Article

2011-08-07 Economy

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Posted by Fred 2011-08-07 00:00|| || Front Page|| [11128 views ] Top

#1 It IS your duty to downgrade. You asked for serious measures in cuts as immediate- ($4 Tril) and instead, the government essentially spent $2.4 more trillion.

The S&P exchange traditionally has been the old world comoddity market of choice.

It was justified.

Posted by newc 2011-08-07 00:21|| 2011-08-07 00:21|| Front Page Top

#2 S&P is just pissed that GS and JPM and some hedgefunds had to loose 250 billion smakers on a bad oil bet based on the US gov reaching an agreement and not defaulting. To cover that bet they had to unload all sorts of assets that caused this week's worldwide stockmarket disaster. Considering past, current and future FED and Treasury leadership have been or still are (under the table) GS or JPM people... one has to consider their oil bet on a US default as traitorous. So they lower the gov rating to make more money on interest to cover their traitorous bets....
This ignores any limit or budget arguments but that's OK as they bet against the people of America. Does that make them enemies of the US?

Posted by Water Modem 2011-08-07 01:40|| 2011-08-07 01:40|| Front Page Top

#3 thanks to all who commented yesterday, really interesting especially on reserve currency and trade imbalance.

S&P are right they have a duty to rate fairly by the guidelines they have set.

After the carnage, good may yet come of it, in that the US may reign in its spending and solve its economic issues.

You are right the US Navy does secure sea trade as it stands. But as you can see off the coast of Somalia, that is a hotly contested area of global politics.

Every navy including the Chinese and Russian is out there "protecting against piracy" but also jostling for power with each other.

The great game is being played at sea right now and China's naval power is increasing at a dramatic rate. They are putting a lot of money into warships and they will soon have aircraft carriers

they are the threat to watch now not some allan-worshipping fanatics.

We could have solved the 9/11 problem by rounding up Islamist fascists and put them in internment camps.

Denying visas to enter the US to anybody from Saudi or Pakistan unless they publicly disavow Islamism - seal the borders against the enemy.

no US lives lost, no draining the Treasury

And the credible, public threat that any future 9/11s will be met with the dropping of a Little Boy on Mecca.

No more 9/11s.

Posted by anon1 2011-08-07 02:49|| 2011-08-07 02:49|| Front Page Top

#4 PEOPLE'S DAILY FORUM > WOLRD MARKETS FEAR SECOND
US DOWNGRADE AFTER RATINGS DIP.

CNN + FOX NEWS > looks like very few of the Perts believe POTUS BAMMER = USA will be able to avoid a new downgrade by EOY 2010 iff world markets fail to stabilize + continue in serious decline???

Posted by Punky Turkeyneck1180 2011-08-07 06:22|| 2011-08-07 06:22|| Front Page Top

#5 Sorry, last post was mine - must be the rain.

Posted by JosephMendiola 2011-08-07 06:23|| 2011-08-07 06:23|| Front Page Top

#6 See also RENSE > [Business Insider] CHINA WON'T LEND THE US ANY MORE MONEY | CHINA: AMERICA NEEDS TO ACCEPT "THE PAINFUL FACT THAT THE GOOD OLE DAYS OF BORROWING [to clean up its messes] ARE [finally = forever?]OVER"???

Posted by JosephMendiola 2011-08-07 06:59|| 2011-08-07 06:59|| Front Page Top

#7 You asked for serious measures in cuts as immediate- ($4 Tril) and instead,

I don't care which party is in power or who is President, we will damn well do what we want without any leaches providing guidance. Go hammer the drachma.

Posted by S 2011-08-07 08:09|| 2011-08-07 08:09|| Front Page Top

#8 They are saying futures market is going to drop 50% next week. Looking like our ride is going on for awhile.

Posted by Dale 2011-08-07 09:25|| 2011-08-07 09:25|| Front Page Top

#9 Daniel Goldman aka Spengler had some trenchant comments today on S&P as a business / malefactor:
Remember, S&P is the rating agency that sold its soul to Wall Street for structured-product ratings business. Why arent those guys in jail for fraud, given the exhumation of emails showing that S&P employees knew exactly what they were doing? The answer is that S&Ps lawyers take the position (which no-one has challenged) that S&Ps ratings are Constitutionally-protected free speech, like a newspaper editorial. After the shocks of 2008, no-one wanted to make more waves by going after these self-appointed actually not self-appointed, but mandated by Federal law arbiters of the credit system.

What hooey. The US government should sue them for their malfeasance during the structured credit bubble. There are still securities rated AAA by S&P trading at 40 cents on the dollar.

