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Moody's Chief Economist Says Proposed Deal Will Avoid US Downgrade

Tyler Durden's picture


And there you have it. Mark Zandi, better known for predicting at least 18 occurrences of a US recovery in the past 4 quarters, and being as wrong on the shape of the US growth curve as everyone else on Wall Street (although being Moody's head economist that is a perfectly normal track record), just told CNN's State of the Union that the deal is substantive enough to where Moody's will not move to downgrade the US' AAA rating. Naturally, the fact that this is merely another massive can kicking exercise which will see the US debt ceiling raised by $3 trillion with actual cumulative cuts of about $100 billion tops by November 2012 at which point yet another debt ceiling hike will have to be planned is irrelevant. All that matters is to get the S&P back to the year's highs, 120% debt/GDP (same as Greece) be damned.

From Politico:

Former Moody's top economist Mark Zandi says he's quite "excited" by the framework of a debt ceiling deal being discussed on the Sunday shows -- and believes the certainty of substantive deal will lift markets and head-off a downgrade from AAA.


"I'm not in the rating agency... but listening to what they have to say, I think this would be sufficient... but this is substantive and should avoid a big downgrade," said Zandi, adding that some agencies "may go down a different path."


"If the deal collapses, look out, he warned. "If there is any misstep here it will likely undermine confidence and we will likely slip into recession...the economy literally hangs in the balance," Zandi told CNN's "State of the Union."


But if the deal hangs together - a big if, considering the likely opposition of tea partiers -- it's "great news and that gets us very close to fiscal sustainability -- I'm very excited."

Being the apparatchik that he is, and that would fit perfectly in any centrally planned bureaucracy as a D-grade sycophant, he also had the following to add: "The bicameral, bipartisan committee "is a positive step" that will give markets a real sense of certainty on future deficit reduction."

Ah yes, let's leave the future of our country to a "bipartisan committee" whose determinations will be completely ignored when the time comes. Any why not: Obama will have a carte blanche to continue on his present course for another $3 trillion worth of debt.


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Sun, 07/31/2011 - 10:16 | 1509544 bigwavedave
bigwavedave's picture

Another year to buy the PM's at hopefully lower prices....

Sun, 07/31/2011 - 10:23 | 1509551 TheFourthStooge-ing
TheFourthStooge-ing's picture

Another year to buy the PM's at hopefully lower prices....

No need to do that. Mark Zandi has also just predicted that flying unicorns will land in my back yard and crap out a pile of 24 karat gold nuggets.


Sun, 07/31/2011 - 10:57 | 1509638 anynonmous
anynonmous's picture

You are being far too hard on Dr. Z, all he's doing is putting his mouth where his money is or trying to make up for supporting Palin


Sun, 07/31/2011 - 19:29 | 1510801 samslaught
samslaught's picture

Let me get this straight.  The United States can just arbitrarily vote themselves a higher debt limit with no restrictions, then when they sell thier bonds on the open market if nobody wants to buy them the FED just buys up as many as we need them to with no restrictions.  Are you telling me their is an actual agency spending time, effort, reports, analysis, ect. rating whether or not we can pay back this debt.  Is this a joke?  It's honestly the equivalent of rating whether or not the bank will pay you $200 for passing go in monopoly.  In fact it may be more work to get hasbro to print more monopoly dollars than it would be to get the FED to print dollars.

Dollars have no value.  They are actually debt instuments backed by no collateral.  Our debts are denominated in dollars.  This means our creditors hold nothing of actual value.  To print more dollars and pay our debts monthly is not just cheap, it's free.  If we had to back our dollars with something there might be a risk of default on our dollar based debts.  However since dollars are backed by nothing the risk of the United States not printing more funny money every month and sending it to our debtors is zero.

The United States defaulted in 1971.  We promised to exchange our dollars with gold if anyone asked.  Then when it came time to pay up we refused.  We still had some gold too so it was a strategic default.  Wonder if Moody's predicted that one.


Sun, 07/31/2011 - 23:25 | 1511448 All Risk No Reward
All Risk No Reward's picture

>>They are actually debt instuments backed by no collateral. <<

That's where you are mistaken.  The collateral is the ability to extract wealth from American citizens.

Sure. they haven't pulled that care, YET, but they will.  Just ask the Greeks, the Irish, the Spaniards, the Italians, Latin America and the Third World.  We're simply getting a pass for now, but that will end one day.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.”

~Henry Ford

Mon, 08/01/2011 - 00:14 | 1511529 samslaught
samslaught's picture

I agree with you in theory on that point although it's a scam and the Greeks, spaniards, ect. should not fall for it. I believe the Americans won't. The Irish people are putting up quiet a fight. In the end I hope through the power of information the Americans give the banisters the middle finger.

As I have said in other posts their isn't enough money in the world to pay back the central banks with interest. Therefore the banks take our assets slowly like a sick game of musical chairs. Interest on debt based fiat currency = assets. The game is over when they have all the assets.

Sat, 05/12/2012 - 21:13 | 2420493 All Risk No Reward
All Risk No Reward's picture

I am fighting day and night to try and make your belief that Americans won't "fall for it" become reality.

However, we need mroe people hyperfocused on this point because the captured, collaborator media won't ever tell the people the truth.

The central banker box is a fraud and we have to GET OUT of it before we have a chance to prosper as a nation (and I don't just mean material chit).

Sun, 07/31/2011 - 11:53 | 1509794 Dr Bob
Dr Bob's picture

Where can i get me one of those unicorns?

Sun, 07/31/2011 - 12:20 | 1509857 WmMcK
WmMcK's picture

More skittles, bitchez.

Sun, 07/31/2011 - 12:39 | 1509909 StormShadow
StormShadow's picture

ROTFL! It's pretty clear this guy Zandi drinks banker Kool-Aid

Sun, 07/31/2011 - 10:25 | 1509559 Diatribe
Diatribe's picture

Agree.  You can never have too many Prime Ministers in your back pocket.

Sun, 07/31/2011 - 11:27 | 1509716 hunglow
hunglow's picture

R those real.

Sun, 07/31/2011 - 11:30 | 1509724 Husk-Erzulie
Husk-Erzulie's picture

Or animated boobie GIFs neither.  That's it then...gonna get me one :-)

Sun, 07/31/2011 - 13:01 | 1509965 Husk-Erzulie
Husk-Erzulie's picture

Hee hee

Sun, 07/31/2011 - 10:41 | 1509610 Sudden Debt
Sudden Debt's picture

Maybe another few months but PM's will rise. Gold is at it's current top now but silver will go to 45 by years end.

But that would only be the case if no QE3 would be launched this year because if a QE3 is launched you can add another 20 to 25% to those prices.


Sun, 07/31/2011 - 11:08 | 1509672 scatterbrains
scatterbrains's picture

Look at what all that arm flapping is doing to Diatribe's titties.. that's some wind your kicking up there SD or is she just ticklish?

Sun, 07/31/2011 - 10:53 | 1509637 So Close
So Close's picture

This should drive PM's higher.  (Perhaps not short term.)  And the dollar lower.   Bullish for money printers, inflation and  Pm's.  Bearish for the return of real GDP growth driven by either productivivty gains or more more goods being produced.   This will stretch the rubberband tighter faster.  The dollar will loose it place as the reserve currency faster, the bond vigalentes will appear sooner, and we are at increased risk of worse inflation.

