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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"

Tyler Durden's picture


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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Wed, 08/17/2011 - 12:39 | 1569234 doomandbloom
doomandbloom's picture

ouch, bitchez

Wed, 08/17/2011 - 12:56 | 1569288 legal eagle
legal eagle's picture

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.

Wed, 08/17/2011 - 12:56 | 1569317 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 13:09 | 1569329 legal eagle
legal eagle's picture

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.

Wed, 08/17/2011 - 13:11 | 1569379 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 13:16 | 1569401 NotApplicable
NotApplicable's picture

Somebody has to be the bad guy, otherwise the facade appears obvious, even to the herd.

Wed, 08/17/2011 - 14:06 | 1569634 RockyRacoon
RockyRacoon's picture

I've explained this until I'm sick of my own words:   S&P drew the ratings agency short straw.   Simple.

Wed, 08/17/2011 - 13:20 | 1569419 Oh regional Indian
Oh regional Indian's picture

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.



Wed, 08/17/2011 - 13:24 | 1569435 thetruth
thetruth's picture

what's your website again?

Wed, 08/17/2011 - 14:08 | 1569643 RockyRacoon
RockyRacoon's picture

Good one.  I think this is the only comment that didn't carry the link!

Wed, 08/17/2011 - 14:11 | 1569662 thetruth
thetruth's picture

I was actually being serious.  I'm sure I can track it down if that's the case

Wed, 08/17/2011 - 13:35 | 1569453 tip e. canoe
tip e. canoe's picture

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 Hogané_the_Giant

classic match, with no other than Jesse the Body providing color commentary:


Wed, 08/17/2011 - 13:51 | 1569543 JW n FL
JW n FL's picture


I watched that match as a Kid! Loved it then and still Love it NOW!

Wed, 08/17/2011 - 13:59 | 1569582 tip e. canoe
tip e. canoe's picture

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.

Wed, 08/17/2011 - 16:46 | 1570429 JW n FL
JW n FL's picture

wrestling is real! fuck you man! its real!!!

Wed, 08/17/2011 - 18:14 | 1570725 slewie the pi-rat
slewie the pi-rat's picture

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!

Wed, 08/17/2011 - 13:55 | 1569564 RUSirius
RUSirius's picture

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.

Wed, 08/17/2011 - 13:14 | 1569391 EscapeKey
EscapeKey's picture

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.

Wed, 08/17/2011 - 13:03 | 1569330 spiral_eyes
spiral_eyes's picture

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.

Wed, 08/17/2011 - 13:13 | 1569389 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 13:28 | 1569431 spiral_eyes
spiral_eyes's picture

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: 

Wed, 08/17/2011 - 13:54 | 1569555 thetruth
thetruth's picture

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?

Wed, 08/17/2011 - 14:28 | 1569726 spiral_eyes
spiral_eyes's picture

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.  

Wed, 08/17/2011 - 13:12 | 1569350 Global Hunter
Global Hunter's picture

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.

Wed, 08/17/2011 - 13:16 | 1569399 thetruth
thetruth's picture

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?

Wed, 08/17/2011 - 13:38 | 1569446 SMG
SMG's picture

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.

Wed, 08/17/2011 - 13:59 | 1569583 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 13:46 | 1569517 PaperBugsBurn
PaperBugsBurn's picture

You're right about different bankster faction. Dr Webster G Tarpley ( ) 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.

Wed, 08/17/2011 - 14:03 | 1569603 thetruth
thetruth's picture

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. 

Wed, 08/17/2011 - 14:20 | 1569694 PaperBugsBurn
PaperBugsBurn's picture

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?

Wed, 08/17/2011 - 14:53 | 1569828 thetruth
thetruth's picture

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.



Wed, 08/17/2011 - 18:05 | 1570703 Kali
Kali's picture

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.

Wed, 08/17/2011 - 14:24 | 1569656 PaperBugsBurn
PaperBugsBurn's picture


Wed, 08/17/2011 - 13:09 | 1569370 oogs66
oogs66's picture

one of their analysts accidentally stumbled across zerohedge while searching for "hedging zero bonuses"  and liked what he read?

