US AAA credit rating downgraded

[citizen k]

http://blogs.forbes.com/kenrapoza/2011/08/06/after-us-downgrade-this-could-get-ugly/

After US Downgrade, This Could Get Ugly
By Kenneth Rapoza

Major economic history is being made over the last 24 hours.  The saga of the US losing its AAA credit rating continues...

Reuters is reporting that Finance Ministers from the US and its G-7 partners will hold a number of conference calls Sunday to discuss US debt in light of Standard and Poors' decision to downgrade US debt. The European Central Bank will also hold an emergency meeting on Sunday about its own sovereign debt crisis in Italy, Greece, Portugal and possibly Spain as this major credit crisis develops.

"I think we are in treacherous waters. What are France and Britian (and G7) going to discuss this weekend? They used to hold dollars. They were looking to us to solve our problems and lead by example and we just got downgraded," says Joel Smolen, fund manager at Axion Capital in San Rafael, Calif. "Where else are they going to turn?"

The ECBs policy-setting council will hold a rare Sunday conference call to talk its own in-house problems, Reuters reported on Saturday.

Markets were marginally hopefully on Friday that the ECB would act as a back stop to buy Italian bonds to stabilize prices. It also said it would buy Spanish bonds as government bond prices in both countries decline due to a sell-off in the default wary sovereign debt markets. To make matters worse, Standard and Poor's downgraded US sovereign credit after market hours on Friday to AA+ from AAA. It is the first time in the history that the US has ever been downgraded. In world markets, US debt is essentially the gold standard.  It is now at least slightly tarnished and the market will clearly change its perspective on US debt as a result of the country's budget deficits and growing debt burden.

French President Nicolas Sarkozy, who heads the G20 group of the world's leading economies, will discuss the financial situation in light of the US downgrade with British Prime Minister David Cameron on Saturday evening, his office told Reuters.

Finance ministers and central bankers of the G7 group of major industrialized nations will confer by telephone on Saturday or Sunday, a senior European diplomatic source said. Their deputies from the broader G20 were due to hold a call on Saturday evening, a Brazilian finance ministry source said.

As expected, the debt downgrade is serious business and calls into question the role of the US dollar as the lead world reserve currency.

The American investing public is the largest holder of US debt through mainly through fixed income and money market accounts.

[chipwich]

I can imagine an Asian country freaking out over getting an AA+ instead of an AAA, but this is America. We would be perfectly happy with a C.

[Berkut]

With your attitude that we can solve all our problems by just taxing "the rich" enough being reflective of the anti-TP retards in the Dem party, I am pretty certain I am correct in my assessment of the odds that the Dems would have pushed through any actual spending reductions.

Your assessment that "without the brinksmanship our overall situation in regards to the debt mess would be worse, not better" is what makes you retarded.

You know what would've happened without the brinksmanship over the debt ceiling? Nothing.  Like the last 30 fucking times it's gone up.

The credit rating did not drop because of the brinksmanship, it fell because despite the brinksmanship, congress still did not do squat to address the basic problem.

Talk about drinking kool-aid, you can't get enough of the standard BS out of the left. Blame the rich, if only they paid more taxes, we wouldn't be in this mess, no matter how much we spend.

The tea party refused to raise taxes, but the latte left refuses to address spending in any real way. The combination is, of course, a fucking disaster. Thanks a lot, radical dumbasses who care more about making sure the other guy loses than making sure we all win.

Way to swallow the Kool-Aid over actuarial accounting procedures, Berk.
[/quote]

[Razgovory]

I would be shocked it it had.  If the point you're trying to make is that any changes to the deficit outside the current budget year should be discounted, I agree completely.

My plan is the that having any faith in a plan that isn't going to be carried out will likely be forgotten within a year is stupid.  I don't understand why you have this hard on for the Ryan plan.  It would be more pragmatic for Congress to mount an expedition to find King Solomon's mines and bring back six trillion dollars in diamonds then push for a plan to balance the budget by 2030.  At least finding diamonds is plausible.

