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S&P Slashes US Growth Forecast, Says Current Crisis Is Worse Than 2008 As US At "Risk Of Default", Ridicules "Transitory"
First they cut the rating of the US, then the went and downgraded Google, now S&P is going for the "treason trifecta" by just releasing a report which literally takes the US to the toolshed. Among many other things, the rating agency just cut US growth for the next 3 years. To wit: "While July data finally showed a slight improvement in the U.S. economy, it's not enough to support expectations that the second half of the year will see a bounce in growth. We now expect to see an even slower recovery than the half-speed we earlier expected. We now expect just 1.9% growth in the third quarter and 1.8% in the fourth, to bring 2011 calendar year growth closer to 1.7% instead of 2.4% we earlier expected. We also downwardly revised growth expectations for 2012 and 2013, as a more drawn-out recovery is factored into our forecast." We wonder how soon before the realization that the US is in fact contracting will force S&P to downgrade America even further, a move which will force Moodys and Fitch to come up with a AAAA rating for the US in order to keep the weighted average rating at current levels. It gets even worse though as S&P now openly brings the 2008 analogy: "The markets' violent swings in early August resurrected fears of the market meltdown, such as the one in 2008 when Lehman Brothers went under and Reserve Fund broke the buck. Currently, the crisis is considered to be much more severe, with U.S. sovereign debt at risk of default. The low Treasury yields indicated that markets were expecting Congress to come to its senses and reach a deal. However, the wait and the last-minute deal, which left a lot to be desired, only increased worries that the government will do more harm than good. Confidence in the recovery and in U.S. policymaking has hit new lows. After U.S. sovereign debt lost its triple-A status and financial markets unwound, consumer confidence hit a 31-year low and manufacturing sentiment readings contracted." And the kicker: S&P, yes S&P, makes fun of the Fed, and specifically the "transitory" nature of the economic collapse: "Continued weak growth after sharply downward GDP revisions has made the "temporary argument" a less plausible explanation for the slew of bad news for the first half of the year. At least the GDP revisions make the persistently high unemployment rate make more sense. But the revised data also indicate a much weaker outlook than we previously expected. As the boosts from rebuilding inventories and fiscal stimulus unwound, consumer spending and housing couldn't cover the hole, because the former is still working off excess debts and the latter excess supply. The recovery comprised a first-half average growth of just 0.8%." And that is how you respond to endless scapegoating that now blames the S&P for the collapse. Look for S&P to make the FBI's most wanted list very shortly.
From S&P:
U.S. Economic Forecast: Still Treading Water
On August 5, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the U.S. to 'AA+' from 'AAA' and kept its negative rating outlook, which increased worries that the economic recovery has faltered. The downgrade and concerns that the eurozone sovereign debt crisis was spreading north to France caused markets to go into a tailspin last week. This likely forced the Federal Reserve to take more policy action, which helped calm markets.
However, while the market panic subsided, recovery concerns that helped launch it are still very real. After the recession officially ended two years ago, the outlook for growth is worsening and the U.S. economy is still treading water trying to stay afloat. The "temporary shocks" sound less convincing, even to the Fed, as an explanation of paltry growth during the last two quarters. The lack of underlying momentum was highlighted in second-quarter GDP report, where backward revisions showed not only how much worse the recession was, but how anemic the recovery really is.
While July data finally showed a slight improvement in the U.S. economy, it's not enough to support expectations that the second half of the year will see a bounce in growth. We now expect to see an even slower recovery than the half-speed we earlier expected. We now expect just 1.9% growth in the third quarter and 1.8% in the fourth, to bring 2011 calendar year growth closer to 1.7% instead of 2.4% we earlier expected. We also downwardly revised growth expectations for 2012 and 2013, as a more drawn-out recovery is factored into our forecast.
It is disturbing that policymakers do not seem to have the weapons or the political resolve to fight the economic crisis. Those policy problems are a large reason why we believe the economy is more vulnerable to another recession. Once again the Fed is willing to step in, just like it did in 2008 when Congress refused to pass legislation (including TARP), as markets spiraled out of control. But this time, the Fed is confronting the collapse with a sling shot, not a bazooka, so its measures will have less bite.
We are not surprised that in the aftermath of the worst recession since the Great Depression, the recovery would be slow and uneven. As history has shown, financial crises are often followed by prolonged recessions, and after that, a long bout of sub-par growth. Several studies measure just how much damage a financial crisis can cause, and how long it can last. According to these studies, economic growth will be slower than normally expected, which most people won't recognize as a recovery.
Just Like Old Times
The markets' violent swings in early August resurrected fears of the market meltdown, such as the one in 2008 when Lehman Brothers went under and Reserve Fund broke the buck. Currently, the crisis is considered to be much more severe, with U.S. sovereign debt at risk of default. The low Treasury yields indicated that markets were expecting Congress to come to its senses and reach a deal. However, the wait and the last-minute deal, which left a lot to be desired, only increased worries that the government will do more harm than good.
Confidence in the recovery and in U.S. policymaking has hit new lows. After U.S. sovereign debt lost its triple-A status and financial markets unwound, consumer confidence hit a 31-year low and manufacturing sentiment readings contracted. While some hard data, such as the stronger-than-expected July retail sales and recent jobs report, show that not all news is bleak, the preponderance of evidence to the contrary explains the sour moods. Though we still expect weak growth, not a recession, the data indicate a more drawn-out, painful recovery than the half-speed one we earlier expected.
