by Briefing.com, and a improvement from the June downward revision to 57.6 (from 58.5). "  -  Doug Short 7/26/11

note the date, a lot's happened since then and as you say, we'll all get to understand it a better.

Stack, Load, Guard, Rinse, Repeat

this is going to be epic ! ! !

Fri, 08/05/2011 - 22:34 | 1529210 economessed
economessed's picture

I'm mailing soft red clown noses to each of their offices right now.  One size fits all.

Sat, 08/06/2011 - 12:17 | 1530586 -Michelle-
-Michelle-'s picture

Terrorist!

Fri, 08/05/2011 - 22:37 | 1529212 ApeMilesHigh
ApeMilesHigh's picture

So where do we see the the dollar come Sunday night ,Monday morning?

Signifcant Drop?

Precious metals initially down , but up by end of week?

DJIA down a 1000 points on the week?

Fri, 08/05/2011 - 23:34 | 1529452 mayhem_korner
mayhem_korner's picture

Food for thought:

I think it's more meaningful if the market DOESN'T respond a whole lot, because that means that it's already been priced in. 

I would watch, among other things, whether the Indo-Asian PM buying ratchets up on Monday morning, and whether the flight from Euro buys down a big chunk of the nominal yield uptick on USTs or migrates elsewhere.

Sat, 08/06/2011 - 00:14 | 1529556 Threeggg
Threeggg's picture

After what happened today are we to believe "anything" as far as market response ?

Go long printing presses

Sat, 08/06/2011 - 08:21 | 1530057 Landrew
Landrew's picture

I was expecting something had happened after trading all day. The news was out to a select few. You could see the shock and response. I would guess now Q3 has now been baked in. We might see a flat trading period now until the CON gang of 12 meet.

Sat, 08/06/2011 - 01:05 | 1529685 teolawki
teolawki's picture

Think contrarian. Remember, the USD isn't the only fiat on the shitheap.

Fri, 08/05/2011 - 22:35 | 1529216 brokesville
brokesville's picture

oh crap, nobody runs bartertown, hey timmy break a deal face the wheel

Fri, 08/05/2011 - 23:13 | 1529377 CrashisOptimistic
CrashisOptimistic's picture

BREAK A DEAL, FACE THE WHEEL

Sat, 08/06/2011 - 01:06 | 1529688 TBT or not TBT
TBT or not TBT's picture

Timmaaay in S&M gear, thanks for that.

Fri, 08/05/2011 - 22:38 | 1529221 FidelityBoy
FidelityBoy's picture

Since the DOLLAR has inevitably to go down from this downgrade, what further impact would QE3 have?  Tyler?

Fri, 08/05/2011 - 23:02 | 1529235 tickhound
tickhound's picture

I'm no Tyler but I'm goin' with further down. 

...the dollar did gain (vs fiat) following the April outlook downgrade, however.  You never know with the bs these boys fling

Fri, 08/05/2011 - 22:37 | 1529226 lolmao500
lolmao500's picture

Obama's reaction when he heard the downgrade decision probably looked like that...

http://www.youtube.com/watch?v=bSbKXQAhpZA

Fri, 08/05/2011 - 22:40 | 1529227 At120
At120's picture

No suprise.  A statement along these lines is necessary in order to prevent funds from liquidating treasuries due to covenant restrictions.

 

 

Fri, 08/05/2011 - 23:14 | 1529385 CrashisOptimistic
CrashisOptimistic's picture

Correct, but there are ripples.

Munis are tied.  There will be an avalanche of liquidations from pension funds and mutual funds who are not allowed to hold munis below various grades.

This is serious stuff.

Sat, 08/06/2011 - 00:51 | 1529653 RockyRacoon
RockyRacoon's picture

I'll be promptly corrected if I'm wrong -- this is Fight Club after all.   But, I believe it takes more than one ratings agency to effect a dumping of Ts due to the down grade.

Sat, 08/06/2011 - 07:47 | 1530017 buzzsaw99
buzzsaw99's picture

if usa treasuries aren't aaa nothing is. not everyone will be able to hide in swiss francs. we're gonna need a bigger mattress.

Sat, 08/06/2011 - 08:23 | 1530061 Landrew
Landrew's picture

Liquidation to what? Oh I will move a billion to Euros, Pounds, Peso, Oil, Corn, Gold? Right, there is nothing to move to. Other countries are in worse shape then we are. Oh, maybe they move to China, right. I wouldn't even move my money to China unless I went with it.