[Razgovory]

With your attitude that we can solve all our problems by just taxing "the rich" enough being reflective of the anti-TP retards in the Dem party, I am pretty certain I am correct in my assessment of the odds that the Dems would have pushed through any actual spending reductions.

Your assessment that "without the brinksmanship our overall situation in regards to the debt mess would be worse, not better" is what makes you retarded.

You know what would've happened without the brinksmanship over the debt ceiling? Nothing.  Like the last 30 fucking times it's gone up.

The credit rating did not drop because of the brinksmanship, it fell because despite the brinksmanship, congress still did not do squat to address the basic problem.

Talk about drinking kool-aid, you can't get enough of the standard BS out of the left. Blame the rich, if only they paid more taxes, we wouldn't be in this mess, no matter how much we spend.

The tea party refused to raise taxes, but the latte left refuses to address spending in any real way. The combination is, of course, a fucking disaster. Thanks a lot, radical dumbasses who care more about making sure the other guy loses than making sure we all win.

Way to swallow the Kool-Aid over actuarial accounting procedures, Berk.

[/quote]

As far as I know, many Democrats have supported spending cuts and actually voted for that.  How many Republicans have supported Tax increases and voted for them?  In your mind Democrats not giving in sufficiently is equal to or worse then Republicans not budging and inch.

[Berkut]

As far as I know, many Democrats have supported spending cuts and actually voted for that.  How many Republicans have supported Tax increases and voted for them?  In your mind Democrats not giving in sufficiently is equal to or worse then Republicans not budging and inch.

Not at all what I've been saying - I think the fact that the Republican non-crazies have all been beaten into submission by the crazies into this "No new taxes" bullshit is considerably worse than the Dems, in fact. But it is the Dem nutjobs who refused to show any restraint when they had power, refused to act resposibly when they had the chance, that led to the rise of the right wing counter-nutjobs. Pelosi and Co. seemed to think that the answer to any and all economic questions was "spend more money" and they did so, and excoriated their own moderates who refused to go along for the ride.

How often did we get to listen to the Languish representatives of the nutwing left curse and bitch about blue Dog traitors? Well, those Blue Dog moderates got hung out to dry for their refusal to go along, and got replaced by nutjob Republicans.

No Raz, I do not at all think the Dems are equal to or worse, but only because of the tactics that have gotten us here, not because there is anything particularly more principled about them. The Dems had a chance to do the right thing when they controlled the White House and both houses of Congress. Instead they chose to use the economic crisis as a carte blanche to go on a spending spree and now we are only *beginning* to pay for the consequences of that. Well, that is a little over-stated, we are beginning to pay for the consequences of MUCH more than just that of course.

[DGuller]

Our undoing is the cultural conflict that started centuries ago, and was never resolved even after we went through a civil war because of it.

Your history is confused. We went through a civil war because of budgetary arguments?

The cultural conflict is between the socially backwards people and somewhat saner people elsewhere.  The budgetary arguments are just a sideshow tacked on to the cultural war, to make 50 percent of the country agree to measures that benefit 2 percent of the country.  The oligarchs have long agp discovered that if you feign interest in the socially backward issues, you can get the socially backward people to whole-heartedly support economic measures that directly hurt them.

[Berkut]

Our undoing is the cultural conflict that started centuries ago, and was never resolved even after we went through a civil war because of it.

Your history is confused. We went through a civil war because of budgetary arguments?

The cultural conflict is between the socially backwards people and somewhat saner people elsewhere.  The budgetary arguments are just a sideshow tacked on to the cultural war, to make 50 percent of the country agree to measures that benefit 2 percent of the country.  The oligarchs have long agp discovered that if you feign interest in the socially backward issues, you can get the socially backward people to whole-heartedly support economic measures that directly hurt them.

Your arrogance truly is breathtaking.

If only the stupid people were not so stupid, they would all think like you.

[Admiral Yi]

My plan is the that having any faith in a plan that isn't going to be carried out will likely be forgotten within a year is stupid.  I don't understand why you have this hard on for the Ryan plan.  It would be more pragmatic for Congress to mount an expedition to find King Solomon's mines and bring back six trillion dollars in diamonds then push for a plan to balance the budget by 2030.  At least finding diamonds is plausible.