Continued weak growth after sharply downward GDP revisions has made the "temporary argument" a less plausible explanation for the slew of bad news for the first half of the year. At least the GDP revisions make the persistently high unemployment rate make more sense. But the revised data also indicate a much weaker outlook than we previously expected. As the boosts from rebuilding inventories and fiscal stimulus unwound, consumer spending and housing couldn't cover the hole, because the former is still working off excess debts and the latter excess supply. The recovery comprised a first-half average growth of just 0.8%.
The storms that blanketed the U.S. this winter kept people away from the mall and Japan's natural disaster supply-chain disruptions can only be partly blamed for lower sales. More importantly, the consumers have been squeezed by higher commodity prices which wiped out any benefit of the payroll-tax credit. The high unemployment rate, at 9.1%, kept people cautious, worried that even if they have a job, they may lose it next week. Amid sluggish job market and stagnant wages, the wallets are empty after people fill up their gas tanks.
There are some signs that the second half of 2011 won't look as bad as the first; however, anything slightly better than a 0.8% average growth rate is not impressive. The jobs market will likely remain weak into 2013, so housing will remain soft. We expected some improvement in the jobs market to help revive household formation to absorb excess supply. So without that jobs-related boost, housing won't contribute to the recovery. However, maybe it was retail therapy after all the sour news, but the July retail sales data showed that consumers began to spend more. Total sales jumped an upbeat 0.5% over June numbers, and it's not because of a hefty price tag at the pump. Excluding autos, gas, and building materials, sales were up 0.3% in July after a 0.4% increase in June (sharply revised up from a 0.1% gain). This comes while the government payrolls report posted a better-than-expected 117,000 job gain and the unemployment rate slipped to 9.1% from 9.2% in June. The results by no means suggest that we are in the clear. But at least the economy is inching away from a double-dip recession.
Ready To Take Another Dip?
Does the Great Recession have company? Many think that another crisis will follow the Great Recession. The global stock-market plunge reflected fears that a double-dip recession is coming. The bad news during the last few months suggests that these fears may not be unfounded. The supply shock due to the earthquake in Japan, climbing energy prices, and massive storms have certainly contributed to the slowing U.S. economy. But even the Fed admitted that those events alone may not explain the extent of the decline. As I said in my last monthly forecast report, if a couple of one-offs can do so much damage, it shows just how fragile this recovery is.
As the economic data continue to disappoint, we have become more worried about the strength of the recovery. We have been expecting a half-speed recovery for some time. However, the onslaught of dismal news puts even that forecast at risk. We now expect below-potential growth through the end of next year. And while the numbers are still positive, the smaller they get, the greater the risk of dipping into another recession. On August 5, we increased the chance of a recession in the next year to 35% from 30% in June, and well above the 25% odds we expected in March.
Given a lag in the release of economic data, which is often revised, it's hard to identify a recession in real time. It takes the National Bureau of Economic Research (NBER) many months to announce the start of a recession, and in case of the 2001 recession, it ended just when NBER declared that it began. But markets still keep trying to predict. There are a lot of rules of thumb that the investment community uses to signal a recession. One, backed up by a Fed study, says that when real GDP growth drops below 2% year-over-year, a recession follows within a year roughly 70% of the time. Second-quarter GDP growth was 1.6% over last year, so we have a little more time. The three-month unemployment average rate is another important indicator. Since the Second World War, if unemployment rate climbs by more than 0.3%, a recession has always followed. We would need the three-month average rate to reach 9.3%, in order to top the 8.9% trough in March, to say with more certainty that recession has started. Given the July figure edged down 0.1% to 9.1%, we still haven't arrived at that point. While a market sell-off is also watched, a plunge in stocks during the past three weeks doesn't necessarily mean a new recession (the economy avoided a recession after the stock market crash of 1987). However, amid the fragile economy, the shock of another stock market drop and resulting loss of wealth could be the tipping point.
Trying to use various rules of thumb to determine a coming recession can be dangerous. And in this case, where we have a very sluggish recovery, the normal rules may not apply. We may still be in a sustained, though weak, recovery with intermittent declines bringing the growth rate so close to zero, which would imply that the economy is falling into recession. But the signals are disturbing, and at a minimum they show an economy with very feeble growth prospects.
With the odds of a double dip at 35% and climbing every time stock market sells off, credit spreads widening, and consumer confidence dropping, when does a double dip becomes the most likely outcome for the U.S.? As the recovery is on a precipice, there are a few things to watch. Another shock to the economy, even a mild one, could push the recovery back into recession. We'd watch whether the deterioration in financial conditions persists or if leading economic data worsen. Another plunge in the stock market, a deeper contraction in already weak consumer confidence levels, one more spike in initial claims that holds, or sub-50 ISM readings for several months would push the recession gauge to the brink.
It's Only Just Begun
Why are we surprised that in the aftermath of the worst recession since the Great Depression the recovery would also be slow and uneven? As history has shown, financial crises are often followed by prolonged recessions, which is followed by a long bout of sub-par growth. Several studies measure just how much damage a financial crisis can cause and how long it can last. According to these studies, recoveries from financial crises are typically a hard climb. The economic growth will be slower than normally expected and won't be felt as a recovery by most.
