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S&P Downgrades US To AA+, Outlook Negative - Full Text
United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative
We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.
We have also removed both the short- and long-term ratings from CreditWatch negative.
The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.
The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.
Rating Action
On Aug. 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. The outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.
The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service--remains 'AAA'.
Rationale
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.
Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).
Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.
The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.
The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.
We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.
We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.
Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.
Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.
Outlook
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently
assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.
On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.
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Cloward-Piven?
Don't forget a total collapse, or total war are the two legitimate reasons to follow communistic policies. Only for the duration of the crisis, of course.
Cloward-Piven.
One reason S&P has the balls to downgrade the U.S. govt is that the U.S. did not have the balls to prosecute S&P for its role in the greatest financial crimes in U.S. history.
Now, by downgrading the U.S., the S&P can simultaneously 1) distinguish itself from Moody's as a marketing tactic, and 2) avoid any chance of prosecution for alleged past RICO crimes by claiming that prosecution is retribution for the downgrade.
Follow Harry Reid's immediate reaction - They shouldda accepted the Democrats plan. We need to tax the rich.
Follow Harry Reid's immediate reaction - They shouldda accepted the Democrats plan. We need to tax the rich.
What took em so long?...............
Once the debt clock passed $14.5 trillion that was the final straw.
I'm a little disappointed the headline didn't start with: "It's on like Donkey Kong." Shit is going to hit the fan on Monday. S&P let the stock market have its fun today. Monday the party is over.
QE3 Sunday night, or the market goes limit-down on Monday.
Shorts will be happy on Monday. No QE3 for atleast 2 weeks....
Maybe not QE3, per se, but I could definitely see the Fed opening the floodgates on Sunday to avoid a major market dislocation on Monday.
Very happy, if that's the case. Possible full-out no-bid open on Monday?
Suck on that, Mark Zandi, you F'n Obama sellout. How long before Moody's and Fitch follow S&P, because, you know, ratings agencies are so proactive and stuff. They're never late to the party. ....
+ 666
Now watch all the mutual funds scramble to change their holding requirements to make it OK to hold Treasuries even though they are TOO RISKY.
It's funny because it's chaos!
It might just be easier to have the regulatory bodies implement the rule changes before monday's opening....lol !!
AA+nd so it begins.
AAAnd it's gone?
What's the half-life of hopium?
Apparently about 12 months. Last large shipment of Hopium was delivered to the U.S. in Washington D.C. Jan 2009, only traces can now be found in August 2011. Last known location was at the corner of Glass Pipe Blvd and Crack Rock Avenue.
Someone said Obama's birthday celebration would last all week.
They don't make Messiahs like they used to...
Four years.
+ $1655
According to my brokerage account, S&P currently ranks the equity of BofA at 5 stars, the highest rating it issues.
Any ratings agency that gives BofA 5/5 stars, should be regarded as utterly incompetent.
All the CDO's on the Treasury's books are probably still rate AAA. The rating agencies need to be prosecuted and competent ones need to replace them.
I wonder if websites are going to sell out of their silver inventories again.
Since when does S&P veer into honesty, huh? There's a pretty good 1940 movie called "The Great McGinty" written and directed by a really clever guy named Preston Sturges that begins with the screen showing this text (paraphrasing) THIS IS THE STORY OF TWO MEN. ONE OF THEM WAS HONEST ALL HIS LIFE EXCEPT FOR ONE CRAZY MOMENT. THE OTHER WAS DISHONEST ALL HIS LIFE EXCEPT FOR ONE CRAZY MOMENT. THEY BOTH HAD TO LEAVE THE COUNTRY. This is that one crazy moment for S&P.
AIG and Lehman Brothers were rated AAA, and....AA minutes before they were collapsing.
So BofA will be 5 stars all the way to ....$1 per share! The ride will be the steepest & quickest one to pennyland.
nice finally they got the cojones to do what others failed to...wheres Moody now?i bet they will follow suit pretty soon
Don't count on it.
Moodys is totally pwned.