Posted by Anguper Hupomosing9418 2011-08-07 11:26|| 2011-08-07 11:26|| Front Page Top

#10 S&P is the rating agency that sold its soul to Wall Street for structured-product ratings business.

So did Fitch and Moodys. As long as the issuer pays these companies, your going to have to take their opinions with a grain of salt.

More important is the "negative credit outlook" that S&P issued along with the downgrade. The rating agencies are usually late to the party, and the negative outlook is their way of saying "expect more downgrades -soon!"

Posted by Frozen Al 2011-08-07 13:29|| 2011-08-07 13:29|| Front Page Top

#11 Whatever the politics, the U.S. under our present sleazy spendaholic clowns deserves a downgrade.

Would you lend money to someone with the U.S. gummint's borrowing/spending habits? Me neither.

Posted by Barbara 2011-08-07 13:59|| 2011-08-07 13:59|| Front Page Top

#12 Would you lend money to someone with the U.S. gummint's borrowing/spending habits? Actually, I have. The major portion of my tax-deferred retirement savings was shifted into short term gov't securities 4 years ago, for lack of anything better, and there they remain. Haven't lost anything besides whatever has been lost to QE I, II, etc.

Posted by Anguper Hupomosing9418 2011-08-07 15:37|| 2011-08-07 15:37|| Front Page Top

#13 Indeed, its savers the world over that are doing the lending.

Its rather misleading when its said China, Japan, etc are doing the lending. All the governments are doing is parking the savings of individuals that result from excess foreign supply versus foriegn demand.

Posted by phil_b 2011-08-07 16:22|| 2011-08-07 16:22|| Front Page Top

#14 I believe that this downgrade is aimed squarely at the Bernank and Geitner. The US can never default, not as long as the debt is denominated in dollars and the printing press is functioning.
The problem is that the dollars will weaken and all other currencies will have to revalue downwards too. That's what is pissing off China and causing problems with the Euro. Throw in commodity and food inflation in the third world, just so the US can live high on hog by abusing its reserve status. As the say in the UK, "bugger you, I'm OK"

Posted by tipper 2011-08-07 19:45|| 2011-08-07 19:45|| Front Page Top

#15 It's not quite that straight forward, tipper. China's in good shape in large part because they've been manipulating the value of their currency for well over a decade - keeping it artificially low so that they could suck industries to relocate there and export goods to us. Bush tried for years to get them to moderate that, and failed. So now their currency will be revalued for them, whether they like it or not, by the dollar dropping dramatically. That not only forces their own currency up, and makes their exports more expensive - it also devalues the US treasuries they hold. Watch for them to try to buy up US assets like real estate with US dollars to get out of the bind they've helped to create.

You are right about the very poor. That is caused in good part by poor yields in a number of key crops world wide, but the currency issue doesn't help.

Posted by lotp 2011-08-07 20:14|| 2011-08-07 20:14|| Front Page Top

#16 First, my abject apologies to whoever fixed the 'burg.

Second, I'm unconvinced the Chinese kept their currency "artificially low." They used an old-fashioned natural way of devaluation: they increased their money supply, and used the proceeds from that to subsidize raw material purchases in industries where they have strong vertical integration.

They manage to kill two birds with one stone that way.

Posted by Thing From Snowy Mountain 2011-08-07 20:22|| 2011-08-07 20:22|| Front Page Top

#17 lotp, Indeed what you say is true, but what I'm referring to is the future. Every time China and Japan have to revalue down, their inflation rate goes up. By not addressing it's debt position, the US is causing massive instability in the world. That's why moves are being to remove its maxed out credit cards/reserve status and substitute another (Gold is the default at present) Basically the rest of the world will have to put an adult in charge to lessen the damage caused by the incontinence of the US fiscal system.

Posted by tipper 2011-08-07 20:35|| 2011-08-07 20:35|| Front Page Top

#18 Talking about gold:
Goldman Hikes Its 12 Month Gold Price Target From $1,735 To $1,830

Posted by tipper 2011-08-07 21:01|| 2011-08-07 21:01|| Front Page Top

#19 Basically the rest of the world will have to put an adult in charge to lessen the damage caused by the incontinence of the US fiscal system

tipper, I would argue that if the rest of the world stops buying --and starts dumping their holdings of -- U.S. Treasuries, things will come to a head pretty quickly. And if they don't, they don't really believe things are as risky as they're making out...or at least not riskier than all the other places they could park their excess cash. We only have to run faster than the other guy also being chased by the lion, a certain mindset would say.

Posted by trailing wife 2011-08-07 23:19|| 2011-08-07 23:19|| Front Page Top

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