The McKinsey report (Debt and deleveraging: The global credit bubble and its economic consequences, 2010) found 45 episodes of deleveraging since the Great Depression, of which 32 followed a financial crisis. The types of deleveraging the report documented included "belt tightening," massive defaults, high inflation, or "growing out of debt" (through strong economic expansion, a war, or a "peace dividend"). The report found that the most common type of deleveraging after a major financial crisis is the "belt tightening" scenario, which is what the U.S. is now experiencing.
The McKinsey report said that if today's economies were to follow that path, they would experience six-seven years of deleveraging where the debt-to-GDP ratio falls by about 25%. As the debt is paid down, GDP growth could be slower than it would have been otherwise, unemployment consistently high, and inflation low (or deflation for some), which unfortunately sounds all too similar to our current situation. 
A paper by Carmen M. Reinhart and Vincent R. Reinhart (After the Fall, 2010) put numbers to the news. According to their study, during the decade following a severe financial crisis, real per capita GDP growth rates were "significantly lower" with the median post-financial crisis GDP growth declining about 1% in the five advanced economies. The study also found that in the 10 years following a severe financial crisis, unemployment rates are significantly higher than in the decade preceding the crisis, with the median unemployment rate for the five advanced economies of about 5% higher. They wrote that "In ten of the fifteen post-crisis episodes, unemployment has never fallen back to its pre-crisis levels, not in the decade that followed now through end-2009." These depressing results support our expectations that the U.S. unemployment rate will remain above 8.5% through 2013 and not reach the estimated 5.5% natural rate for another 10 years.
What's Left In The Tool Box?
In a sharp departure from the usual protocol, the Federal Open Market Committee (FOMC) last week assigned a time frame to its "extended period" phrase. While the statement had the usual caveats, which gives the Fed a way out, it indicated that economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013." Nevertheless, it's important to note that there were three dissenters to that opinion, which could lead to an interesting struggle between the doves and hawks for the remainder of 2011. In addition to the Fed's pledge to essentially offer free money to markets for a few more years, the FOMC went on to say that it "discussed the range of policy tools available…" to strengthen the recovery, and "is prepared to employ these tools as appropriate."
The statement noted that the Committee "now expects a somewhat slower pace of recovery over coming quarters" than it did before. The FOMC also finally indicated that not all the weakness in economic growth was transitory. And to no one's surprise, the Committee said that downside risks have increased, suggesting that more easing is likely. We expect no rate hike from the Fed before 2014. Since the Fed has already played its best hand, it will likely attempt another program of quantitative easing similar to the last one, possibly later this year. Both measures should boost financial conditions, though they will only modestly support the economic growth. They will, however, prevent the risk of slipping into outright deflation. Given that the Fed has fewer effective ways to stop deflation but has numerous ways to tighten policy, the Fed will likely project the outlook to remain weak and fight deflation.
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ouch, bitchez
buffett, bitchez
http://azizonomics.com/2011/08/17/job-creation-101/
Not surprised if our government, who endorses hit-men style executions for people they do not like (scientists in Iran) and uses outright public assassination attempts on leaders we dont like, starts using such methods in the United States. Watch out S&P officers, I would lock my doors at night, make sure you are out when your hotel maid arrives, get rid of personal computers lest they be found to have child pornography on them (downloaded remotely by NSA), and start driving the speed limit (lest an errant shot hit you from a highway patrolman). Watch "enemy of the state" and get informed. You might think about relocating to an island nation and changing your name.
Okay, S&P didn't just grow a pair out of nowhere. I would like to hear some intelligent ideas about what is really going on here.
They are simply stating what everyone knows to be true. I guess that is why it is so shocking.
This is not the America I grew up with, nor the America one can love. What "special" characteristics can we claim anymore? Nothing admirable, only most trash reality television shows with ho's like Kardasians.
They have known this for years. The question is why did they grow a pair now. I'm talking about a power shift way at the top.
Somebody has to be the bad guy, otherwise the facade appears obvious, even to the herd.
I've explained this until I'm sick of my own words: S&P drew the ratings agency short straw. Simple.
It's just the next weapon being set-off in the scheme truth. No sudden shift here. Heck, Obama was being prepped for this role since....childhood maybe? All part of a scheme. The rating agencies, so thoroughly discredited during the past scandals, suddenly become relevant as they rate national debt?
That might be the real joke/tell.
ORI
what's your website again?
Good one. I think this is the only comment that didn't carry the link!
I was actually being serious. I'm sure I can track it down if that's the case
http://www.zerohedge.com/users/oh-regional-indian/track
Feud with Hulk Hogan; WWF Championship (1987–1988)
André agreed to turn heel in early 1987 to be the counter to the biggest "babyface" in professional wrestling at that time, Hulk Hogan
http://en.wikipedia.org/wiki/André_the_Giant
classic match, with no other than Jesse the Body providing color commentary:
http://www.youtube.com/watch?v=R9UDmjtU6LM
+++++++++++++++++++++++++++++++++++++++++
I watched that match as a Kid! Loved it then and still Love it NOW!