This is collateral mayhem. I now am highly concerned for non-linear repercussions (beyond market movements)
They will surely get investigated by the DoJ for their role in the Financial Crisis of 2008.
??. I am talking about the trillions of bonds held with zero to 1% down that now are going to need more collateral - dominos quickly move to all markets. Not good and not planned for. This may spiral outside the financial markets.
Wouldn't that be too obvious at this late juncture?
You think the government will care?
Read "The Big Short" by Michael Lewis, ISBN: 978-0-393-07223-5,
You'll find that the ratings agencies were using an easily reverse-engineered algorithm for determining ratings. The Banksters gamed the ratings agencies!
Fascinating, but could you spell out the algorithm a little? Just saying "Read the book", which I hope to do eventually, is not very informative, although I very much appreciate the reference. With such a perspective available, it is important that we have the particulars as quickly as possible. We need to collect the details of all the various forms of fraud that have been committed in order to have them available if, by sheer luck, someday there is a chance for airing all this dirty laundery. Also, you make it sound like the ratings agencies were fooled or something.
Trillion dollar coin, Bitchez.
They'll be magical cupro-nickel coins with Timmah's eary mug on the obverse. A jackass on the reverse.
So, this collector edition coin will have the same image on both sides?
They'll be replaced by "infinity dollars" no denominational markings, simply an infinity sign on one side, and "full faith of the U.S. government" on the other side with a picture of your favorite American Idol contestants.
Collect the entire series before they are replaced by the infinity squared dollars.
That sucks. Thank Goodness the White house is hard at it on the jobs front: http://keeseys.com/america-works.pdf
On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'...
RuhRoh
Yup. This is how Obama gets his tax increase...s and p made him do it for the good of the country.
>Vomit<
Yep, no matter if SP planned it or not and Obama and slime wanted it or not, this gives the
FUCKIN WHIP HAND to the "gang" now.
The TP and the elite that have madoff with the coin NOW get to cut the throat of the bottom 90% of suckers via the rusty blade of austerity.
A perfect storm of a setup.
Are the sheep still able to even bleat before they are silenced for good,
It gets the hose again and again and again ........................
exactly who died and made SP/fitch/moody lord and master ......oh that's right the same ones who HOLD ALL THE MONEY AND PAY FOR THE RATINGS.
You fukin dumbass sheep..................
Talk about delusions of grandeur! Does S&P really think they can move treasury yields 50 bps?? HAHAHAHAHAHAHAHAHAHA!! :SNARK!: THEY COULDN'T SELL FAKE PATENTS TO THEIR MOTHERS!!!
BREE HEE HEE!!!
SEXY TIME!
This is bullish for Treasuries as expectations for central bank monetisation will increase.
And anyway, AA+..? Come on, if the ratings agencies were honest they would have rated Treasuries f- years ago.
So are we looking at a Lehman weekend for BAC since so much of the Frannie paper at the Fed is likely of Countrywide vintage?
Should have been CCC-...
I'll have you know that George C. Marshall ran the CCC. It was one of the few Alphabet Agencies that actually worked.
AA America is still a beautiful country. Our people have just been spoiled, but that is easy enough to fix.
Such a beautiful sentiment HH, thank you!
Sadly our president had no REAL interest in stimulus, otherwise the 700BILLION that went out already would have been for a CCC type project. We can't let the fox guard the hen house so to speak.
Peace and best regards HH!
Agrotera
you have to examine the demographics of poverty now to understand that such programs, if enacted today, would be blasted as rayciss for lacking diversity
Agreed. But sure woulda been nice if the assholes had at least made some freakin' pitiful tiny effort to shove some money to Main St. instead of handing it all to banksters, while talkin' "jobs, jobs, jobs" and hiding behind their lame-ass excuse of "not shovel-ready". Only thing they stimulated was our collective ass. Shit. Oh well......"ooops"....."aw, yer OK, it's only a flesh wound"
Oh, just in time for everything is closed until Monday statement. I'm sure this wasn't thought out in advance.
It was 40 years ago this month that President Nixon ended the convertible of 42 dollars into 1 oz of gold.