Sun, 07/31/2011 - 11:19 | 1509700 Caviar Emptor
Caviar Emptor's picture

The Gold (PM) secular bull market is in its early stages, and stretches for as far as the eye can see. Nothing has changed in that regard. Everything they do only confirms it. 

Sun, 07/31/2011 - 12:21 | 1509862 Threeggg
Threeggg's picture

I agree but the MSM has been forecasting a "crash" for weeks now !

PSY-OP for a paper Blizzard to drop PM's to cover all the short's ?

Can you imagine the paper Gold/Silver that has been printed to try and keep PM's down during this joke of a debt deal ? The barrons must cover.

question is who will fall for it ?


Sun, 07/31/2011 - 11:12 | 1509677 docj
docj's picture

Yep. Another year of can-kicking to get my and my family's house in order.

At best.

Sun, 07/31/2011 - 11:28 | 1509718 Mike2756
Mike2756's picture

They're going to have to get another can, 20 years of kicking has demolished the old one.

Sun, 07/31/2011 - 10:21 | 1509546 KickIce
KickIce's picture

It's a miracle, it's almost like the Fed and Central Banks (one in the same really) are orchestrating this show.

As a matter of fact, they should introduce a 4A rating just for us.

Sun, 07/31/2011 - 10:50 | 1509631 Sudden Debt
Sudden Debt's picture

In my life, I have only stayed in a 5 star hotel suite 3 times.

once in Bangkok

once in Rome

once in Dubai

In Bangkok, the suite was like a house and it was really fantastic. Servants for everything, everything was top quality and only the best of everything.

In Rome, the hotel was a castle in the center of Rome, service sucked and the interior which was nice was not 5 star hotel like. The food sucked.

In Dubai, they went over each level and when you thouth it couldn't get any better, there was always an extra service available to even raise the bar even more.

Stars for hotels are not the same in every country. The owner pretty much decides what to put on it and the number depends more on the charges they'll ask you.

This is the same for ratings. Countries these days seem to be able to decide how much the will give you as interest on their bonds. They decide the rating and if you don't like it you can take your business elsewhere.


Sun, 07/31/2011 - 10:19 | 1509548 Captain Benny
Captain Benny's picture

Let the global markets do the downgrading.  The US-based ratings agencies can't seem to do their job, so once again like in 2008 the market will step in to bitch slap the economy.  This guy is probably a paid shill for the Treasury or some other part of the executive branch.  The more he talks and gets media attention, the more ratings agencies feel compelled to make statements in agreement.  The ratings agencies have no backbones and they just try to go with the consensus, but in this case their "consensus" is not market participants, but instead government affiliated idiots.

Sun, 07/31/2011 - 11:13 | 1509681 wisefool
wisefool's picture

The Bob Dole method of political branding, comes from the Tip O'Neil era. It was hillarious when that tea party congressman got on the MSNBC Chris Mathews (a former O'Neil Aid, and now the head of thier politcal reporting/progaganda machine)  The congressman started and ended every phrase with "Chris, Chris, Chris" It drove mathews nuts cause he knew that exactly what the MSM was doing to the tea party and this congressman was doing it right back to his geriatric generation of pundits and politicians running around now.



Ratings agencies. Compromise. Future. Ratings agency. Tea party bad. protecting seniors. ratings agencies. grown ups work in the senate. ratings agencies.Moody's. Standard and poors. Obama is reaganesque. Ratings agencies. Senatro Reid. Ratings agencies. Tea baggers are bad. John McCain thinks the tea party are a bunch of hobbits. John McCain is a Patriot. John McCain reads the super important things the ratings agencies say. John McCain is a freind of Bob Dole. Bob Dole is a senator. Ratings agencies are smarter than tea partiers. ratings agencies. Chris Mathews worked for Tip O'Neil. Tip O'neil and Bob Dole have a ratnigs agency called the Bob Dole and Tip O'neil ratings agency. And they don't let tea partiers read the ratings agency reports, especially the ones from pre-2008,

The only thing that matters is thay have to drown out the secret truth that the tax code is how all these politicians get thier rocks off. And the tea party is trying to put them all in tax code central planning rehab. They do not want to go.  So they go to the local ratings agency for another hit.

Sun, 07/31/2011 - 14:16 | 1510124 Ramboy
Ramboy's picture

There are nations with a lower AA rating which have lower interest rates than the US.  The AAA is just a symbolic hegemony.

Sun, 07/31/2011 - 10:22 | 1509550 sunnydays
sunnydays's picture

Amazing if all of us had that ability to just say: I can't afford my mortgage, food, fuel or anything else so the bank gives me a couple of hundred million so I can just blow it on boats, planes and things I absolutely don't need, besides cruises around the world.  Oh my 20 million dollar house too will now get the mortgage paid.  


Yeah, if we could all just get the money give aways that the govt is and will give to the banks. 

Did anyone really doubt there would be a ceiling hike for the banks?  What a game they have all played.  Makes you wonder what was going on that this whole drama purposely made us miss. 

Sun, 07/31/2011 - 10:36 | 1509594 TheFourthStooge-ing
TheFourthStooge-ing's picture

Yeah, if we could all just get the money give aways that the govt is and will give to the banks.

Hey, I know: replace the tax deduction for mortgage interest with a tax deduction for mortgage principal. Even better, allow everyone to print all the legal tender currency they want, just like the banks do.

Did anyone really doubt there would be a ceiling hike for the banks?  What a game they have all played.  Makes you wonder what was going on that this whole drama purposely made us miss.

Whatever the whole debt ceiling charade was supposed to distract us from will no doubt necessitate another episode of debt ceiling matinee by the K-Steet Community Theater within six months.


Sun, 07/31/2011 - 10:23 | 1509552 Diatribe
Sun, 07/31/2011 - 10:49 | 1509630 disabledvet
disabledvet's picture

it is important to have the right theater as well. here's mine:

Sun, 07/31/2011 - 10:23 | 1509553 Conrad Murray
Conrad Murray's picture

To arms.

Sun, 07/31/2011 - 10:29 | 1509567 Crisismode
Crisismode's picture

To legs.


As in just walk away from this whole media circus, this whole artificial construct that the MSM breathlessly regurgitates for mass consumption.

Sun, 07/31/2011 - 10:24 | 1509558 sqz
sqz's picture

Speculation about what constitutes a future default is one thing, even to the point where you can argue the US will never technically default, but downgrade in credit quality at this point in time must surely be inevitable if US is treated like any other sovereign. At least that's what every other rating agency seems to have recognised ... What is going on at Moody's?

The lack of transparency with these rating agencies, which hold hostage the world's entire financial system and therefore the world by the balls, is really astonishing!

Sun, 07/31/2011 - 11:27 | 1509714 Caviar Emptor
Caviar Emptor's picture

The rating agencies have succeeded in downgrading themselves. This year, so soon after 2008, was the game changer. Capricious and contradictory ratings have succeeded in creating anger and loss of confidence. Now China and Europe have backed their own rating agencies in retaliation, thus obscuring the focus and diluting the brands. Look for further warfare and scandals. Their best days are now way behind them. Their future is increasingly uncertain

Sun, 07/31/2011 - 10:25 | 1509560 Pay Day Today
Pay Day Today's picture

So is this guy Zandi Moody's chief economist...or Moody's former chief economist?