Sat, 08/06/2011 - 09:46 | 1530171 Bobbyrib
Bobbyrib's picture

How can you not trust the Chinese? When they say they have not been involved in hacking into our national defense systems I believe them.

Fri, 08/05/2011 - 22:40 | 1529228 token
token's picture

Turbo Tim is going down on Tuesday.  I just read it in my fortune cookie!

Fri, 08/05/2011 - 22:42 | 1529236 snowball777
snowball777's picture

On whom?

Fri, 08/05/2011 - 22:55 | 1529243 token
token's picture

Big Ben and the twins?  I mean, little Ben and the twins. 

Fri, 08/05/2011 - 22:50 | 1529272 XitSam
XitSam's picture

I've heard that you should always add "in bed" to the end of any fortune cookie.

Turbo Tim is going down on Tuesday in bed.

Fri, 08/05/2011 - 22:41 | 1529234 snowball777
snowball777's picture

Dear S&P,

Blah blah blah. We can't hear you.

Sincerely,

The Fed

Fri, 08/05/2011 - 22:42 | 1529246 Jim in MN
Jim in MN's picture

PS We fart in your general direction.

Sat, 08/06/2011 - 00:52 | 1529655 snowball777
snowball777's picture

I told him we already got one!

Ficher le vache!

Sat, 08/06/2011 - 01:01 | 1529677 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

ah yes, it's a very nice......

Sat, 08/06/2011 - 06:55 | 1529980 g
g's picture

Great Monty Python reference!

Sat, 08/06/2011 - 00:52 | 1529657 RockyRacoon
RockyRacoon's picture

In your enthusiasm, beware the deadly shart!

Fri, 08/05/2011 - 22:43 | 1529239 flaunt
flaunt's picture

And just like that, problem solved.  Man this central planning stuff is easy.

Fri, 08/05/2011 - 22:43 | 1529241 Global Hunter
Global Hunter's picture

So what happens if a small or medium sized regional bank agrees with S&P or a brokerage, does Obama get Holder and Janet what's his name to visit?

Sat, 08/06/2011 - 00:53 | 1529659 snowball777
snowball777's picture

Worse: the IRS.

Fri, 08/05/2011 - 22:45 | 1529247 Doyle Hargraves
Doyle Hargraves's picture

All this so early in the weekend and the takedown of BAC still hasn't happened. Think Sunday 3PM EST, futures goto hell, Asia crashes, QE3 goes into full effect...

Sat, 08/06/2011 - 00:56 | 1529666 snowball777
snowball777's picture

There's still time to set base charges at Jacks Em Whole.

Sat, 08/06/2011 - 07:51 | 1530021 buzzsaw99
buzzsaw99's picture

put neil bush in charge of security

Fri, 08/05/2011 - 22:49 | 1529249 Village Idiot
Village Idiot's picture

Why wasnt NOAA consulted. We may need an ark.

Sat, 08/06/2011 - 00:55 | 1529663 snowball777
snowball777's picture

C'mon man...they're in charge of global warming...not global printing.

Sat, 08/06/2011 - 01:10 | 1529691 TBT or not TBT
TBT or not TBT's picture

The ATF should be up in arms too.

Fri, 08/05/2011 - 22:47 | 1529256 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

Historic moment...fog is lifting...ugly face of reality dead ahead.

A bit shocked...knew it was coming but when its out of the shadows...sobering

Sat, 08/06/2011 - 01:29 | 1529722 MsCreant
MsCreant's picture

I wish it were so, but unless I have heard "wolf" too often, I just don't think so, just yet.

Sat, 08/06/2011 - 01:46 | 1529743 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

Wasnt saying the end is near but some reality is here.  Heard a good one: US economy is like an elephant=takes a lot to bring it down.  And; an old pro thinks the $ could take 20 years to die. 

My Chinese friend gave me the Asian view:

1. All China has is pieces of UST paper.  US govt could void those any time.

2. US Military is an 800 megaton gorilla; top of the pyramid.

From the outside lookin in, we have a mere flesh wound.  From the inside lookin out, two arms have been sliced off!

Sat, 08/06/2011 - 02:18 | 1529788 MsCreant
MsCreant's picture

I'll give you this, more folks are waking up. I have agreed to do a business deal with someone in PMs if needed. Guy does not read ZH but he would fit in well here.

I guess a giant takes longer to fall, so the drama before the fall will be be bigger (and in slow mo).

If you are used to always getting your way, then it hurts more when you don't, you don't have the experience to cope with it in sane ways.