There has not been a fiat paper currency that has lasted more than 40 years.
God help people holding dollars and god help americas economy now.
It was a similar hot August evening...8-15-71.
Why should God be better to USA than he was to Sodom? IF there were 5 who honored God in Sodom He wouldnt have burned it. In 1971, a guy would be fired from a govt job if he was guilty of adultery. 2011, 95% of USA are atheists [in name or practice]. God and His followers are mocked. And insulted.
Someone here said everyone will just downgrade and it won't mean anything. Downgrade to Z minus minus minus sinus minus sinus minus Z. It's just fiction. The S&P didn't mean anything in the last 10 years. It won't matter in the next ten years.
Main Street is what matters. Pension funds? Hire newly minted MBAs with no connection to Wall Street. One of my relatives did a decent job managing his state's funds.
You know, I joke around from time to time. Hell we have to have a sense of humor to keep our sanity.
But Jesus H. Fucking Christ, this is BAD.
No, what's bad is that at some point we will look back on these days as the good old days. How fucked up is that?
I hear ya. You know, maybe Thomas Jefferson was right. Now I am saying that with total false humility, because I know for a fucking fact that he was right. Every society, in order to survive, requires a revolution once in awhile. I honestly think we are at that point.
Ooooh. Yes I know, the fucking TSA and FBI and DHS are now going to hunt me down. And I'm quite sure they will. You're welcome boys. Come by anytime. But in all seriousness, even if disident voices, like myself, are thrown in a dark concrete pit, there will still be others to take my place. You cannot silence ALL of us. You just can't. It's mathematics.
A revotution is coming, sure - but the majority of those revolting will not be the ones who agree with the viewpoints of the readers of this site. It'll be a revolt demanding circuses.
Indeed.
"Ooooh. Yes I know, the fucking TSA and FBI and DHS are now going to hunt me down. And I'm quite sure they will. You're welcome boys. Come by anytime. But in all seriousness, even if disident voices, like myself, are thrown in a dark concrete pit, there will still be others to take my place. You cannot silence ALL of us. You just can't. It's mathematics."
That's right brother. If they get you, they still have to get me. And if they get me, they still have to get the thousand I've awakened. Those thousand have millions behind them. Let's get this f'ing party started. I would have dearly loved to have had another couple of years, but when God has ordained it is a man's time to die, he directs his footsteps to that place.
In the end, Pb is only one slim proton away from Au.
Holy Fuuuuuuuuuk......
Funny how the U.S. following their advice and ratings helped get the U.S. into this mess.
These places should be closed, they're useless.
Yep, the toxic debt is worth crap, and we need to Glass-Steagall it.
But Obama has no one to blame but himself (and all other administrations in the ponzi) for not enforcing Glass-Steagall to the fullest, weakening it, or getting rid of it.
So to be fair, when is Standard and Whore's going to downgrade everything else? Everything that can be rated, pretty much should be rated, junk.
After all, we're all one big ponzi.
Of course they blame medicare, medicaid, social security, they're monetarist dumbshits. As long as the ponzi is around, these become more expensive at a much faster rate. But no they couldn't say the truth, they had to say things from a TBTF perspective, and that they are above old people and have to be cut.
Well now that we've lost 'our AAA rating' who the fuck cares about whatever else they say. They used their ONE bullet. Now they are useless. The streak is over, the pristineness is gone, their power now eroded.
Glass-Steagall, and put out of business the crap, TBTF cock sucking rating agencies. This isn't about being downgraded, as we all know the ponzi is broken, and debt everywhere is at risk.....it's about everything else these cocksuckers represent in a wholly idiot way. The mere fact they think that any cuts or taxes, or combination can save this moentary fucktard of a system proves they are incapable of rating anything. Way to pick on the U.S. (after looking the other way) when it is all so futile....way to miss the forest from the trees.
Fuck Off Standard and Whores...you're as bad as Bernanke in my book. Hey Standard and Whores....the TRUE structural issue? It's called lack of Glass-Steagall. Not your fucktard, dipshit, retard explanation.