Sun, 07/31/2011 - 10:26 | 1509561 What a mess_man
What a mess_man's picture

Here we go. Get ready for the economic "recovery parade" to be rolling once again tomorrow morning. Preparations are going just as planned...

Sun, 07/31/2011 - 10:26 | 1509562 What a mess_man
What a mess_man's picture

Here we go. Get ready for the economic "recovery parade" to be rolling once again tomorrow morning. Preparations are going just as planned...

Sun, 07/31/2011 - 10:27 | 1509564 PulauHantu29
PulauHantu29's picture

I don't trust Moddy's and S%P anymore after they rated the Subprime Garbage triple AAA. It's better for an investor to read the solid fincial blogers.

Sun, 07/31/2011 - 10:28 | 1509565 lizzy36
lizzy36's picture

Ahhhh leave it up to Zandi, to still be trying out for head economic cheerleader of the US:Treasury Secretary.

Now, there is no plan, there is some broad framework. With about 1/4 of the revenue cuts that S&P was looking for.

And this is good enough?

Moody's is awesome. On friday they did say they didn't care what the deal for the deficit looked like, they only cared that the debt ceiling was lifited. This was the only thing NECESSARY for US to avoid downgrade.

And that they would only downgrade after the US defaults.

And exactly what purpose does Moody's serve again?  Bueller....Bueller.

In other news LEH and Enron have both been downgraded today.

Sun, 07/31/2011 - 10:32 | 1509573 cswjr
cswjr's picture

Don't forget that for Moody's only failure to pay interest/principal constitutes default.

Sun, 07/31/2011 - 10:38 | 1509601 GeneMarchbanks
GeneMarchbanks's picture

'And exactly what purpose does Moody's serve again?  Bueller....Bueller.'

To perpetuate the Status Quo. Moody's: We are here to make sure you don't break the economic suicide pact. Cultish. Remember they are objective. Like, for example, let's downgrade places where we don't live and when it comes to rating our own shit we'll slap a triple AAA on it. All with a little theater to make sure the outcome looked uncertain. Wheww! That was close.



Sun, 07/31/2011 - 11:01 | 1509659 disabledvet
disabledvet's picture

Did someone say Bueller?
ruined my life too, actually.

Sun, 07/31/2011 - 10:30 | 1509569 mynhair
mynhair's picture

The TASE sure wet the bed today.  Must be the 'wet blanket' syndrome.

Sun, 07/31/2011 - 10:30 | 1509570 RobotTrader
RobotTrader's picture

<--Mark Zandi yet again attains "Rock Star" status

<--Diane "Lip Gloss" Swonk nowhere to be found


Yet again, Mark Zandi has just guaranteed himself more prime time appearances on CNBC and Bloomberg.

Another opportunity to hop in the sack with Trish Regan or Dierdre Bolton to unload a pearl necklace.

While Diane Swonk continues to morph into another version of Liz Taylor (RIP) and troll the Chicago lakefront looking for 35-year old playboys with fetishes of having sex with surrogate mothers.

Sun, 07/31/2011 - 10:45 | 1509608 Bob
Bob's picture


Sun, 07/31/2011 - 10:54 | 1509639 Spastica Rex
Spastica Rex's picture


Sun, 07/31/2011 - 11:03 | 1509662 disabledvet
disabledvet's picture

LSD baby. "Drive fast, take chances."

Sun, 07/31/2011 - 12:44 | 1509923 WmMcK
WmMcK's picture

Drive it like you stole it.

Sun, 07/31/2011 - 10:31 | 1509571 Cdad
Cdad's picture

Banana Republic, my brothers.  A vote of no confidence for Tea Party members trying to hold tight to real fiscal restraint.  This will destroy the Republican party for another decade. Goodbye Speaker Boehner. 

Bring on the Super that the madness can continue while only Congressmen in safe districts recommend superdee duper cuts that will never come.  

If this is what comes to pass, and Moody's fails to act, welcome to rising interest rates coming to a neighborhood near you via the enforcement of the actual market.  Failed Treasury auctions here we come.

Maximum bullshit now being breached...over the boots and up to the gums.  

Sun, 07/31/2011 - 11:23 | 1509695 Hulk
Hulk's picture

Its time once again Cdad, for a Dr WIlliam Black lecture on fraud as the basis for this crisis

EVERYBODY needs to watch this in order to understand why we are experiencing this crisis and the HUGE  role the credit ratings agencies  play in this.

Its an "epidemic of fraud" Bitchez...

Sun, 07/31/2011 - 11:17 | 1509696 GeneMarchbanks
GeneMarchbanks's picture

'Maximum bullshit now being breached...over the boots and up to the gums.'

Many said that a couple years back when TARP came out, then the 'Green Shoots' propaganda, QE 1+2, etc etc. We're not anywhere near "Peak Bullshit" sorry Cdad. Meanwhile, I'm observing this new phenomenon where I see people just becoming completely indifferent to the deranged, senile garbage being put forth on an almost daily basis. A comfortably numb attitude towards it all.

Get comfortable in a wet suit as the tide is coming in. Tide of feces that is.

Sun, 07/31/2011 - 10:32 | 1509574 -Michelle-
-Michelle-'s picture

"Just-in-time" economic recovery.  See, the last recovery got scanned off the shelf and they were just waiting for this one to ship in.

Sun, 07/31/2011 - 11:13 | 1509682 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Does that mean I can get the last one out back in the dumpster?  I like nothing more than free recoveries!

Sun, 07/31/2011 - 10:32 | 1509576 Arch Duke Ferdinand
Sun, 07/31/2011 - 10:33 | 1509577 Troy Ounce
Troy Ounce's picture



Expect a big party when the heroin whore gets her fix.

Sun, 07/31/2011 - 12:48 | 1509931 WmMcK
WmMcK's picture

I thought it was "Heroine Hoar".  Now it makes more sense.

Sun, 07/31/2011 - 10:33 | 1509580 RobotTrader
RobotTrader's picture

New highs on MCO probably assured by the end of the month.

3 years after "The Great Disintegration", this stock has risen from the ashes from $15 to $35

Yet another company in the "protected class" of TPTB.

Sun, 07/31/2011 - 11:12 | 1509675 disabledvet
disabledvet's picture

Just look at Chesapeake Energy--let alone the rest of the entire nat gas space. i've gotten to the point now where i'm actually a fan of default. i'm pretty sure we all "billionaired up" here in New York so "let's go for it." who knew the real casino was in Washinton DC? Imagine the honesty if the Capitol was moved to Vegas? Imagine the jobs that could be created as well! "An exact replica"? I'm likin' it! Just imagine the betting parlors! Wars...states...entire federal departments--SPIN THAT WHEEL!

Sun, 07/31/2011 - 10:34 | 1509582 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Who Is Holding All the Japan Relief Fund $$$...

OT: 2 min hilarious video...

