[CNBC] S&P contacts White House to notify about a downgrade coming

This is what happens when you let trailer trash vote, pandering to their racism and overtly wrong mistheologized view on Christianity.

Republicans really have lost their minds...

 

Happy Birthday, Mr. President.

[insert MObama shrieking pic]

 

I bet you're sporting a raging boner over this...

 

After the financial crisis a few years ago, S&P's ratings mean jack squat as far as I'm concerned.

 

Wow... that may be the most hateful thing I've ever read.

 

Probably not the best thread to put this in, but god damn it, rating agencies can practically dance around the US government with its ratings, but it doesn't dare disturb the almighty gods of Goldman Sachs, JP Morgan of their products when times were good? It's almost like they have to pander to those banks (thanks to the fees) but doesn't have to do so to the government.

Also, I think this 'disclaimer' is quite important in the S&P's release:

The rating downgrade neither affirms that the Republicans are right and that spending MUST be cut, nor that Democrats are right and that revenues MUST increase. It basically says the US government systems absolutely SUCKS.

 

Yes, that was an incredibly stupid comment, with all due respect to the person who made it. Stupid really being an understatement.

Here's another comment I found more interesting:

GREG SALVAGGIO. SENIOR VICE PRESIDENT, TEMPUS CONSULTING, WASHINGTON D.C.

"I really find it quite amazing that a credit agency that could rate mortgage backed securities AAA has decided to downgrade the U.S. government.

"I think the forecast overstated by between $2-3 trillion, the Treasury alerted them of the fact and they decided to go ahead with the downgrade anyway.

In my job as an analyst, if my forecast were off by 2 million, or 200 million let alone 2 trillion it would make it incredibly hard to say to my peers that my analysis was sound.

"I find it to be incredibly troubling from a ratings agency with a very terrible history in the last three years of its ability to quantify risk.

"I'm a little bit fired up about it.

"What Moody's and Fitch have really quietly agreed to do is say, 'We are going to wait and see what the commission comes up with before a downgrade,' but S&P went ahead and did it anyway with numbers that were wrong.

"Traders put some credibility into the possibility of this downgrade. If you look at government bonds today, they closed down. Now we have to take a step back from our U.S. perspective, from an American pride perspective. Where else are you going to put your money right now? Europe is a mess....

I don't think there is going to be a mad rush to Swedish bonds, which is one of two countries that is still AAA.

http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-view-idUSTRE77504J20110806

 

Actually, now that I think of it, aren't some insurance funds or pension schemes required to invest in AAA investments? Could this affect demand for US bonds?

 

The majority of Americans are seeing through your conservative lies. They know who created this mess. They know who is preventing us from fixing this mess. So, please give it a rest.

 

Yes, Republicans' policies cause all kinds of chaos, particularly when it comes to their economic policies. The Bush and Reagan tax cuts loaded trillions onto the debt, their deregulation of the financial industry caused the worst recession since the Great Depression, and the TEA Party and Republicans' intransigence on raising taxes has now caused the US' credit rating to be lowered for the first time in history.

There is certainly some blame to be put on all parties, though I really don't think Bush I had many policies that were truly destructive. He raised taxes when he saw that the deficit was becoming a big problem, which set the stage for Clinton to finish balancing the budget.

Do you really have a problem giving credit where credit is due?

 

That's the fear.

 

What other choice do they have, Mr. Clutch. There are only two countries now with AAA bond ratings and one is tiny Sweden. I can't remember the other one. Of course, Sweden is absolutely stuffed with beautiful chicks. There is that to ponder. ;-)-

 

S&P pretty clearly argues for letting the Bush tax cuts for the wealthy expire - saying it would result in a "stable" rating instead of "negative":


Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

 

Obama's selection by the media in '08 was to serve a vehicle to drive voter turnout from the blacks and young voters. He was trotted out as a candidate to win an election and then turn over left wing policy initiatives (health care, climate change/EPA overreach, labor union benefits, stimulus/handouts, incentives to stay unemployed, etc) to the wonks, while he read from a teleprompter and inspired naive people. It was the wrong answer to our emerging problem in 2009, which was entitlement spending overlaid against a reduction in tax revenues. Obama's fiscal policy has been an unmitigated disaster -- over $3 trillion in deficits in less than 3 years. He's a politician, not a leader, and every action he takes is with a mind towards reelection. He just does not understand the economy or job creation. That's evident to any educated observer.

Kos and the other parrots pushing the White House's agenda are trying to pin this downgrade on the Tea Party. Here are the facts: Without the Tea Party, Obama raises the debt ceiling with no spending cuts. It took the Tea Party to inject sanity into our fiscal crisis, and demand spending cuts to bring the deficit down. Without the Tea Party, the deficit would be higher. So this is not the Tea Party's fault, but rather the fault of Obama and Pelosi's reckless spending and pandering to low income, uneducated voters in search of handouts.

We are quickly moving towards hyperinflation, a la Weimar or Zimbabwe. We must change entitlements now. If we do not, we become Greece, Ireland, Italy, and Spain, and are mired in a high interest rate, low growth environment where economic growth is abysmal and eventually deflation kicks in. We have to have leaders who have the managerial courage to cut off these people who rely on entitlement spending. Unless we do, we will all end up worse off. Leadership requires courage, and can not be achieved by trying to appease the ignorant masses. Obama lacks this courage and is the weakest leader in the history of our great nation.

 

yes, all kinds of stuff could reset becase of this

the timing is interesting as well. is there a reason they had to do this right now?

 

And had Obama not caved on that issue to Republican blackmail, would we be facing this now?

 

Depends on the end result. If he won and got the end result he wanted, it certainly would have helped. If he lost that fight, then we're probably in much worse shape now.

 

Are we still juvenile enough to play this game?

You hit the nail on the head. "Started it." As a nation, are we going to "finish it"? Whatever happened to hoping for 'change', right?

Strange reason... lmao.

 

I assume Goldman Sachs and the insiders knew of this wed night, thus the past two days of selloff.

 

the logic, it burns

the S&P didn't downgrade us while the Democrats controlled "all of Washington" and wait what this is the Bush tax cuts' fault admittedly? WHY ARE YOU TALKING