Wed, 08/17/2011 - 13:11 | 1569378 caerus
caerus's picture


Wed, 08/17/2011 - 13:16 | 1569400 Koffieshop
Koffieshop's picture

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.

Wed, 08/17/2011 - 13:20 | 1569422 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 14:05 | 1569617 Hobbleknee
Hobbleknee's picture

Or it could be major false flag on the way.  Like Rumsfeld admitting they "lost" 3 trillion the day before 9-11.

Wed, 08/17/2011 - 13:50 | 1569532 karzai_luver
karzai_luver's picture

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!!!!!!!!!!!!!!




Wed, 08/17/2011 - 13:19 | 1569414 mendigo
mendigo's picture

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

Wed, 08/17/2011 - 13:24 | 1569434 trav7777
trav7777's picture

I reckon they know they are going to be prosecuted

Wed, 08/17/2011 - 13:31 | 1569460 vast-dom
vast-dom's picture

timing impeccable: mini-crash for US economy = perfect QE3 justification.....


How's that for a conspiracy theory?


Dow dips under 10K right before Aug26.



Wed, 08/17/2011 - 13:58 | 1569576 zorba THE GREEK
zorba THE GREEK's picture

@ 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.

Wed, 08/17/2011 - 14:16 | 1569680 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

@thetruth 12:56


Tactically:They know they cant hold off an equities plunge any blame CONgress, S&P and Obama.

Strategically: They know Obama will therfore lose in 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

Wed, 08/17/2011 - 13:12 | 1569381 gunsmoke011
gunsmoke011's picture

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.

Wed, 08/17/2011 - 13:14 | 1569390 Vergeltung
Vergeltung's picture

man, your hat is on pretty tight there.

Wed, 08/17/2011 - 13:18 | 1569410 thetruth
thetruth's picture

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.

Wed, 08/17/2011 - 13:22 | 1569425 mholzman
mholzman's picture

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. 

Wed, 08/17/2011 - 13:50 | 1569531 legal eagle
legal eagle's picture

Yes, that too, tried and true by the Russians.....

Must be movie night, check out "Gulag" one of my favorites.

Wed, 08/17/2011 - 15:33 | 1569991 RockyRacoon
RockyRacoon's picture

Are you saying DSK got Spitzered?

Wed, 08/17/2011 - 13:47 | 1569523 karzai_luver
karzai_luver's picture

hell with the copters , fire up the hellfire DRONES baby.




Wed, 08/17/2011 - 13:14 | 1569275 slaughterer
slaughterer's picture

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. 

Wed, 08/17/2011 - 13:40 | 1569501 falak pema
falak pema's picture

Is that your opinion or that of your avatar? I refer to the plunge and the spike.

Wed, 08/17/2011 - 12:58 | 1569324 Sudden Debt
Sudden Debt's picture

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...



Wed, 08/17/2011 - 13:20 | 1569417 slaughterer
slaughterer's picture

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
Wed, 08/17/2011 - 13:27 | 1569441 EscapeKey
EscapeKey's picture

"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.

Wed, 08/17/2011 - 13:38 | 1569476 quasimodo
quasimodo's picture


Wed, 08/17/2011 - 13:37 | 1569487 quasimodo
quasimodo's picture

Bout fucking time


Wed, 08/17/2011 - 13:41 | 1569503 Ag1761
Ag1761's picture

I'm getting the feeling sub $40 silver is nearing an end now

Wed, 08/17/2011 - 12:40 | 1569235 ShowMeTheTime
ShowMeTheTime's picture

Its over bitchezzzz!

Wed, 08/17/2011 - 15:35 | 1570010 RockyRacoon
RockyRacoon's picture

Wonder how many will say that NOBODY saw this coming... again.  Amongst economists I mean.   Everyone else sees it.

Wed, 08/17/2011 - 12:40 | 1569238 buzzsaw99
buzzsaw99's picture

This will be good for bondz bitchez.