Sun, 07/31/2011 - 10:35 | 1509586 Archimedes
Archimedes's picture

Unbelieveable! The Republicans just handed Obummer a blank check and guaranteed his re-election. The Ponzi continues for two more years and the US is still rated AAA! So nothing has changed and we can see a 430pt stock ramp tomorrow while the country continues to implode. Once the ink is dry on this farce the Bernank is going to announce a Trillion dollar buying spree!

Give me a break!

Sun, 07/31/2011 - 11:15 | 1509687 docj
docj's picture

But is it really "unbelievable"?

I always expected The Party of Stupid to live up to it's well-earned nickname.

Sun, 07/31/2011 - 10:36 | 1509591 narapoiddyslexia
narapoiddyslexia's picture

They're all hoping that growth and inflation will swell tax revenues so that enough of the the debt will be retired to make it manageable.

Unfortunately, no one is talking about the fact that private debt in the US is 400% of the GDP. 

Thus, Congress is like the guy without legs who got thrown from the roller coaster. [I know its not funny, but I'm not trying to be funny.] 

The only difference is that the USG doesn't realize it is lacking a pair of legs. 

Personally, this debt agreement will be good because it may well cause the price of gold to drop temporarily.

Sun, 07/31/2011 - 11:00 | 1509652 Mike2756
Mike2756's picture

They're going to cut waste, fraud and abuse! Oops! Maybe not!,0,6804492.story

Yes we can't! Cut spending, that is.

Sun, 07/31/2011 - 10:37 | 1509593 Bob
Bob's picture

I watched the tool also talk up the "recovery."  The Mr. Market sock puppet has to be fed--the real economy is not relevant.  It's all Mr. Market: He likes it!


Sun, 07/31/2011 - 10:37 | 1509596 Seasmoke
Seasmoke's picture

i dont think this is going to go as smoothly as they think......some people are going to be pissed

Sun, 07/31/2011 - 10:38 | 1509598 Bob
Bob's picture

Barry Obama is a dead man walking.

Sun, 07/31/2011 - 10:46 | 1509624 i-dog
i-dog's picture

"some people are going to be pissed"

Yes ... but Obama will ignore both of them and bask in the adulation of the other 309,999,998 for having "saved America with his tough talk to those Republicans".

Sun, 07/31/2011 - 10:47 | 1509627 Cdad
Cdad's picture

Being pissed is not enough.  Principled people must act.  As was the case when Congress tried to advance amnesty for millions of illegal aliens, so now the nation must awaken and register its discontent on mass.  Members of the Tea Party who are about to be buried by Speaker Boehner's cooperation with House Democrats need to act in decisive and disruptive ways to give Americans time to flood DC with outrage.

I agree...this could get very ugly before the final votes are tallied...but action is required.  Emotions...we all got 'em.



Sun, 07/31/2011 - 10:58 | 1509649 DeadFred
DeadFred's picture

The shuck and jive routine may irritate the Chinese for instance.

Sun, 07/31/2011 - 10:41 | 1509599 RobotTrader
RobotTrader's picture

<--Market rallies 250 points tomorrow, erasing 3 days worth of losses

<--Another "clothesline drop" in gold as TPTB saves the day again


Another little "speed bump" in the advance of the S & P 500.

Probably look back at this little consolidation next year and wonder why so many people got worked up for nothing.


Sun, 07/31/2011 - 11:14 | 1509683 disabledvet
disabledvet's picture


Sun, 07/31/2011 - 11:41 | 1509739 CrashisOptimistic
CrashisOptimistic's picture


Please note that "the market" never believed default was coming.  The only market that measures that is bonds and the 10 yr cratered its yield.

It did so because of the only headlines the algos read, 0.4% Q1 GDP and 1.3 first look Q2.  It is those headlines that affect corporate profits.

We don't know what the deal looks like, but given we saw 0.4% GDP final look Q1 amid QE2, Bush tax cut extenstion and 2% SS tax cut (All of which have to be called "stimulus") and that now the 2% SS tax cut goes away, QE2 is gone and there's no point in more since QE2 got only 0.4% GDP and increased unemployment to 9.2%, along with an extra 20 billion dollars about to be yanked out of the economy in FY2012 via gov't spending cut -- it's hard to see where the goosing of GDP comes from to achieve the $95 S&P earnings projected for 2011 on which current S&P levels are dependent.

Make no mistake about it.  We achieved only 0.4% GDP amid massive stimulus (Bush tax cut extension, 2% SS tax cut and QE2) and now all that is going away, as well as another 20 B withdrawl of gov't stimulus.  This is not going to generate GDP spikes that algos will read about and interpret as earnings positive.

Sun, 07/31/2011 - 11:56 | 1509800 YC2
YC2's picture

I will be helping the momo's get out of their barbarous relic rocks over the next week or two.  This was so certain an outcome, I held off on DCAing till it was a done deal.


Sun, 07/31/2011 - 15:19 | 1510275 mt paul
mt paul's picture


i'll take the other side 

of that trade...

we need more drama 

before the fix goes in ..



Mon, 08/01/2011 - 12:38 | 1513142 mt paul
mt paul's picture


down 115 so far

robo wrong side

Sun, 07/31/2011 - 10:39 | 1509604 Chip
Chip's picture

Neither Moodys nor S&P were going do a downgrade anyway. They are nothing but puppets for the financial machine.

At least the t-partiers stuck to principle--although I think they should admit it does look like we will need more revenue ;>

Sun, 07/31/2011 - 10:46 | 1509622 cswjr
cswjr's picture

I wouldn't count S&P out just yet.  All along they're the one's who've been playing hardball, presumably to try to save themselves from litigation from the CDO debacle.

Sun, 07/31/2011 - 10:39 | 1509605 ISEEIT
ISEEIT's picture

What a f-ing charade. This 'deal' if it goes down is pure british comedy. Monty Python black/ludicrious humor. Central government has outlived itself. What we are observing now is addicts at their final stage prior to leaving the scene. This is 'soft' revolution. Best case it stays soft and we ignore the histronics. Worst case we split into armed camps who sacrifice our young to defend indefensible turf.

At the end of the day (10 years?) Reality wins and the regime goes down.

Sun, 07/31/2011 - 10:40 | 1509606 Bangin7GramRocks
Bangin7GramRocks's picture

Amazing! The Globetrotters won again. You people all keep hoping the Washington Generals will finally win the game. Sorry to break it to all of you but the game is rigged and the ending is pre-determined. I also believe that a collapse will eventually occur, but you people get all gooey thinking that today is the day. Don't worry, the canned food, shotgun shells and bottled water will last until the eventual collapse.

Sun, 07/31/2011 - 10:41 | 1509609 i-dog
i-dog's picture

Oh, good! The Federal Government has just voted to rack up yet another $10,000 of debt for each and every man, woman, child and infant in the US. And the masses will cheer: "Thank you, Congress!" and "Obama is our saviour!"

At the international going rate of $2/hour, that's only an additional 6 years hard labour in Camp FEMA for each adult male serf to work that additional debt off ... in addition to the labour required to pay off all mortgage, Heloc, credit card, student loan and utilities debts at the date of induction. Then the same will be repeated again next year. Should be fun.

Sounds much easier than going through all the bother of seceding and dismantling the Federal Government before they do something anyone disapproves of!