JDub, saw it live. to feel the energy of 90K+ people erupt in unison was an amazing high. to know that energy was created from a 'script' was quite educational, but did nothing to diminish the fond memories of the event itself. fun day it was.
wrestling is real! fuck you man! its real!!!
after they take away santa and the easter bunny, we're left with a shitty tooth fairy account, which, when drained, leaves us with professional wrestling!
OT (L0L) jay-dub, how about this for a marquee headline?
S&P Seeks "Plausible" Explanation For SLEW of Bad Fuking News, BiCheZ!
Easy.S&P is trying to curry favor with their customers: Wall Street banks and HEdge funds, who are their only paying customers. Their paying customers have bet HUGE sums on a rise in US debt interest rates. John Paulson alone has already lost, on paper, hundreds of millions of $$ on the bet that US debt rates would rise. But. US Debt rates don't rise as long as the US is considered the "flight to safety" destination, and as long as Bernanke keeps buying our own debt via QE1,2,3.
It's an extortion attempt, nothing more.
S&P is a useless, discredited, obsolete organization, filled with some severely highly paid lackeys WHO ARE PAID BY WALL STREET. They would cease to exist if the plutocrats on Wall St didn't continue to authorize payments to them. Which they do. Every month. Even though they (Wall St) is now ALSO paying THEIR OWN ANALYSTS to do the EXACT SAME THING S&P CLAIMS TO DO using THE SAME INFORMATION in addition to CDS spread info.
The S&P "ratings" became pointless once Credit Default Swaps were created which accurately reflect REAL MARKET SENTIMENT about the actual risk underlying any issue. In 2008, the CDS for Lehman debt, for example, were trading through the roof all while S&P maintained a triple AAA rating on Lehman up to the actual minute of their collapse.
Everyone knows this, including the people who are payed exhorbitant sums to "run" S&P. These guys are fighting for their financial lives. They're willing to do anything to hang on just a little longer.
A bought and paid for MSM? That's very American, these days. Even the British media occasionally tells the story, but in the states... nah.
Tellingly, this article isn't on the front page of Marketwatch, and no doubt, wasn't even mentioned on CNBC.
the powers that be have realised that the "kissinger/nixon solution" ( free oil from the arabs, free goods from china, all for worthless paper) is sucking the life out of america. this is why rick perry the "establishment candidate" is sounding more and more and more like ron paul. the billionaires (other than steve jobs, warren buffett and maurice strong and a few other mao admirers) don't want to live under chinese vassalage.
koch brothers 2012 — putting manufacturing, job creation, and anti-communism first.
I'm not sure. TPTB have known this sucks the life out of america and have been doing it on purpose. There is no real risk of living under Chinese vassalage. The reason the establishment sounds more like Ron Paul is so that they can trick people into voting for them and then not actually doing any of the things Ron Paul would do.
Something is still missing.
I think the reason the status quo has continued is because it's a free lunch. And nobody loves free lunches more than big, fat, powerful oligarchs. And the dumb consumerist superficial middle classes love their slave goods free lunch at Wal Mart almost as much.
And, as anyone who has read the history of Ancient Rome knows, bread and circuses is a killer.
In that analogy, Ron Paul is Cato. Let's hope first a trickle, then a torrent, then a stream of TPTB listen to Cato this time. We don't want another thousand years of barbarian rule.
By the way, read this to understand the very real risk of America falling under Chinese vassalage in the next 50 years, especially the comments from FO SHO and joebob:
http://azizonomics.com/2011/08/15/why-qe-didnt-cause-hyperinflation-2/
Thanks for that link - there is a lot of good info there. We do have to be careful because if the Chinese dump our debt we'll be in trouble. However, I think China is also in an awkward situation because of our military power. I don't think they want to mess with us any more than we want to mess with them. A vassal dependency?
What can America do in a war against China beyond MAD? I guess they would stand a pretty good shot fighting a conventional war over the pacific, but given that both sides would be nuclear-armed, there would be massive tension and potential for a nuclear overspill from day one. Indeed, even in a conventional war, America would could end up outmanned and outmanoeuvred. But there are bigger potential problems:
The American economy would experience a massive crash if China banned all exports and diverted a sizeable amount of domestic production to military hardware (they're communists, remember, they can do that — and i'm sure Steve Jobs would be happy to lend his beloved CPC a hand). If America wants to avert a massive economic slump, and avert MAD, they have one choice: hand over what China wants.
And as so many of us on this forum have put it over the years, that is Gold, Bitchez.
military establishment who can read the tea leaves and realize if they don't get the troops home soon, they'll lose their jobs and power to some buffoon in the UN or NATO? Trying to force DC's hand...maybe a bit out there.
edit: I have no idea but I think some powerful interests must have given the green light to S&P, I don't think they have death wishes.
I think this could be close. You would need a huge power, like the military, trying to take back control in order for S&P to make this call. If it was the military though, couldn't they just choose to come home and stop this nonsense? That seems to be the easier solution, so I'm not sure it's the military. Who else could it be?
Could be the Oligarchs feel they are prepared enough for the coming chaos and are ready to create their new order. This could be they have decided it's time to press the "detonate" button, collapse the US and everyone else, and are ready to roll out the one world government. The only real way to know is to wait for the dust to settle and see what emerges.