Wed, 08/17/2011 - 12:40 | 1569240 Sophist Economicus
Sophist Economicus's picture

Wow - this pissing match is getting ugly!

Wed, 08/17/2011 - 12:41 | 1569241 Mongo
Mongo's picture

"But... But... US CANNOT DEFAULT 'Because we can always PRINT MONEY to pay any debt'"

Wed, 08/17/2011 - 12:45 | 1569265 Dr. No
Dr. No's picture

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.

Wed, 08/17/2011 - 12:54 | 1569301 Temporalist
Temporalist's picture

That seems like sarcasm Doc...quoting Alan Greenspan.

Wed, 08/17/2011 - 12:54 | 1569302 DosZap
DosZap's picture

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.

Wed, 08/17/2011 - 12:54 | 1569303 ChartreuseDog
ChartreuseDog's picture

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.


Wed, 08/17/2011 - 13:18 | 1569402 DosZap
DosZap's picture

 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.

Wed, 08/17/2011 - 13:07 | 1569356 g
g's picture

Printing money is a form of default, for obvious reasons.

Wed, 08/17/2011 - 12:41 | 1569242 Quackking
Quackking's picture

Treason Trifecta? What about a Quad - I'm waiting for them to ding the Golden AAPL...

Wed, 08/17/2011 - 12:42 | 1569244 YesWeKahn
YesWeKahn's picture

Bravo S&P! finally some smart people start to challenge the mad man Bernankprinter.

Wed, 08/17/2011 - 12:42 | 1569248 onlooker
onlooker's picture

oh my. here it comes

Wed, 08/17/2011 - 13:03 | 1569293 Cognitive Dissonance
Cognitive Dissonance's picture

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?

Wed, 08/17/2011 - 13:03 | 1569341 Snidley Whipsnae
Snidley Whipsnae's picture

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...

Wed, 08/17/2011 - 13:34 | 1569466 disabledvet
disabledvet's picture

If that's the plan it aint workin'.

Wed, 08/17/2011 - 13:06 | 1569353 carbonmutant
carbonmutant's picture

The Ponzi empire is losing its support base

At some point self interest trumps the cartel...

Wed, 08/17/2011 - 13:10 | 1569377 AngryVoter
AngryVoter's picture

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.

Wed, 08/17/2011 - 13:12 | 1569384 oogs66
oogs66's picture

maybe they think uncle warren will buy them too so he can control the ratings process completely

Wed, 08/17/2011 - 13:14 | 1569392 SDRII
SDRII's picture

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 questions raised...smooth transition

Wed, 08/17/2011 - 13:28 | 1569444 sleepingbeauty
sleepingbeauty's picture

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?

Wed, 08/17/2011 - 14:45 | 1569795 hettygreen
hettygreen's picture

American people (Charlie Brown) to Obama (Lucy): Could you set that football up again? I want to take another run at it.

Wed, 08/17/2011 - 12:44 | 1569254 Midwest Prepper
Midwest Prepper's picture

Raid the S&P headquarters immediately!  They're probably also selling raw, unpasteurized milk to willing customers!!!

Wed, 08/17/2011 - 12:44 | 1569255 Midwest Prepper
Midwest Prepper's picture

Raid the S&P headquarters immediately!  They're probably also selling raw, unpasteurized milk to willing customers!!!

Wed, 08/17/2011 - 12:45 | 1569264 Syrin
Syrin's picture

Right next to a kid's uncertified lemonade stand as well!

Wed, 08/17/2011 - 15:30 | 1569978 Esso
Esso's picture

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.

Wed, 08/17/2011 - 12:44 | 1569256 Gully Foyle
Gully Foyle's picture

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.

Wed, 08/17/2011 - 12:49 | 1569273 DosZap
DosZap's picture

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.

Wed, 08/17/2011 - 12:57 | 1569319 SMG
SMG's picture

Really all of them are just puppets for the oligarchs.   Rothschild, Rockefeller, Warburgs, Jamie Dimon, Hank Paulson, etc....  They are the ones to blame.