Sun, 07/31/2011 - 10:43 | 1509616 Minimum Clearance
Minimum Clearance's picture

This whole 'we have a deal!!' meme doesn't address how the 'deal' gets through the Tea Party blockade in the House.  Is there any evidence that significant numbers of House Tea Partiers will change their positions and vote for this thing?  If there aren't, then it's just more jacking off by our self-regarding solons.

Sun, 07/31/2011 - 11:16 | 1509685 Bob
Bob's picture

House Dims will once again vote against their constituents to cover for their fascist Leader in the White House.  We wouldn't want Barry to have to stick his neck out, would we?  The Dims will be joined by moderate Pugs who are happier than pigs in shit. 

It will pass.

Sun, 07/31/2011 - 10:43 | 1509617 antidisestablis...
antidisestablishmentarianismishness's picture

Darn, Armageddon postponed yet again.  Time to rotate the underground grain storage inventory to prevent mold growth.

Sun, 07/31/2011 - 10:45 | 1509621 oldmanagain
oldmanagain's picture

The net result is less money in the hands of those who would spend it.  More money for donut shops in China.

Sun, 07/31/2011 - 10:46 | 1509623 Atlantis Consigliore
Atlantis Consigliore's picture

All the govy numbers are fraud,  the gnp 


as fraudulent as the NAR numbers on house sales.


no one believe them or the pimps in the govie regulators, or


the turbo treasury,


or the NAR fraud numbers on house sales,


or the bankster foreclosure numbers 2 MIO or 7 M?


or the alphabet tv channel talking head numbers,


or the rating agencies gave us Sub prime AAA credit ratings



or the Austans, the Erics, the Summers, the Christines, or


the other fraudsters.


especially Jimmy  2.o.  the altimate liar and theif.


they both sides steal the Treasury and print the


Wiemar counterfeit.


Time to get into Swiss and hide. 


look out that next signpost ahead..


The Inflation Zone!@!!!!!

Sun, 07/31/2011 - 10:46 | 1509625 Long-John-Silver
Sun, 07/31/2011 - 10:48 | 1509628 Subprime JD
Subprime JD's picture

People like mark zandi used to piss me off when Id see them talk their nonsense propaganda lies. after several years of this now I look at them and see what they are: believers, supporters and soldiers of the system. Whether or not they believe the falsehoods they say is irrelevant at this point. They worship Baal and very few will be able to repent from this evil. Also I've realized that scum like zandi are complete and utter cowards who would rather double down on debt stimulus qe instead of admitting their mistakes. We live in a world full of lies but here and there are some bright spots of truth. ZH rocks

Sun, 07/31/2011 - 10:48 | 1509629 glenlloyd
glenlloyd's picture

Every time I see Zandi I feel like punching him in the face. His blatant lies are just as bad as Jeethners.

I hope this mofo falls apart on them.

The excuses I've gotten from my senator about why he's voting for an increase are laughable.

Sun, 07/31/2011 - 10:59 | 1509634 RobotTrader
RobotTrader's picture


From Rasputin, who sums it up perfectly:


I tell you that there is NO, NONE, ZERO, ZIP, NADA "Great Disintegration" going on in these United States, you can believe it is true.

More "Infinite Pigman Games", that corroborate...

"Infinite Fiat/Wash,Rinse, Repeat/Alpha Thug-Pigman"


Here we are, three-years and four months AFTER the greatest debt and derivatives implosion ever witnessed by mankind, and nothing--and I mean NOTHING has changed:

1. Same Alpha Thugs in Charge.

 2. Same Pigmen, running the same type of scams.

3. Same organizations aiding and abetting those scams.

4. Same clueless populace that couldn't care less (but DOES care that Amy Winehouse drank and drugged herself to death.)

...yet a few, left-over, scroom-screeching economic Luddites continue to insist that:

Any minute now, we swear, and this time we meant it, no, really we DO mean it this time, the whole Ponzi Scheme is gonna blow, THEN we'll see some real change, boy, yep some REAL change!!!"

...never accepting the above-postulated (and thoroughly confirmed, corroborated and correlated) "Infinite Fiat/Wash, Rinse, Repeat/Alpha Thug-Pigman" theory is the reality.

Not to mention (and one of the reasons my posts draw so much ire from the gold-and-silver clutchers), I am a former, die-hard, perma-scroomer, who spent YEARS researching, writing about and debating our macro-economic system, before finally coming to my senses and fleshing out (between 2008 and 2010) my final:

"Infinite Fiat/Wash, Rinse, Repeat/Alpha Thugs/Pigmen

...theory, then selling my entire doom-and-gloom stash of PM's.

After realizing:

1. There is NO stock market crash happening. And, as Petey and Robot have been pointing out, the second-easiest money in the world has been made by "buy-the-dippers" over the previous thirty years.

2. Hands down, the U.S. Treasury market has done even better than the stock market--rewarding anyone who TOTALLY IGNORED all the perma-screeching over the last thirty years and simply continued buying (and holding, or rolling over) long-term Uncle Thug IOUs. This is why Bill Gross lives on an island off of Newport Beach, and most perma-scroomers live in studio apartments.

3. The average 401(k)/IRA balance held by Americans is back up to over SEVENTY-THOUSAND DOLLARS, and--even more staggeringly--for those who have been steadily contributing to this system for ten years, the average balance is over ONE-HUNDRED EIGHTY THOUSAND DOLLARS. Here, read it for yourself:, it's hardly as if the U.S. populace is anywhere NEAR in the dire straights this country saw in the mid-1930s.

4. Furthermore, approximately sixty-five percent of the U.S. is some form of "homeowner", and has built up equity in the "ATM", and can STILL borrow from it in a cash-out refi, or--if they are old enough--in a "reverse mortgage".

5. Over one-hundred and fifty million Americans are fully employed.

6. Millions and millions of businesses are still operating, still making money and still employing and hiring workers--a full THREE-AND-ONE-HALF YEARS beyond the beginning of "The Great Disintegration".

7. The exact, same (or similar) Alpha Thugs and Pigmen are in charge of the exact, same monetary/political system. Period. And, as we are now seeing, even the Tea Partiers--who were sent to Congress to "change things"--are now being sucked into the power-borg and are voting to INCREASE spending.

8. Despite all the hysterical shrieking by the perma-gloom crowd that "TEOTWAWKI" is at hand, due to the "budget crisis", the stock, bond and currency markets have replied with a collective "yawn" to the Kabuki theater/melodrama going on in DC. This is becuase everyone knows that--when push comes to shove--Congress and the President will come together and continue to increase the debt. And our foreign debt enablers will keep swallowing Uncle's IOUs.

  Don't believe me? Well, don't take my word for it, just read the latest "Credit Bubble Bulletin", found here:

...and read for yourself that total international reserves (the VAST majority being U.S. dollar-denominated assets) has now blown past:


...and shows ZERO signs of abating.

Sorry to once again have to disappoint the scroom-screeching shiny-coin-and-gun-clutching, MRE-eating perma-doomers, but according to ABC News, here:

Hopey and Congress just came to a tentative agreement on raising the (fake) "Debt Ceiling".