I thought it Was Bush's fault
Assuming that you mean(t) George Jr, it was he who, as we peered into the precipice, said that the economy was fine... LOL. Yeah, from the same mouth that uttered the words WMD in Iraq...
Hell would be too nice of a place for fucks like these...
I'm sorry, but Obama was propped up and put into place by these economic war criminals to keep the masses from storming Wall Street after the last go-round of looting.
The biggest lie sold to the American people by the political class is that the Democratic Party and the Republican Party are different. They aren't. Obama and Bush were both stooges of the banksters who run the show. Obama was a starry-eyed leftist who sold his soul for thirty pieces of silver. Obama wanted his head on Mt. Rushmore; he was such an easy mark for the banksters.
In return? He sucked Satan's cock, just as Bill Hicks said of M.C. Hammer.
Or should I say, he sucked Soros' cock.
Bush? His was a bankster family from the getgo. He was in on the scam from the beginning.
It's going to be interesting watching the great unwinding.
+1776
Maybe W. and O. can share a lampost.
I've got more than thirty pieces of silver. Any chance I can buy the bitch back?
The government will never admit a mistake and reverse a bad decision...especially one that puts money in their pockets...
Government is a subset, replace with "power" and you're on target.
you are right
Totally awesome! I applaud S&P for having the guts to do what no other BS rating agency had the balls to do.
The big high five goes to Egan-Jones for an honest opinion.
I wouldn't applaud them. If they were honest, they'd downgrade everybody and not just the US. This is a planned event, a controlled demolition aided and abetted by the S&P.
Totally awesome! I applaud S&P for having the guts to do what no other BS rating agency had the balls to do.
We've got enough problems at the minute without these dickheads shooting their mouths off. Shut them down.
This isn't the usual Friday night news dump the administration likes to do.
Oh, who could forget...
It's transitory.
This is what all the banks have been waiting for. The fed loaned them the trillions of dollars they are sitting on for what, .25%? Now interest rates will go up, and the banks will buy Treasuries with the free money that we gave them and screw the taxpayer even more, if that's even possible at this point.
Gee, Mr. Potter!
"The bank run"- http://www.youtube.com/watch?v=qu2uJWSZkck
Apr 20, 2011 6:00 PM CT
Fox Business reporter Peter Barnes began his televised interview with Treasury Secretary Tim Geithner two days ago with this question: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”
Geithner’s response: “No risk of that.”
“No risk?” Barnes asked.
“No risk,” Geithner said.
http://www.bloomberg.com/news/2011-04-20/geithner-downgrades-his-own-cre...
Well, it was a FAUX reporter.
and domestic financial terrorist, right-wing Christian extremist and all-around very bad person presumed to be concealing weapons of mass destraction.
Moron. If we were to wait for your favorite WH mouthpieces to ask a direct question we would be dead and buried.
Oh, don't wait for my fav WH mouthpiece to interview cabinet secretaries anytime soon:
http://www.google.com/search?q=monica+lewinsky&hl=en&client=firefox-a&hs...
Yeah - cos you would rather wait for the NYT or MSNBC to nail it...keep waiting. You are the problem.
@Frobe and Douche:
Fox's journalism is a known quantity just the same way as NYT, MSNBC and the WH Press office are.
Its called Mainstream Media. If you want to pick a brand in MSM, have at it, but bring this along if you get confused:
http://www.newspeakdictionary.com/ns-dict.html
And that should be the immediate end of Geithner.
And the other 99% of Americans who are currently watching DWTS or some other inane source of distraction are all saying, "Tim who?".
But it won't be.... they still hired his ass even after his tax evading ways came to light.
S&P...I must admit I am impressed. So that is what was behind door #1. Hmmm, I wonder what is behind door number 2.
About time 1 rating agency starting to be truthful to the public of this planet.
Too bad it's one in China. AA+ is still way too high.
+ dagong
Bang. Dagong. All day...
Behind door number 2 was the tiger.