Wed, 08/17/2011 - 13:07 | 1569361 Gully Foyle
Gully Foyle's picture

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.


Wed, 08/17/2011 - 12:44 | 1569257 Stochdoc
Stochdoc's picture

Yup, its all S&P's fault.  Just like its all the short sellers' fault.

Wed, 08/17/2011 - 12:44 | 1569260 Syrin
Syrin's picture

How long til Michale Moore tells Obamugabe to arrest the members of the S+P again?

Wed, 08/17/2011 - 12:45 | 1569261 john39
john39's picture

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.

Wed, 08/17/2011 - 12:45 | 1569263 More_sellers_th...
More_sellers_than_buyers's picture

I'm in agreement with a previous ZH poster...Pan Galactic Bond issuance is the only answer!

Wed, 08/17/2011 - 12:46 | 1569267 Gold Man-Sacks
Gold Man-Sacks's picture

The report "literally" takes the US to the toolshed?  Hmmmmm, I'm trying to picture this one. 

Wed, 08/17/2011 - 13:05 | 1569347 randocalrissian
randocalrissian's picture

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.

Wed, 08/17/2011 - 13:57 | 1569573 karzai_luver
karzai_luver's picture

Nah, they are done with wood , they are going for the giant spiked metal ,,,,,um you know..........tool.





Wed, 08/17/2011 - 12:47 | 1569269 azengrcat
azengrcat's picture

Truth contagion risk is increasing.

Wed, 08/17/2011 - 12:52 | 1569294 RSloane
RSloane's picture

...and there is no escape.

Wed, 08/17/2011 - 12:48 | 1569271 LawsofPhysics
LawsofPhysics's picture

Ron Paul and local economies in 2012!

Wed, 08/17/2011 - 12:48 | 1569272 Seasmoke
Seasmoke's picture

are we at War with the S&P......sure seems like it........and looks like they are winning

Wed, 08/17/2011 - 12:50 | 1569282 Spastica Rex
Spastica Rex's picture

Who's "we?"

Wed, 08/17/2011 - 13:10 | 1569376 Almost Solvent
Almost Solvent's picture

He has a mouse in his pocket

Wed, 08/17/2011 - 13:30 | 1569452 andybev01
andybev01's picture

or a turd.

Wed, 08/17/2011 - 13:42 | 1569506 Seasmoke
Seasmoke's picture

i guess none of you live in the USA

Wed, 08/17/2011 - 12:50 | 1569279 Dreadker
Dreadker's picture

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... ;-)

Wed, 08/17/2011 - 12:50 | 1569280 PY-129-20
PY-129-20's picture

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!

Wed, 08/17/2011 - 12:52 | 1569296 Übermensch
Übermensch's picture

Aerial bombing to commence in 5,4,3...

Wed, 08/17/2011 - 12:53 | 1569297 Braindonor1
Braindonor1's picture

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.

Wed, 08/17/2011 - 12:55 | 1569308 cossack55
cossack55's picture

Sho you right, Bd1.  What ever helps the fascists take over is A-OK.  That damn resiliant market needs another shove.

Wed, 08/17/2011 - 12:53 | 1569300 cossack55
cossack55's picture

FBI list my ass. We are talking CIA, NSA, and Spec Ops.  At least BATF will sell them some cool guns.

Wed, 08/17/2011 - 12:54 | 1569305 Biff Malibu
Biff Malibu's picture

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?

Wed, 08/17/2011 - 13:02 | 1569339 the grateful un...
the grateful unemployed's picture

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?

Wed, 08/17/2011 - 19:45 | 1570932 YHC-FTSE
YHC-FTSE's picture

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.

Thu, 08/18/2011 - 12:59 | 1573599 the grateful un...
the grateful unemployed's picture

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.

Wed, 08/17/2011 - 12:56 | 1569313 anynonmous
anynonmous's picture

I wonder how Robber Warren's long-duration equity index put contracts are doing?

Wed, 08/17/2011 - 12:58 | 1569323 John Law Lives
John Law Lives's picture

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.