Here are a few details:

1. The deal will raise the (infinite) "Debt Ceiling" by a "mere" 2.4 TRILLION dollars.

2. (fake) "Spending cuts" will be phased in over...get this...TEN YEARS!!! (Of course, in "Washington Speak" a "cut" is actually an INCREASE in spending, but just at a slower rate than the previous, outta-control one).

3. In TRUE bureaucratic fashion, yet ANOTHER "Committee" will be created (at taxpayer expense, of course) to study the problem of over-spending, racking up additional expenses to do so.

So, there you have it, perma-scroomers: once again, your fantasies of TEOTWAWKI are thwarted by the Alpha Thugs in Charge.

Therefore, look for stock markets to sky on Monday, and I will finally be able to buy that 10-year Treasury I have been putting off purchasing, while I awaited the Washington Thugs to finally come to some agreement.

"But any minute now, we swear, this whole thing is gonna implode!!!" the scroom-screechers will reply


Sun, 07/31/2011 - 11:01 | 1509656 Spastica Rex
Spastica Rex's picture

Are your fingers bleeding now?

Honestlly, that was awesome. I really think you said everything you needed to say. No need to post ever again -- really: what more is there?

Sun, 07/31/2011 - 11:05 | 1509668 narapoiddyslexia
narapoiddyslexia's picture

Maybe Robo didn't read down to the bottom of the piece by PrudentBear.

"So, the markets’ hardened perceptions of “moneyness” owe a great deal to the notions 1) that the Fed will buy as many Treasurys as it deems necessary to sustain abundant market liquidity and support economic recovery; 2) that “developing” economy Credit systems will continue enjoying unprecedented flexibility and capacity; 3) that Asian central banks have too much invested to back away from dollar and Treasury market support; and 4) that China and others will bolster an increasingly fragile euro as a critical counterbalance to the dollar.  In sum, markets have viewed global central bankers as sharing a unified interest in sustaining the sovereign Credit boom.

I really worry when I see divergences between headstrong market perceptions of “moneyness” and a marked deterioration in the trend of underlying creditworthiness.  Such “gulfs” are the trappings of market dislocations and crises of confidence.  I believe this is especially the case currently.  Emboldened by past successes, market perceptions have been driven by unrealistic assumptions of the efficacy of government policy measures.   

Italian bond yields surged 47 bps this week, as market enthusiasm for Greek bailout II dissipated with an alarmingly short half-life.  Meanwhile, negotiations to avoid an August 2nd debt ceiling debacle became only a greater national embarrassment – and the Treasury market enjoyed another rally!  

Perceptions of “moneyness” played a major role in nations attaining the capacity to accumulate unmanageable debt loads.  And it was not long after market perceptions began to normalize that periphery European sovereigns faced untenable situations.  As I’ve written recently, debt loads (from Greece to Italy) were manageable only so long as markets disregarded (mounting) underlying Credit risk.  Today, the markets are content to perceive perpetual “moneyness” in Treasury debt.  And this guarantees that an insidious impairment to underlying creditworthiness runs unabated.  Yes, the Fed has thus far succeeded in ensuring that the system remains flush with “money.” Meanwhile, a dysfunctional market pricing mechanisms ensures that these debt obligations continue to be over-issued in ridiculous quantities.  It will be an interesting weekend in Washington."

Sun, 07/31/2011 - 18:55 | 1510683 CD
CD's picture

RobotTrader did better when it actually seemed like he might have a moral compass stashed away somewhere, or at least mounted on the wall in a frame as a memento of his days of youthful, naive exuberance. But with all the retrospective wisdom he imparts on us lately, he always seems to neglect these two very humble, very simple charts:

Technically, he is absolutely right. The wagon will keep rolling, until ALL the wheels have fallen off. I am just puzzled by the willful denial of the very plainly visible indications that systemic stability generating these wonderful 30+ years of perpetual no-brainer prosperity is at a critically low level.


Sun, 07/31/2011 - 11:09 | 1509673 Cdad
Cdad's picture

Sorry to once again have to disappoint the scroom-screeching shiny-coin-and-gun-clutching, MRE-eating perma-doomers, 

LOL!  +1 for descriptive quality.

However, you could have spared everyone your screed and just written:  "Status Quo...bitchez!"  

Sun, 07/31/2011 - 11:12 | 1509678 AnAnonymous
AnAnonymous's picture

Funny how this US citizen can not move away from the fairy tale of US tax payer money... Somehow, feeling like a victim no matter the situation is a feature of the US citizen eternal nature.

Sun, 07/31/2011 - 11:38 | 1509744 anynonmous
anynonmous's picture

I thought Rasputin was still hibernating?

Sun, 07/31/2011 - 12:17 | 1509850 Canaduh
Canaduh's picture

Sharkelberry Fin for everyone!! YAY

Sun, 07/31/2011 - 12:18 | 1509854 DeadFred
DeadFred's picture


Western civilization has become like the old water civilizations where an elite class have total control of the economic, political and military power by way of controlling the means of survival. In olden days that meant irrigation water and today it is credit. Water civilizations are largely immune to internal threats because sustenance can be withdrawn from any individual or group that poses a threat. As an example in our case Ron Paul won't win the election because his access to the media and money can be sufficiently curtailed so as to insure his defeat. His opponent whoever that is will get more money and will be well treated by the press. Water civilizations continue to wallow in their corruption until they are finally weakened enough to fall to an external threat from a more vigorous outsider. Our system won't implode on it's own, it will be caused to implode by an outsider who wants a better position in the world.

The BRICs are not part of our system they are just cooperating while it's to their advantage. Look at how the Indian economy fared during our last crisis, they are clearly a separate economy. When the outsiders decide they are tired of our games they can end it overnight. China only has to say 'enough!' and sell it's bonds. Ultimately they will do so, but when? A week, a month, ten years, more, who knows? That's when the scroom-screechers will be right. BTFD will be a great way to make money until it suddenly isn't. Hedge yourself because you may not know the hour it comes. Sadly until then you will likely be right.

Sun, 07/31/2011 - 12:58 | 1509948 Debt Rolling
Debt Rolling's picture

Yes, Robot, you are right on a lot of things. I don't think either that the masses will suddenly "wake up", or that Ben Bernanke will end his life hanged up to a street lamp. In fact, he will very probably die peacefully, wealthy, and he will be honoured in textbooks. 

So the Alpha Pigmen will stay in charge. Ok with that. 

But why this fact should invalidate the collapse of the western financial system? How can the Pigmen suppress the laws of physics? 

Most people here - except a handful of clueless idealists - do not believe in a revolution or the victory of Ron Paul in 2012. Still, they believe in the inevitable collapse of the western banking system. The Bernank can stay at the commands, but he cannot create wealth out of thin air. He cannot prevent real wealth from shrinking. A tyran at the commands of an empire cannot prevent it from collapsing just by saying so or creating the illusion of sustainability by clipping coins/printing money. If you don't believe that, look at the endless list of physical and economic empires (and the associated world reserve currency) that disappeared across the history. 

Sooner or later, the USA will be a shadow of their old selves. It won't be the sudden, deafening crash idealists and zealots are waiting for, nor the law-abiding debt clearance deflationists are waiting for.

It will be a long, slow, silent slide. A bit of inflation, every year, until the level of life of Americans has sufficiently been lowered, and America is no longer an empire. 