We are a giant spoiled baby. The world is in for it when we do finally collapse.

One commentator has a book out called "The Long Emergency." He probably has it about right.

Fri, 08/05/2011 - 22:53 | 1529277 Number 156
Number 156's picture

Its the end of the S&P. It made political enemies that are well vested into and part of the financial ponzi system in the US.

Since they are already acting out of desperation to save themselves, they will attempt to discredit and destroy S&P.

Fri, 08/05/2011 - 23:21 | 1529407 Bob Sacamano
Bob Sacamano's picture

Maybe.  But investors (who care about money) may see S&P as one of the more credible raters due to this brief moment of candor. 

Also, about two years ago their CEO publicly came out asking that rating requirements be eliminated from all federal regulations (which would run contrary to their monopolistic revenue stream) -- suggesting that they should live off of whatever the market pays them for good credit evaluations (not rules requiring ratings).

So while I am no fan of the rating agencies (have directly dealt with them all), these actions improve S&P's standing with me -- and maybe others who are in the capital markets.  An enemy of the federal government, may very likely be a friend to capital.

Sat, 08/06/2011 - 10:00 | 1530206 Bobbyrib
Bobbyrib's picture

S&P is shit. They still rated the CDO's as AAA. If they want business from the banks, they need to overrate their WMD's. If I had a business and was at the top of my industry, I would probably want to get rid of all the costly regulations that govern my industry too. Fuck S&P.

Fri, 08/05/2011 - 22:53 | 1529280 RobotTrader
RobotTrader's picture

 

 

Might want to check the interest rates on AA+ rated corporate bonds vs. AAA rated.

Probably a 5 b.p. difference.

And how does AA-rated Japan get the luck of having 1.0% interest rates on 10-yr. JGB's???

http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/

Fri, 08/05/2011 - 23:13 | 1529375 Spitzer
Spitzer's picture

By having a 20% savings rate.

Hell, I agree anyway. Treasuries and the US dollar will rally on monday.

Fri, 08/05/2011 - 23:17 | 1529388 Rynak
Rynak's picture

And how does AA-rated Japan get the luck of having 1.0% interest rates on 10-yr. JGB's???

Interest rates are meaningless, if the only one who bothers borrowing to you, is you yourself.

US bonds == worth less then shit (hey, you can at least raise crops with shit)

EU bonds == same

japan bonds == same

Lending to anyone who will just inflate it away == uh, do we see a pattern here?

 

But of course, you knew that already robomoron, you were just spewing "buy less than shit, it's great!"-propaganda. By the way, who are your employers anyways? I'd suspect GS, but i'm not sure about that.

Sat, 08/06/2011 - 00:07 | 1529534 kito
kito's picture

Robo, do your charts tell you that this is the country that holds the world's reserve currency? And because of that the downgrade is a watershed moment in the history of world monetary policy??

Sat, 08/06/2011 - 20:29 | 1532013 malikai
malikai's picture

Didn't you hear? Robo has been reduced to using Tarot charts these days.

Fri, 08/05/2011 - 22:53 | 1529282 Mr Sir
Mr Sir's picture

France is AAA? France?? Really? Doesn't matter, give the equity junkies their QE man.

Sat, 08/06/2011 - 00:00 | 1529503 Rynak
Rynak's picture

ratings no longer are about what is "good" but more about the "least shortterm evil"...... are you gonna blow up later than the rest? Then you're "good"!

Phrased differently: Transpose all ratings downwards by 3, and you get an average rating of "how soon they'll implode".

What else do you expect anyways, in a global financial system, where constant debt increase is a given, and the only difference is "how much" and "how long until it will be defaulted on", under the assumption that you are a lender, playing russian roulette on who is least probable to shoot himself in the head, during the timespan when you're holding said bonds?

Sat, 08/06/2011 - 01:12 | 1529692 TBT or not TBT
TBT or not TBT's picture

France'll default first.

Sat, 08/06/2011 - 01:38 | 1529735 blunderdog
blunderdog's picture

The Eurozone just "centralized" their shit.  Germany'll lend France the interest rates, just like it's gonna for Greece.  120% GDP in debt's no big deal if the rates are 1%, right?

Even knowing how prevalent the bullshit is, Europe has more gold than the US.

Sat, 08/06/2011 - 06:58 | 1529982 g
g's picture

You must mean tungsten.

Sat, 08/06/2011 - 10:03 | 1530212 Bobbyrib
Bobbyrib's picture

Combined, but do you think they would pool it together to save the EU? I'm guess France and Germany would not.

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