The Fed Shutdown Poll and Megathread

[Admiral Yi]

You are correct. On all counts. Of course the reason they held on to them because they were perceived as risk-free investments since they could always sell to FM&FM in the end.

The banks thought that Freddie and Fannie would buy up their mortgages at face value even after they'd defaulted?  That doesn't sound right.

[Tonitrus]

You end up with a new feudal society with the masses having their lives directed by an all-powerful bureaucracy, with little choices left for themselves because the bureaucrats deem the unwashed masses unfit to govern themselves.  It's funny how the modern left has embraced aristocracy as a form of government.

I may have slept through my medieval government class, but I am pretty sure that definition is absolutely nothing like a feudal society.

[Neil]

It's hilarious to see Neil, an actual conservative, absolutely not even come close to the level of comprehension of modern American proto-conservatism.

See what we're dealing with down here, Neil?

It's funny how prosperity seems to sometimes convince people that rolling back the last seven thousand years of social progress might be a good idea.  It's not so much neoconservative as it is neolithic.

[DGuller]

It's hilarious to see Neil, an actual conservative, absolutely not even come close to the level of comprehension of modern American proto-conservatism.

See what we're dealing with down here, Neil?

It could be because American conservatives are reactionaries at best.

[Razgovory]

It's hilarious to see Neil, an actual conservative, absolutely not even come close to the level of comprehension of modern American proto-conservatism.

See what we're dealing with down here, Neil?

It could be because American conservatives are reactionaries at best.

I think Hans just lost his composure again and let slip what he, and other conservatives, really think.

[DGuller]

I think Hans just lost his composure again and let slip what he, and other conservatives, really think.

Hard to see how this is not the case.  You don't say such things unless you really mean them (and are too stupid to censor them).

[Razgovory]

I think Hans just lost his composure again and let slip what he, and other conservatives, really think.

Hard to see how this is not the case.  You don't say such things unless you really mean them (and are too stupid to censor them).

Last time he did this was back in 2005 when he was gloating about the imminent demise of the Democratic Party.  I Kept the quote in my Sig for a while, so all would remember it.  Unfortunately, it didn't work.  Cause I forgot exactly what he said.

[Caliga]

I remember back in 2009 reading an article in Businessweek about a small bank in Texas that weathered the crisis well because they refused to participate in the subprime market.  The CEO was remarking how thru they decade he was constantly harrassed and threatened by federal regulators for refusing to participate in the subprime market.  He of course was feeling a littlebit smug about the whole thing because his refusal to cave in to banking regulators left him standing strong after the collapse.

Actually I think I heard an interview with this guy on NPR around that time.  Was the bank in like Amarillo, Lubbock or Waco, or another of the smaller Texas cities?

[Admiral Yi]

Standard & Poor's issued a negative outlook for US Treasuries today, which is what is causing the carnage in the stock market.

Those of you who think the deficit discussion is just a popularity contest please take note.

[DGuller]

Standard & Poor's issued a negative outlook for US Treasuries today, which is what is causing the carnage in the stock market.

Those of you who think the deficit discussion is just a popularity contest please take note.

Honest question:  does the rating of the US debt matter?  You'd think if there ever were an item where everyone would do their own due diligence rather than rely on outside ratings, US bond rating would be it. 

I also wonder what the reason for the downgrade is.  Is it because the debt level is dangerous from a financial standpoint, or is it due to the game of chicken being played with the debt ceiling?

[MadImmortalMan]

Probably because Congress is ass.

[Barrister]

Standard & Poor's issued a negative outlook for US Treasuries today, which is what is causing the carnage in the stock market.

Those of you who think the deficit discussion is just a popularity contest please take note.

Honest question:  does the rating of the US debt matter?  You'd think if there ever were an item where everyone would do their own due diligence rather than rely on outside ratings, US bond rating would be it. 

I also wonder what the reason for the downgrade is.  Is it because the debt level is dangerous from a financial standpoint, or is it due to the game of chicken being played with the debt ceiling?

Plenty of institutions have rules or guidelines based on bond ratings.

[Admiral Yi]

Honest question:  does the rating of the US debt matter?  You'd think if there ever were an item where everyone would do their own due diligence rather than rely on outside ratings, US bond rating would be it. 

Probably not for pros.  From what I've read ratings follow the market.  It might make a difference for retail investors.

[Admiral Yi]

Plenty of institutions have rules or guidelines based on bond ratings.

Insurance companies and pension funds are limited to investment grade (at least BBB??).  I don't think a drop from AAA to AA would *force* anyone to unload.

[KRonn]

Standard & Poor's issued a negative outlook for US Treasuries today, which is what is causing the carnage in the stock market.

Those of you who think the deficit discussion is just a popularity contest please take note.

Honest question:  does the rating of the US debt matter?  You'd think if there ever were an item where everyone would do their own due diligence rather than rely on outside ratings, US bond rating would be it. 

I also wonder what the reason for the downgrade is.  Is it because the debt level is dangerous from a financial standpoint, or is it due to the game of chicken being played with the debt ceiling?

Doesn't the rating going down mean the US owes more interest on its borrowing, increasing the amount of budget that goes towards interest? For one thing anyway. More expensive to finance the debt, which isn't going down so fast anytime soon.
It seems to me that questions on the amount of debt have been lingering for a long while, so I'd think it's more that at present than questions on the debt ceiling.