If we get see the end of globalization, rebuilding of the US industrial base, and a new commodity backed US Dollar. Then what I consider to be the good guys did it and won.
If we see a North American Union with a new constitution, a global currency, and a new global central governement. Then the bad guys won and God help us all.
It's interesting in itself that the only way to know is by the outcome, when it's too late. I guess that just shows you the dire situation we're in.
You're right about different bankster faction. Dr Webster G Tarpley (www.tarpley.net Twitter.com/webstergtarpley ) says it's a hit job from England (the City where Rothscum and Co hang out). He says that Indian guy from S&P is a Brahmin (the banksters grew their opium in India more than 100 years ago). He also says that other dude from S&P is a London School of Economics snob.
Besides, who else but the most powerful banksters would dare do this? I think it's the HSBC crowd -as opposed to the Goldman Scum crowd- who is not interested in risking their investments in Asia and who would lose their juden fetzen power (a major blow) if gold nukes were deployed.
Yes, this is the type of info I was looking for. Do you suppose the hit was part of the "plan" or was it a result of some bickering amongst factions? It's hard to know how tight-knit these groups are in reality.
I think there is dissent within their ranks for the simple reason that their interests are not monolithic. Remember when Stanley Fisher was proposed for head of IMF? Then they turned him down? To say nothing about that farce with DSK. In that instance I think it was the Americanized banksters who were defending their dollar -against the SDR. No, I really think there is tension within and this S&P hit job is to show the pols in DC (who would lose their parasitic existence if they cut the bread part of bread and circus) who really runs the show.
The basic problem is that printing money shoots up inflation in other powerful countries and destabilizes these regimes. The City banksters have major interests over there (bigger than in the hulk of the us economy) and those regimes will pull the golden trigger before losing their own cushy existence.
What do you think?
We would have to assume that the powers at the top (in London or anywhere else) were okay with putting Bernanke in place. Bernanke could choose to stop exporting inflation. Since this actually has nothing to do with US politicians, I'm not sure this message was directed at them necessarily.
Everything was going so smoothly for so long with TPTB that it's hard to imagine they hit a stumbling block in their plan. That's why I'm not 100% sure why this is happening.
I always said when the sharks start eating each other, thats the beginning of the end. Allstate suing GS, S&P sniping at the master's hand. Fractures in the factions.
.
one of their analysts accidentally stumbled across zerohedge while searching for "hedging zero bonuses" and liked what he read?
lol
Maybe this is to manufacture another crisis to allow the government to ignore even more laws?
Or maybe the command-and-control structure is collapsing because everyone in the know is bailing out.
Maybe a combination of both.
Yeah, I think this might be the best idea I've seen so far. Either a little manufactured chaos or a little real chaos due to end game fighting at the top.
Or it could be major false flag on the way. Like Rumsfeld admitting they "lost" 3 trillion the day before 9-11.
this criminal cabal you call a gvt has never needed an excuse to ignore law.
When they feel like it they pay a lawyer to draft an opinion which then gets signed in secret. What law? BWHAAAAAAAAAAAAAAAAAA!!!!!!!!!!!!!!
it's something tyler said
isn't it the current trend - big corpoarations are realizing that they don't really need the us; they are scraping us off thier boots
I reckon they know they are going to be prosecuted
timing impeccable: mini-crash for US economy = perfect QE3 justification.....
How's that for a conspiracy theory?
Dow dips under 10K right before Aug26.
DirtMcDirtDog!
@ thetruth Maybe the S&P sees the writing on the wall (that the Obama Administration is a total failure
and soon to be powerless bunch of losers ) and has decided to align itself with the incoming tide of Pro-growth,
Limited Government, balanced budget, Tea Party leaning candidates.
@thetruth 12:56
Agree.
Tactically:They know they cant hold off an equities plunge any longer...so blame CONgress, S&P and Obama.
Strategically: They know Obama will therfore lose in 2012...so no more QE...which might help their new wonderboy Ricky Perry take over at Prez.
Coincidence?...Dallas Fed boss is against QE3...which causes market fall, which causes Perry win in 2012
They being TPTB ie shadow govt eg money center banks
Tou got that right. I guess S&P decided to go for the fences here before the Senate Banking Committee comes back into session and decides to shut them down.
man, your hat is on pretty tight there.
We've been in the same crappy situation since 2008. S&P didn't come up with brand new analysis one day and see the numbers were suddenly poor. That means there is another piece of the puzzle.
Hey Eagle, the hotel maid was so obvious a set-up I cannot even believe that it's gone unnoticed. Even if it's just one other person, that makes me feel more optimistic.
Don't forget the arrests for drugs on person trick either.
Yes, that too, tried and true by the Russians.....
Must be movie night, check out "Gulag" one of my favorites.
Are you saying DSK got Spitzered?
hell with the copters , fire up the hellfire DRONES baby.
My favorite sentence of the report:
"Another plunge in the stock market, a deeper contraction in already weak consumer confidence levels, one more spike in initial claims that holds, or sub-50 ISM readings for several months would push the recession gauge to the brink."
All of the above will be a self-fulfilling prophecy.
Is that your opinion or that of your avatar? I refer to the plunge and the spike.
but bernanke says there is defaltion so you can add those %'s above those growth numbers....
unless he's wrong... but he's never wrong right? because if there where any inflation... those numbers.... would be not so bad but more like really bad...