Door #3 had the gold plated winnebago with a magic gas tank that never needs refilling and a magic beer keg that nevers runs dry or gets warm.
Can we get a do over, please?
So the FED will monetize yet more UST, the fiat borne of same, to pay higher interest to the other foreign buyers and of course to subsidize the overall shortage of UST buying?
How far am I off?
If they do this that means they have to downgrade everything the usa treasury guarantees. Agency bonds, the TBTF, the stock market. S&P JUST DOWNGRADED THE ENTIRE USA ECONOMY!! BREEHEEHEE!!!!!!!!!!!!!
Wow, buzz, never seen you so.....giddy.
That's a pitifully tiny downgrade.
Now watch them immediately change all requirements about holding only AAA. They'll change to "AAA or government". Bunch of BS. But hopefully we'll at least have a couple 1000 point drops on the dow Monday and Tuesday, as well as a couple $100 surges in gold as regular people realize fiat is fake is fraud is fiction is fantasy is fractional-reserve toilet paper.
ya know - they almost HAVE to do that (change margin rules on AA+) - otherwise.....
I agree, but it's also a start. Hopefully the masses start to pay some sort of attention to what's going on.
Full faith and backing of the US Govt.......
No such thing as a tiny downgrade in the reserve currency. If you've got the... well... whatever it is you've been promoting ready, you may as well strap in and blast off. If you would, please take some of our greatest hits with you for posterity.
So now we go down another few %ge points on monday morning to a big gain by the closing .
The real action Monday will be the bond market. I almost feel sorry for all the schmuck retail investors about to get an education in bond basics come Monday a.m.
"But they said on TV that the interest rates are going to rise."
"Yes. Correct. New issues of Treasuries will have higher interest rates because of the downgrade. You own a 10 year with a 2% coupon, that's why the price of your bond is down."
Trust me, there are a lot of retail schmucks out there who have sunk money into AAA safe US treasuries with super low coupons at a premium over the past two years who are about to get gang raped.
I'll be very interested to see what happens on Sunday night when futures open.
While I got out of my long T-note positions a couple of weeks ago, I'm not so sure there will be a rout. Sure there could be a knee-jerk sell off for a couple of days, but if Euroland keeps falling apart, I wouldn't be surprised to see a Treasury rally....despite the downgrade.
Takes guts to speak truth to power.
It's party time...................I got the music playing and getting the marshmellows ready to watch the show. Make sure you have your G.O.O.D plan set up...
B R E A K I N G N E W S !!!! ........
TAR BABY HAS HIP HOP BBQ S&P NOT INVITED DOWNGRADES US CREDIT
Film at 11
MAESTRO, SOME MUSIC PLEASE!!
http://www.youtube.com/watch?v=xNnAvTTaJjM
.
Burnin' Down the House --- excellent choice.
http://www.youtube.com/watch?v=-ALRLZQf42s
Luv it!
I'm breakin' away!
http://www.youtube.com/watch?v=A5o0skTQWIs&list=FLDEvQ20WRADo&index=190
i once had a "AAA" battery, now i've got a "AA" battery! never seen an "A" battery!
The less letters the bigger the battery of debt.
"A" Battery used in early radios.
http://www.radiomuseum.org/images/radio/ever_ready_co_ltd/alldry_battery...
46 million Americans on food stamps.
White House wants AAA+.
Chicago style thuggery didnt work????
Well, I too am compelled to admit that I didn't think S&P had the stones to do this - especially considering that Fitch and Moody's pretty much sold-out fully earlier this week.
Considering how badly they missed the whole "sub-prime" mortgage, CDO and MBS meltdowns this is probably many days late and many dollars short, but seriously can anyone, anywhere make the case that we've not had this coming since, at bare minimum, we went on a 3-year, completely unconstrained orgy of spending, stimulis and QE starting in SEP 08?
Fitch wanted to. I think I saw one of thier reps in an interview with maria bartriromo. very proper brit. smart. the only time he was shooting from the heart was (para) " ... Its kinda bizarre how you (USA) don't tax consumption in any meaningful way..."
