S & P Downgraded U.S.

[guido911]

Well here it is:

NEW YORK (Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.

http://news.yahoo.com/p-reconsidering-u-downgrade-cnbc-001207261.html

[youtube]http://www.youtube.com/watch?v=5gXGRCI4tBY[/youtube]

[nathanm]

It may have a nasty impact, but philosophically, I can't find room in my heart to give a rat's donkey what the ratings agencies have to say. I'm still stuck on them rating any tranche of a subprime CDO squared AAA. I've noticed some more conspiracy minded folks saying that there's some payola going on. I wouldn't put it past them, given their aforementioned performance issues when large streams of income are at stake, but I've seen no evidence of it.

[we vs us]

So it wasn't necessarily obvious during the debt ceiling morass, but having a single credit agency drop the rating by a notch emphasizes more the lack of consensus in rating agencies than it does the credit unworthiness of the US.  If we'd missed the ceiling altogether and all three ratings houses flattened us out, the message and judgement would have been unmistakable.  But one ratings house with questionable math and questionable political motivations doesn't necessarily constitute the total dunning we were expecting.  

So it's bad but not completely awful.  Also, some of the underlying numbers STILL seem to prove that treasuries are the market's safe haven of choice.  One of the pundits on my twitterstream said something to the effect of "where ya gonna go?" re: treasuries and/or dollars and he was totally correct.  China's currency is pegged to the dollar but still floats like the wind; the Euro is on the verge of ripping into fifteen directions; Britain's pound is already mired under several quarters of austerity muck and showing no signs of moving.  Who else is there?  Not the ruble, certainly.

So one bitchy little ratings agency stepping out of line may not do much practically in the long run, but if we're talking about

CONFIDENCE

well, it's kinda hard to look at this and think to yourself that it's morning in America.  It's possible that it's just now twilight.

PS. I reserve the right to rescind whatever cautious optimism I have about this if the market tanks at the beginning of the week.

[nathanm]

So it's bad but not completely awful.  Also, some of the underlying numbers STILL seem to prove that treasuries are the market's safe haven of choice.  One of the pundits on my twitterstream said something to the effect of "where ya gonna go?" re: treasuries and/or dollars and he was totally correct.  China's currency is pegged to the dollar but still floats like the wind; the Euro is on the verge of ripping into fifteen directions; Britain's pound is already mired under several quarters of austerity muck and showing no signs of moving.  Who else is there?  Not the ruble, certainly.

Currency traders are getting into Yen and trying to get into Swiss Francs, but there aren't enough Francs to matter and flight toward the Yen is tempered somewhat by the Bank of Japan's usual willingness to completely decimate the Yen to keep it cheap relative to the dollar. It's hard to fight and win against a central bank in its own currency. 

But yeah, the numbers are pretty clear that absolutely nobody gives a smile about the deficit in the next several years. Real yields are negative out to 7 years right now. (The actual yield is a bit under 2% at 7 years, and less than .5% out to 3 years)

[guido911]

...but I've seen no evidence of it.

Boy does that sound familiar. Hypocrite.

[Teatownclown]

Boy does that sound familiar. Hypocrite.

GET OFF YOUR MEDS!

HERE IT IS!:S&P Cites Tea Party’s Extortion Politics, Which It Calls ‘Political Brinkmanship,’ in Downgrading U.S. Credit Rating
Jon Ponder | Aug. 6, 2011

http://www.pensitoreview.com/2011/08/06/sp-cites-tea-partys-extortion-politics-in-credit-rating-downgrade/

"In explaining why it was lowering the U.S. credit rating late on Friday, Standard & Poor’s singled out tea party obstructionism on the economy:

“The political brinkmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective and less predictable than what we previously believed,” said S&P, one of three leading credit rating agencies.

“The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.”

“Brinkmanship” is a polite term for tea party Republicans’ political extortion tactics during the debt ceiling debate. "

"...falling in line with the corporate media and right-leaning independents who fall back on the laziest of all analyses that both (or all three) parties are to blame — that the hostage negotiators are just as bad as the hostage-takers"
MmmmHmm.

[nathanm]

Boy does that sound familiar. Hypocrite.

It's hypocritical to state that it's not unreasonable to think that past bad behavior is a predictor of present bad behavior, but there's no public evidence of the present bad behavior? I don't think that word means what you think it means.

[we vs us]

Boy does that sound familiar. Hypocrite.

Trolling is for clowns, yo. Quit it. 

[guido911]

Trolling is for clowns, yo. Quit it. 

Oh, okay wevsus, I'll stop trolling just for you. Now, go back to your little nest you have with Nate.

[Teatownclown]

http://finance.yahoo.com/blogs/daniel-gross/u-credit-rating-victim-gop-sabotage-021622372.html

"Congressional Republicans deserve much more of the blame. For this calamity was entirely man-made -- even intentional. "

[guido911]

Yeah, Obama and his left Congress runs up the debt to historic levels for 2 years. But its the GOP sticking to its principles and wanting to stop that nonsense for 3 weeks or so which caused the credit rating to fall.  . Here is a link to our tax cheat who is the head of our treasury commenting on the risk for a downgrade:

http://www.mediaite.com/tv/tim-geithner-in-april-no-risk-of-sp-downgrading-americas-credit/

Dumbass. And on that subject, with the downgrade and the U.S. losing over twenty elite soldiers in Afghanistan, where is our president? Having his one of many "Now watch this drive" moments.

http://www.dallasblog.com/201108051008311/dallas-blog/amidst-obama-depression-president-plays-golf.html

Finally an answer as to why the downgrade happened. It's the damnable constitution. Go to 8:50 and witness why Cokie has that first name.

http://abcnews.go.com/ThisWeek/video/roundtable-politics-economy-14249543

[Teatownclown]

It was the Teabagger/GOP extortionist tactics. Believe whatever your systemic brain warp makes you believe.
S and P has said what caused the down grade and it's consistent with my posts.

You people are crazies. Just ask Governor Christie.....

http://www.politicususa.com/en/rachel-maddow-mtp-debt more proof. This is all YOUR fault. I hope you lose your a$$ Monday.

[guido911]

Everyone. Are we on the verge of an aox/fotd meltdown? Hope so.

Edited to add this link discussing the S&P decision and the left's cherry-picking of its decision.

http://patterico.com/2011/08/07/for-whom-the-downgrade-tolls/

[Conan71]

Precisely what I've warned about for some time that our debt was eventually going to be down-graded.  You can't simply keep borrowing without a plan to eventually pare that down and formulating a plan to re-pay it.  No, I'm not gloating either, I'm pissed off that Washington doesn't seem to care.

Next prediction: The downgrade doesn't stop here.  Just wait another 12-24 months as Congress keeps playing it's games and does nothing about spending or reducing the debt.

[nathanm]

Now, go back to your little nest you have with Nate.

You better delete that smile. If SWMBO reads it, she'll shoot me.