Those who hold physical precious metals will have at least safeguarded their capital. But it's obvious they probably won't find any job in the 2025 wasteland. 

Sun, 07/31/2011 - 10:54 | 1509640 jkruffin
jkruffin's picture

Can we please just quit acknowledging that Moody's even exists?  I mean, why even give them the time of day to even mention their name, or any of the other ratings agencies? They are all a farce...they work for the bankers....they never do what is right until it is too late...damn quit even posting their name on anything....They are losers..

Sun, 07/31/2011 - 10:55 | 1509641 lizzy36
lizzy36's picture

The good news is that every economic number that misses consesus (all of them) over the next 6 months now has a prepackaged excuse: DEBT CEILING.

Debt ceiling debate really is the new weather excuse.

Sun, 07/31/2011 - 10:55 | 1509643 apberusdisvet
apberusdisvet's picture

The new mantra will be "Fall Recovery"  or should it be "Recovery to Fall"?  How about the "winter of our discontent"?

BTW; Zandi is an Administration pedophile doling out Zandi's Candies to all the children on CNBC.  He'll be on every day next week; bet on it.

Sun, 07/31/2011 - 11:27 | 1509715 Sathington Willougby
Sathington Willougby's picture

How about the winter of monetary incontinence?

Sun, 07/31/2011 - 10:56 | 1509645 Dr. Gonzo
Dr. Gonzo's picture

Ha. Ha. I knew something was cooking. On Meet the Press Jim Crammer just floated the idea that they might have to sell our gold in Fort Knox on Tuesday to avoid default. This whole thing might be THE DIVERSION to find a smoke screen and invent an excuse for our gold to go bye bye. Then they could get Ron Paul off their back about auditing their empty warehouse, They could crash the price of gold for a month or so with rumors of imaginary gold being sold, they could buy enough time pay off the first way of mature debt coming due and raise the debt ceiling a week later after all the gold is soldand then do QE 3,4 and 5.They keep moving the goal post deadline in the narrative and that was probably why. Maybe they want a grand sweep and are going for a trifecta with the main goal of cover to rid themselves of gold on their balance sheet they don't have. They have to deal with this elephant in the room sometime. Why not now? It's a perfect plan. In another year our people will accept the fact that we have no gold, a worthless currency, and a gutted industrial base and it was nobody's fault. It just happened all by coincidence and now our kids and their kids and grand kids and great grand kids will suck banker dick forever and lick politican boot forever. They are going to pick this carcass clean. Ha. Ha. Everyone is so worried  and preoccupied about our debt and currency going bad all the while they are stealing the gold right under our noses. We are fucking idiots.

Sun, 07/31/2011 - 10:59 | 1509650 Reese Bobby
Reese Bobby's picture

This was the best skewering of Zandi I have seen. VERY funny:


Sun, 07/31/2011 - 11:17 | 1509692 anynonmous
anynonmous's picture

outstanding skewering

Sun, 07/31/2011 - 11:18 | 1509697 Conrad Murray
Conrad Murray's picture

That is excellent. Thank you.

Sun, 07/31/2011 - 11:21 | 1509708 johnnymustardseed
johnnymustardseed's picture

Only the weatherman is wrong  more!

Sun, 07/31/2011 - 11:06 | 1509669 oobrien
oobrien's picture

The rating agencies CAN'T downgrade the U.S.

Didn't you see them get berated in front of Congress?

If they downgrade, they go to jail for previous forgiven fraud.

We'll be AAA forever!

It's a rigged game.

Sun, 07/31/2011 - 11:11 | 1509676 Obamananke
Obamananke's picture

I expected these clowns to come up with a last minute deal.Still sitting here in disgust.Anybody going to ride ZSL down for awhile?

Sun, 07/31/2011 - 11:14 | 1509684 johnnymustardseed
johnnymustardseed's picture

More smoke and mirrors, Moody's has great skills in correctly rating things!!! A downgrade that resulted in 1% increase in interest rates would create an additional deficit of $140 billion, that would wipe out the $90 billion cuts for the next two years. Most Americans do not get the reality of where we are in this collapse.

Sun, 07/31/2011 - 11:15 | 1509686 Flore
Flore's picture

if they could upgrade them to AAAAAAA and get some money.. they would do it

Sun, 07/31/2011 - 11:16 | 1509688 The Count
The Count's picture

Mark Zandi is a reflection of the human psyche. People rather hear neutral or good news even though it may be an outright lie over and over, than get the truth. Unpleasant truth forces us to think about stuff. We rather watch The Real Housewives of Timbuktu or any other of the countless moronic reality shows. No wonder our government sits on a ton of classified information that caused Al Gore to say that even he only knows 5 percent of whats really going on. 



Sun, 07/31/2011 - 11:22 | 1509707 The Count
The Count's picture


Sun, 07/31/2011 - 11:16 | 1509691 oogs66
oogs66's picture

what exactly does chief economist at moody's do?  why do they have one, and why does he get this much press?  and when did he become the analyst for the u.s. debt? 

he is a such a waste

Sun, 07/31/2011 - 11:22 | 1509710 The Count
The Count's picture

See my post above. And I would like to add this: People need so called 'experts' to conjure up 'predictions' of what is going to happen because humans hate nothing more than the unknown. Want a good economist joke?

Economists were invented to make meteorologists look good. 

Sun, 07/31/2011 - 11:17 | 1509693 silvertrain
silvertrain's picture

Raising the debt ceiling is very positive for pm's , commodities,farmland , insert your pick,because it simply means nothing is going to change and the game can continue on the same as always..We will take in 2t and spend 4t, lets see how long it can last..

Sun, 07/31/2011 - 11:18 | 1509699 Unlawful Justice
Unlawful Justice's picture

On a personal note:    I have decided to forgo Rehab in favor of increasing my alcohol consumption 1000 fold.  The money saved from Rehab will be spent ingeniously on my new plan for recovery.  Please excuse all other unintended outcomes while my recovery is in process, as my recovery will be transitory.  











Sun, 07/31/2011 - 11:24 | 1509711 Sathington Willougby
Sathington Willougby's picture


Be careful. The key is to stop only when you want to stop. 


Rock bottom is defined by the willingness to stop digging, or death, nothing else.

Sun, 07/31/2011 - 11:20 | 1509702 jmc8888
jmc8888's picture

Wow, at least one rating agency, all of which should be out of business, says pay Wall Street, create the Super Congress where if their rec's aren't taking, there are cuts across the board, and we'll keep your not needed credit rating, to remain at a bogus elevated level.

Of course if the U.S. congress actually coined money like it SAYS IN THE CONSTITUTION, we wouldn't need to 'borrow' money, thus not need a credit rating, from a fucked up company that gets everything wrong (and only recognizes that we're in a mess....and never saw it as it built).

Woo Hoo

Banksters win again.  They get paid, we get screwed (even by $1 dollar is too much).

The debt is fraudulent, cancel it.

If you don't want to cancel it, you don't want to solve the problem. 

Of course, if this crap is passed.


We need....


Sun, 07/31/2011 - 11:21 | 1509705 bugs_
bugs_'s picture

Deep Shah

Sun, 07/31/2011 - 11:21 | 1509706 snowball777
snowball777's picture

Will they still be going with a negative outlook?