BUT HEY! ALL WILL BE WELL!!
SD, almost at the exact moment you were typing in those words above, the following came in:
Obama says 'there is nothing wrong' with US right now"A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his." - Ronald Reagan.
I guess conservatives could replace Carter with Obama. I personally don't think it'll matter one bit - both parties are controlled by Wall Street.
duplicate--oops
Bout fucking time
I'm getting the feeling sub $40 silver is nearing an end now
Its over bitchezzzz!
Wonder how many will say that NOBODY saw this coming... again. Amongst economists I mean. Everyone else sees it.
This will be good for bondz bitchez.
Wow - this pissing match is getting ugly!
"But... But... US CANNOT DEFAULT 'Because we can always PRINT MONEY to pay any debt'"
Your conclusion is based upon a false premise. The US gov, which is highly in debted, currently does not have control of printing money and therefore could default if it cannot raise cash. Printing money decisions were given to a private company. If the private company will profit from a gov default, the US will default. If the private company will profit from money printing, it will print money.
That seems like sarcasm Doc...quoting Alan Greenspan.
Dr. No,@ 12:45
True,( but that control can be taken away for the Fed ANYTIME we want to take it) but if we TAKE control away from the Fed, and give it back to where it belongs, we can print our own.....................and they can go piss up a tree.
And, eventually, China will, in a gala ceremony at the white house, receive one single hamburger, which will be the equivalent value of all the trillions we owe them. Sorry, they'd have to pool their resources with Japan to get fries with that.
ChartreuseDog ,
IF we (Congress, and the Treasury ) took back the authority to value/coin our own money.
Your (meant to be humor), could very well happen...................(<;)
They could make ONE bill/Coin,printed/coined, with the entire debt inscribed on it,and say "PAID IN FULL".
Of course that's Dreamland stuff..........because we do not have the Nads.Nor the WANT to.
Since the PTB have an Agenda..........and it's working to a"T".
The entire Scenario, reminds be of a HUGE party,where ONE Hooker is brought in, and takes it from everyone there.
WE, are the HOOKER.
Printing money is a form of default, for obvious reasons.
Treason Trifecta? What about a Quad - I'm waiting for them to ding the Golden AAPL...
Bravo S&P! finally some smart people start to challenge the mad man Bernankprinter.
oh my. here it comes
It almost looks like S&P has a death wish and wants to get "Bin Ladened" at 3 AM. Since that doesn't make much sense, is this all play acting?
If one is to believe that the financial system is, and pretty much always has been, manipulated under the guise of national security, a very valid supposition, why do we believe that the S&P is acting independently here?
The rating companies have been part and parcel of the Ponzi for decades. Do we really think the S&P would be allowed to roam free now?
Perhaps S&P is working in collusion with the banksters? Banksters getting inside info about what S&P will say and when it will be said...
Frontrunning the releases has to be profitable... and we know that bankers do not care if soverigns are destroyed as long as their bonuses keep coming...
If that's the plan it aint workin'.
The Ponzi empire is losing its support base
At some point self interest trumps the cartel...
More scare mongering to keep the sheeple in line. They want to drag the recession out flogging the middle class with stagflation and teach them a real lesson in life. They have eaten cake long enough, now they need to pound sand. It also opens the door for "innovative" solutions as the problems become "dire". I'm sure those won't benefit the banking complex.
maybe they think uncle warren will buy them too so he can control the ratings process completely
Buffet buys stocks last week - when they are "on sale"
Wells Fargo says gold ina bubble set to burst a week later...
Wells CFO leaves months ago on whim..no questions raised...smooth transition
Obama has said he is going to create a new job creation program and he will announce after Labour Day. Maybe this is related somehow? Could another stock market crash play into people loving his new plan?
American people (Charlie Brown) to Obama (Lucy): Could you set that football up again? I want to take another run at it.
http://finance.yahoo.com/news/Investors-Downgrade-SP-Buy-bloomberg-29470...
Raid the S&P headquarters immediately! They're probably also selling raw, unpasteurized milk to willing customers!!!
Raid the S&P headquarters immediately! They're probably also selling raw, unpasteurized milk to willing customers!!!
Right next to a kid's uncertified lemonade stand as well!
Yes, no raw milk, no willy-nilly unlicensed lemonade, no incandescent lightbulbs, but we have the freeedum to chose who runs the country.
Riiiight, that's a good one.
Once again the plan has always been to have an economic downturn so the next guy gets (s)elected as the "Great White Hope".
Next guy is the one declaring martial law and using Gun control. All in tne name of stabilizing the US.
One the positive side Obama probably gets to head the UN. Clinton became damaged goods so was useless.
Gully F @ 12:44
"Next guy is the one declaring martial law and using Gun control."
Maybe so, but WE will not forget the Kenyan who put US INTO THAT scenario.
Gun control is hitting what you AIM at.
Really all of them are just puppets for the oligarchs. Rothschild, Rockefeller, Warburgs, Jamie Dimon, Hank Paulson, etc.... They are the ones to blame.
Yep. I think None Dare Call it Conspiracy was the first to mention the plan to lower the US standard of living while raising that of the rest of the world.