Wed, 08/17/2011 - 13:01 | 1569332 YHC-FTSE
YHC-FTSE's picture

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. 

Wed, 08/17/2011 - 13:01 | 1569334 Silverhog
Silverhog's picture

Finally, S&P is on the mark with this. I'm in retail and sales are far worse now than in 2008.

Wed, 08/17/2011 - 13:02 | 1569337 the not so migh...
the not so mighty maximiza's picture

Obama response:

Wed, 08/17/2011 - 13:02 | 1569340 Moneyswirth
Moneyswirth's picture

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...

Wed, 08/17/2011 - 13:12 | 1569382 Almost Solvent
Almost Solvent's picture

They make buses in canada?


Wed, 08/17/2011 - 13:27 | 1569443 DosZap
DosZap's picture

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....................

Wed, 08/17/2011 - 13:14 | 1569396 oogs66
oogs66's picture

50k trip?  putting up the secret service guys costs more than that.  this is probably a quarter million trip all in.

Wed, 08/17/2011 - 13:04 | 1569342 Piranhanoia
Piranhanoia's picture

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.

Wed, 08/17/2011 - 13:05 | 1569346 caerus
caerus's picture

wtf got into s&p

Wed, 08/17/2011 - 13:05 | 1569348 digalert
digalert's picture

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.

Wed, 08/17/2011 - 13:06 | 1569349 Ignorance is bliss
Ignorance is bliss's picture

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.

Wed, 08/17/2011 - 13:07 | 1569355 sabra1
sabra1's picture

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!

Wed, 08/17/2011 - 13:07 | 1569360 urbanelf
urbanelf's picture

They've downgraded the future.

Wed, 08/17/2011 - 13:37 | 1569483 andybev01
andybev01's picture

Who cares? The future has be sold.

Wed, 08/17/2011 - 13:08 | 1569363 Shirley Wilfahrt
Shirley Wilfahrt's picture

I bet I know some folks who are OFF the XMas Party list!!



Wed, 08/17/2011 - 13:09 | 1569368 Toe Cutter
Toe Cutter's picture

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.

Wed, 08/17/2011 - 13:09 | 1569372 Long-John-Silver
Long-John-Silver's picture

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 Industry


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.

Wed, 08/17/2011 - 13:15 | 1569383 Doyle Hargraves
Doyle Hargraves's picture

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.

Wed, 08/17/2011 - 13:13 | 1569385 greggh99
greggh99's picture

What happens when the bitchezzz to non-bitchezzz posts ratio on ZH equals the gold to silver ratio?

Wed, 08/17/2011 - 13:14 | 1569397 Shirley Wilfahrt
Shirley Wilfahrt's picture

Terminal redundancy is achieved.

Wed, 08/17/2011 - 13:14 | 1569394 Henry Krinkle
Henry Krinkle's picture

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.

Wed, 08/17/2011 - 13:14 | 1569395 Irish66
Irish66's picture

They are going to break McGraw up into 2 companies

Wed, 08/17/2011 - 13:17 | 1569404 Cdad
Cdad's picture

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!

Wed, 08/17/2011 - 13:19 | 1569409 Henry Krinkle
Henry Krinkle's picture


Off Topic --Solar Flare Activity Prompting NASA to Convene a News Briefing Thursday in Washington

Wed, 08/17/2011 - 13:50 | 1569533 MsCreant
MsCreant's picture

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.

Wed, 08/17/2011 - 14:03 | 1569606 karzai_luver
karzai_luver's picture

Now that would be a market rally to see.


After all those Iphones are fried just think of the BOOM in the gdp!





Wed, 08/17/2011 - 18:17 | 1570736 Kali
Kali's picture

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.

Wed, 08/17/2011 - 13:20 | 1569416 NotApplicable
NotApplicable's picture

So, now that "transitory" has been discredited, will they return to "muddling-through" or adopt a new idiom?

Wed, 08/17/2011 - 13:20 | 1569418 ffart
ffart's picture

How could a US default possibly be bad for gold & silver ??

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