A pox on both the bachmans of the world who run 501a/c 's to make people "not gay" and a pox on all the people on food stamps driving around $45k autos, who probably got told to get both the auto and food stamps by a 501a/c.
If I were the head of the S&P, I wouldn't be taking any plane rides for a while.
Nicely
NS that's so 1990's
Drones baby drones
http://www.sacbee.com/2011/08/05/3820058/faa-probing-news-corps-use-of.html
To: S&P Analysts & Management
From: America
RE: US Sovereign Debt Downgrade
Don't think for a moment that this sort of ballsy move absolves you for colluding with issueers to slap AAA ratings on thousands of crappy subprime CDO's, downgrading them only they hit 50 cents on the way to zero.
(Note that this move is as much a hit piece on Republicans, as a commentary on Obama's lack of leadership. Expect Team Obama to spin, spin, spin to pin the blame on the "crazy" "terrorists" in the Tea Party.)
"Don't think for a moment that this sort of ballsy move absolves you for colluding with issueers to slap AAA ratings on thousands of crappy subprime CDO's, downgrading them only they hit 50 cents on the way to zero."
The investigation starts on Monday.
FIRE!!!!!
http://www.youtube.com/watch?v=OgT2n1veQ7M&feature=related
Just to make things interesting, apparantly (according to the US Treasury of course) there is a 2 trillion error in the S&Ps projections - ha! See below:
http://blogs.wsj.com/marketbeat/2011/08/05/u-s-debt-rating-in-limbo-as-t...
Yeah, this came out after they revised the numbers. Even with better numbers, they still downgraded.
Wonder if foreknowledge of this downgrade contributed to the market tanking yesterday - the ratings agency were obviously & perhaps still are in bed with the participants (Goldman Suchs, MBIA, hedge funds, etc.) in the subprime mortgage crisis.
Trying to re-establish some credibility by stating the obvious.
Doesn't make sense, Treasuries were hot yesterday and yields went down. If this news had been leaked, I would expect Treasuries to sell off.
markets down 500 pts in a day with no real catalyst
super volatility follows the next day
only a tinfoiler would think that a select few had advance knowledge who then shared that the following day to a select few others
buy the news
An "oldie" but a goodie.
Jim Rogers: Ratings agencies clueless.
http://www.youtube.com/watch?v=vBOEiEaDKP8&feature=player_embedded
Congress needs to come back from vacation and fix this fucking mess. The American people should be outraged at all and most of all the King Clown prince of Chicago. I am pissed beyond words.
WOW! You mean congress can FIX this mess? I thought those fukkers could only make these messes.
IMHO congress should go ahead and take the rest of the decade off. Better still, they should have the stones to QUIT, go home, get honest jobs, and leave the rest of us the fuck ALONE. Period...
Well, Congress will come off recess to "deal" with the crisis by passing a law that no rating agency can issue a downgrade without the approval of a tax cheating Secretary of the Treasury.
uncle sam goes to AA:
http://www.youtube.com/watch?v=1ixB8IwUADw&feature=player_detailpage
and yes...the french are not far behind
Does anybody know what a downgrade would do to PMs? Everything's so irrational, that I wouldn't be surprised if investors flee back into paper initially, instead of a sure thing like gold and silver. Guess we have to wait for Ben on Tuesday to see if there is a hint of more QE on the way.
I, too, am having difficulty coming to grips on what exactly I think the markets will do next week. Like you said, the market hasn't been rational for quite some time so who knows what the hell will happen. Wouldn't be surprised to see the Dow +500 on Monday because "A+" is pretty much two As, if not more, so AA+ must be AAA at least. Maybe even AAAA, which means we've been transitorily upgraded forever. Super bullish.
Could there be a Bull Trap in the making?
no...not on Monday at least...the major indices traded in a giant range today and finished flat for the most part (doji) strap yourself in it's going to be fuckin nutballs
dupe lag
trip drunk
Most likely they will go up...and once everyone has their money on the table then they'll raise margin requirements in gold and SMASH!