And here we are.
Yet we are expected to blame the puppet of today, or yesterday and ignore the puppeteers with obvious strings.
Yup, its all S&P's fault. Just like its all the short sellers' fault.
How long til Michale Moore tells Obamugabe to arrest the members of the S+P again?
seems like the banker cabal has shifted into the next phase of operations. will be interesting to see what direction they take things. First up, it seems kosher now to attack the FED, expect to see more of that.
I'm in agreement with a previous ZH poster...Pan Galactic Bond issuance is the only answer!
The report "literally" takes the US to the toolshed? Hmmmmm, I'm trying to picture this one.
You'd expect "woodshed" instead, but in a sick and twisted way, this is right. Just picture Dexter wrapping the US in Saran.
Nah, they are done with wood , they are going for the giant spiked metal ,,,,,um you know..........tool.
Truth contagion risk is increasing.
...and there is no escape.
Ron Paul and local economies in 2012!
are we at War with the S&P......sure seems like it........and looks like they are winning
Who's "we?"
He has a mouse in his pocket
or a turd.
i guess none of you live in the USA
Whats with all this truth! They'll spoil the Kool Aid if they keep this up! The nerve of these people, questioning Timmah and the crew... ;-)
At least a part of our gold is savely stored at the FED building. Nothing to worry about.
Uzzervize ve'll cut off the chonson of Bernanke!
Aerial bombing to commence in 5,4,3...
Lets look at the source.
This analysis is being given to us by the people that rated garbage grade mortgage securities as AAA.
What is their real motivation? Create more volatile market conditions to allow their real owners to make more money perhaps? How about further undermine the dollar and help pave the way for a single global currency (if you are into the global conspiracy)?
Either way, you can bet whatever you want that these a**holes are motivated by some factor other than altruism.
Sho you right, Bd1. What ever helps the fascists take over is A-OK. That damn resiliant market needs another shove.
FBI list my ass. We are talking CIA, NSA, and Spec Ops. At least BATF will sell them some cool guns.
So why did S&P finally get a conscience?? I still believe that they are firmly in the control of their masters. They missed all of 2008. Why are they to be trusted now?
the real issue is not what S & P did, it's what happens when the other ratings agencies come on board. so far Fitch has given some pushback (you can almost smell that one, being the smallest or least known of the agencies, Moody's is Buffetts, and so keep an eye on what Warren is saying and doing) Now S & P has cut their GDP numbers, which puts more pressure on the other do to do something, and I suppose their corporate heads will be feel the need to fall in line, at least somewhat, especially if one of the two, Fitch or Moodys downgrades US debt first, it makes the other one look like the weak sister. This is a matter of psychology right now,, S & P took the bold step, and now they doubled down on the bet. You see where this is going?
Have you been asleep for the past 3 years? How is the other ratings agencies coming onboard with S&P's assessment (Probably the first realistic one I've seen from them) the main issue? S&P, Moody's and Fitch lost all credibility when they sold rainbows and unicorns right up to the moment of Lehman's collapse 3yrs ago and since. They have been derided as either nothing but preening critics or fanboys on a par with judges on American Idol by serious investors - more in love with themselves and their celebrity status than the purpose for which they were created: Sober economists and accountants who should have processed the raw data into digestible information and knowledge to investors without prejudice, and clearly stating any conflicts of interest. NONE of these 3 agencies matter anymore because they are tainted by misinformation they sell on a daily basis and being the mouthpiece of anyone with the largest wallet, so whether the other agencies come onboard with S&P's assessment is not relevant.
Credibility is all a rating agency has, and everyone now knows that they are guilty of fraudulently upgrading bundled toxic securities which were sold to unsuspecting investors around the world. They are like restaurant critics who took bribes to give great reviews to cuisine which ultimately gave everyone food poisoning. A diner would have to be insane to trust them again UNLESS they actually started doing their job properly to regain their reputation as reliable providers of information with integrity.
Unless something else is in play here (There are some very plausible theories on this page), I suspect that S&P decided to do their jobs properly for once to survive the next few lean years. Pointing out the bloody obvious problems in the economy which happens on a daily basis on ZH is NOT a bold move or a bet. It's their job. I don't give a shit whether Moody's or Fitch follow suit, because they no longer matter to anyone. I still don't trust S&P, but if they keep on providing information and assessments that aren't outright lies, then they might have a chance to regain trust with investors.
Its also like hanging a horse thief, tends to make Christians out of the rest. In this case the S & P downgrade was voluntary, but the debt holders knew there were being rustled. I see Fitch downgraded some corporates. Tough time to think you're an independent ratings agency, when you followed the leader in 2008, and you refuse to follow the inevitable reaction to that.
I wonder how Robber Warren's long-duration equity index put contracts are doing?
Their economic data estimates for 2014 and 2015 still look optimistic. I wonder what industries they think will be hiring so many Americans over the next 4 years.
Eric Sprott sells gold, buys silver
http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/eric-sprott-retreats-from-gold/article2132411/
Venezuela to nationalize gold Industry
http://www.theglobeandmail.com/report-on-business/international-news/latin-american/venezuela-to-nationalize-gold-industry/article2132413/
S&P? Are these the same people disparaged for years for being a member of the status quo? They've really grown a pair, either that or they've developed a sudden death wish.