Sun, 07/31/2011 - 11:26 | 1509713 Hedgetard55
Hedgetard55's picture

Wow. Just how high can my Swissies go now?

Sun, 07/31/2011 - 11:30 | 1509725 Farmer Guy
Farmer Guy's picture

Don't forget the insiders still have to get this past the Tea Party in the house. Look how much trouble Boehner had getting his bill passed by them. And they're going to sign of on this new joke of a bill? Only if they've been bought, which if it happens, would tell all the Americans that the chances of real reform by election are actually zilch. Either way things get more interesting here very soon. And the preservation of AAA (I don't think this is a lock either) will prove to be as we like to say..."transitory".

Sun, 07/31/2011 - 14:27 | 1510150 bk1037
bk1037's picture

I agree with this. The media is trying to spin this as if it is a done deal or close to done. However, the Tea Party will oppose it since it doesnt have the Balanced Budget hard requirements (softened up quite a bit), and it won't take a lot of disaffected Dems (nothing in it for their constituents) to sidetrack this whole business. They are counting on a lot of support from members who have not weighed in on what is being discussed since they haven't seen the plan. This is typical bullshit of TPTB, frame a solution after protacted weeks of scaremongering and then paint holdouts into the corner and make them responsible for fallout. I didn't think it was possible, but honestly this exercise has introduced to me a whole new layer of disillusionment with how our government actually works. Sometimes I can follow exactly what the Tea Party reps are doing here, jam up the process and force reform. This is not reform, it is more of the same.

Sun, 07/31/2011 - 14:27 | 1510151 bk1037
bk1037's picture

I agree with this. The media is trying to spin this as if it is a done deal or close to done. However, the Tea Party will oppose it since it doesnt have the Balanced Budget hard requirements (softened up quite a bit), and it won't take a lot of disaffected Dems (nothing in it for their constituents) to sidetrack this whole business. They are counting on a lot of support from members who have not weighed in on what is being discussed since they haven't seen the plan. This is typical bullshit of TPTB, frame a solution after protacted weeks of scaremongering and then paint holdouts into the corner and make them responsible for fallout. I didn't think it was possible, but honestly this exercise has introduced to me a whole new layer of disillusionment with how our government actually works. Sometimes I can follow exactly what the Tea Party reps are doing here, jam up the process and force reform. This is not reform, it is more of the same.

Sun, 07/31/2011 - 11:50 | 1509754 JR
JR's picture

 U.S. Treasury Secretary Geithner  and Moody’s do not speak for the American people or the American economy; they speak for Goldman Sachs and JPM.

Sun, 07/31/2011 - 11:46 | 1509768 Atomizer
Atomizer's picture

Wee. If debt ceiling is passed, Obama can skirt thru new spending without accountability. Not going to happen! He will pepper more talcum powder to look exhausted in raising new peasant taxes.


Sun, 07/31/2011 - 11:46 | 1509769 Bastiat
Bastiat's picture

Granting authority to raise more unredeemable debt, create more ever diliuted dollars, does nothing to increase the value of or confidence in the USD.  There's a bid under the precious metals and it will be there for the duration.  Sure there will be a raid on PMs after this, but like all recent raids it will not have legs.  My guess on Silver is the monthly candle for August will close halfway down the body of the July candle, at worst.   I doubt they get that much on gold.  Monetary inflation is about money supply; and it's about to increase--see the long term correlations of money supply and gold price.  This little drama, with Moody's collusion, is more "Management of Perception."  Nothing has changed except more $trillions are on their way into the world. 

Sun, 07/31/2011 - 11:47 | 1509770 Catullus
Catullus's picture

Mark "Face Saver for Treasury Secretaries" Zandi.

Thank God, Zandi actually warned the US may be put on negative watch.  Else Aug. 3 would have looked like a huge political gamble for Geithner and Oblama.

Sun, 07/31/2011 - 12:00 | 1509810 hejss
hejss's picture

Will be hard for Moodys to survive then. Who is going to trust them? The government would just be happy to get them out of their way.

Sun, 07/31/2011 - 12:31 | 1509880 Incubus
Incubus's picture

Hard to trust them?  The housing mortage debacle wasn't enough?   How forgiving are the dumb-masses, really? 


That's the thing about the architects of social constructs; because of the "human" need to cope--to make "normal" the absurd--they have things so easy; all they have to do is ease the sheep ever closer to the cliff, and the sheep will just self-adjust. 

I just wonder how well they can train these sycophantic creatures of habit.  Humanity is such a sad case.  No one really "is" anything beyond a hodge-podge of abstractions.  Bipeds that grab at qualities they wish they could somehow make part of themselves.   We just are.  Anything else is posturing and theatre.

And I hope the fucking theatre burns to the ground.

Sun, 07/31/2011 - 12:28 | 1509879 Threeggg
Threeggg's picture

So, The printing press saves the day again ?

Sun, 07/31/2011 - 12:32 | 1509888 Yes_Questions
Yes_Questions's picture



Boat Drinks.

Zandi et al are a dying breed what with credit ratings on humans and Fiat addicts alike striving toward obsolescence.


Sun, 07/31/2011 - 12:33 | 1509893 The Coon
The Coon's picture


It is quite obvious now what the game is going to be in terms of the AAA rating.   All week, both MCO and SP were out saying it would prolly take $4T in cuts to hold the AAA rating.   Now, MCO comes and says the proposed $3T deal will work to keep the AAA rating.   I am willing to bet that SP cuts the debt to AA+, thus we have a split rating and all those that are required to have only AAA rated in their ports, can.   Thus everyone is happy.     Just more bullshit.     Pretty fucking sneaky.
Sun, 07/31/2011 - 13:52 | 1510059 jomama
jomama's picture


bring on the class warfare.  this theater is a revolting joke

Sun, 07/31/2011 - 14:08 | 1510097 Ramboy
Ramboy's picture

The can will be kicked for hundreds of years.  Tens of wars will be fought and a hundred bull and bear markets will have passed.  Empires usually last a millenia and end.  Why do you people bother talking about something that won't happen in our lifetime or your great great great great grandkid's lifetimes.  Methinks it's an ego think not much different from rapture worship

Sun, 07/31/2011 - 14:16 | 1510125 Iam_Silverman
Iam_Silverman's picture

"But if the deal hangs together - a big if, considering the likely opposition of tea partiers -- it's "great news and that gets us very close to fiscal sustainability -- I'm very excited.""

Boy, I sure must be stupid - being able to borrow money in order to pay off current debts, that's fiscal sustainability?

Sun, 07/31/2011 - 14:23 | 1510138 whiskeyjim
whiskeyjim's picture

Double the size of government in less than 10 years. Double the deficit in less than 2 years. promise to pay half of it back in 10 years, details to follow.

We are good to go.

I get it. I really do.

Sun, 07/31/2011 - 14:39 | 1510178 DosZap
DosZap's picture

As far in the Shicemesser as we are, does it really matter?.I mean, really...........................the calorically challenged lady sang LONG ago.

I am going to use the extra time to convert more, and save more to convert, seek out a safer clime, and try to get my nuclear family to see the light,get the hades out of Dodge.

Wed, 09/14/2011 - 04:15 | 1667237 chinawholesaler
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