The last tool in the box not mentioned above is gold confiscation, which is not as far fetched as it may appear. The last countries to do this (Albeit it was strictly voluntary as a patriotic duty) was South Korea and Thailand during the Asian tigers crisis in 1998. I'd say they came out of it rather well, although their debt figures were not anywhere near the present astronomical quantity in the US and EU.
Finally, S&P is on the mark with this. I'm in retail and sales are far worse now than in 2008.
Obama response:
Yo S&P STOP PICKING ON ME and shit.Wait a minute! Obama says he has a new jobs plan that he will announce the second he gets back from his $50,000/week trip to Marthas Vineyard. He said so from his Canadian made bus. He doesn't lie. He's half-black. And S&P's analysts are a bunch of racists...
They make buses in canada?
WTF?
Almost Solvent, @ 13:12
They make buses in canada?
80-90% of most American vehicles parts, or entire vehicle is made in Mexico, or Canada.(and railed in,w/few exceptions)
Americans just ASSEMBLE the parts........................on the majority.
For all of you that own a GM vehicle for sure, check the inside door panel(where the lock mech is), it will tell you where it came from.
Remember we manufacture very little....................
50k trip? putting up the secret service guys costs more than that. this is probably a quarter million trip all in.
This is fun. It is like GW is out leaking the shit out of everything he can remember. That isn't much, but it is enough to scare everyone because he won't remember that he was supposed to forget things. Then your current pres is running around trying to plug the holes. It looks like extortion is the only rule. And without a DOJ to do anything. rinse and repeat until bottle is empty.
wtf got into s&p
Well well well, hmmm, I guess since S&P is going to get a colonoscopy by the FED, treasury, SEC, Holder(heehee) MSM and the regime, might as well give them something to look at.
Moodis/Fitch rate USSA blue ribbon, gold plated, AAA+++++. Meanwhile S&P says:
"you thought the last report was bad? Take this!"
Go get 'em S&P, stick to your guns.
Why would the S&P buck the system that feeds them?
1. The status quo is not going to be around much longer
2. When the status quo blows up S&P believes they will need their credability to continue as a company into the future
3. Arrogance: Obama and company pissed in their cereal and they are fighting back, by bitch slapping the current state of the economy and those running it.
S&P is mainstream: someone will listen to these guys.
with this S&P statement, Perry calling out the Bernank for treason is all theatre, in which we all get a front row seat. oBLAHma is a one termer, it was planned as such, and to take the fall for the occuring collapse. Perry will win the presidentcy, (bilderberg gave him the o.k.) he'll come riding in on his white horse, but alas, in his right coat pocket, rests the last coffin nail. enjoy the show!
They've downgraded the future.
Who cares? The future has be sold.
I bet I know some folks who are OFF the XMas Party list!!
I can hear the teleprompter now, "Some entities within our financial system are hindering recovery, blah,blah,blah". Expect little Timmy to come out and say blah, blah, blah. Meanwhile, Biden's in China taking photos of his meals to post on yelp.
This could be off topic but it's important to anyone contemplating or have invested in mining stocks.
Chavez Preparing Government Takeover of Venezuela’s Gold Mining Industryhttp://www.bloomberg.com/news/2011-08-17/chavez-preparing-government-tak...
Every mine in every host country in the world can be subject to nationalization. The result would be the stock in that mine company going to ZERO.
Mines in the USA are not exempt from nationalization.
I think S&P is hedging their bets. They know the ponzi is going to end very badly, very soon, perhaps they are looking east to save themselves. I have said it before and will say it again, S&P will merge with DaGong to avoid the blowback from the .gov machine and to give DaGong who has been rating the US sovereigns lower than AAA for years more credibility.
What happens when the bitchezzz to non-bitchezzz posts ratio on ZH equals the gold to silver ratio?
Terminal redundancy is achieved.
I think these statements are being said to purposely create/keep the volatility churning in the market so to generate profit for a few folks.
They are going to break McGraw up into 2 companies
And so far...ONLY zerohedge has reported this. I guess the terminators want to finish their bs bounce back, oversold, short covering, bid lifting, crap first.
Fascist nation!
Off Topic --Solar Flare Activity Prompting NASA to Convene a News Briefing Thursday in Washington
http://www.myweathertech.com/2011/08/17/solar-flare-activity-prompting-nasa-to-convene-a-news-briefing-thursday-in-washington/
Increasing solar activity and the threat that coronal mass ejections (CME) pose to Earth has prompted NASA to convene a news briefing at its Headquarter building in Washington on Thursday afternoon.
Now that would be a market rally to see.
After all those Iphones are fried just think of the BOOM in the gdp!
WOW!!!!!!!!!!!
They say solar flares, but an EMP attack would suffice. My tin foil has is getting slowly plated with gold. Seriously, we've known for awhile that we are heading into a Solar Maximus. There's a good jobs program, electric grid infrastructure updating and shielding. Not just iphones, but think of med equip, traffic control, wastewater/water treatment, refinery, all kinds of process controllers that would be fried. I wouldn't want to be living next to an Etox plant when that happens.
So, now that "transitory" has been discredited, will they return to "muddling-through" or adopt a new idiom?
How could a US default possibly be bad for gold & silver ??