So to borrow your logic, since Bush rolled back Clinton's tax hikes we shouldn't have had faith in Clinton's tax hikes?  Of course people in the future can make bad decisons that undo the good good decisions you have made.  That doesn't reduce the desirability of making good decisions in the present.  Then a year passes and we continue to push for good decisions.  MIM has mentioned the desirability of front-loading deficit reduction (or at least of not back-loading).  I agree with him.  But you seem to be taking the position that since nothing is guaranteed we should throw up our hands and wish for the best.

I have a hardon for Ryan for three reasons.  His plan got the ball rolling on deficit reduction.  He touched the third rail.  And his plan was a big, serious number.

[DGuller]

Your arrogance truly is breathtaking.

If only the stupid people were not so stupid, they would all think like you.

Equivocation is for those without balls.  I don't think that if stupid people were not so stupid, the would think like me.  I'm more than just not stupid, I'm quite incredibly intelligent.  However, if stupid people were not so stupid, they would not believe in stupid things that are easily disprovable by facts and reasoning.

[Razgovory]

As far as I know, many Democrats have supported spending cuts and actually voted for that.  How many Republicans have supported Tax increases and voted for them?  In your mind Democrats not giving in sufficiently is equal to or worse then Republicans not budging and inch.

Not at all what I've been saying - I think the fact that the Republican non-crazies have all been beaten into submission by the crazies into this "No new taxes" bullshit is considerably worse than the Dems, in fact. But it is the Dem nutjobs who refused to show any restraint when they had power, refused to act resposibly when they had the chance, that led to the rise of the right wing counter-nutjobs. Pelosi and Co. seemed to think that the answer to any and all economic questions was "spend more money" and they did so, and excoriated their own moderates who refused to go along for the ride.

How often did we get to listen to the Languish representatives of the nutwing left curse and bitch about blue Dog traitors? Well, those Blue Dog moderates got hung out to dry for their refusal to go along, and got replaced by nutjob Republicans.

No Raz, I do not at all think the Dems are equal to or worse, but only because of the tactics that have gotten us here, not because there is anything particularly more principled about them. The Dems had a chance to do the right thing when they controlled the White House and both houses of Congress. Instead they chose to use the economic crisis as a carte blanche to go on a spending spree and now we are only *beginning* to pay for the consequences of that. Well, that is a little over-stated, we are beginning to pay for the consequences of MUCH more than just that of course.

So Democrats not only are responsible for the debt, but for the rise of the stupidity in the GOP?  wow.  That's pretty amazing.

[Admiral Yi]

The cultural conflict is between the socially backwards people and somewhat saner people elsewhere.  The budgetary arguments are just a sideshow tacked on to the cultural war, to make 50 percent of the country agree to measures that benefit 2 percent of the country.  The oligarchs have long agp discovered that if you feign interest in the socially backward issues, you can get the socially backward people to whole-heartedly support economic measures that directly hurt them.

Was it the somewhat saner people who were (and in many cases still are) in favor of running 10% deficits for the foreseeable future?

[DGuller]

There are worse things to do during a pretty catastrophic recession.  Those saner people wouldn't be quite so willing to let Wall Street casino run amok and get us into this mess in the first place, although to be fair, even the saner ones have some blood on their hands when it comes to this.

[Razgovory]

My plan is the that having any faith in a plan that isn't going to be carried out will likely be forgotten within a year is stupid.  I don't understand why you have this hard on for the Ryan plan.  It would be more pragmatic for Congress to mount an expedition to find King Solomon's mines and bring back six trillion dollars in diamonds then push for a plan to balance the budget by 2030.  At least finding diamonds is plausible.

So to borrow your logic, since Bush rolled back Clinton's tax hikes we shouldn't have had faith in Clinton's tax hikes?  Of course people in the future can make bad decisons that undo the good good decisions you have made.  That doesn't reduce the desirability of making good decisions in the present.  Then a year passes and we continue to push for good decisions.  MIM has mentioned the desirability of front-loading deficit reduction (or at least of not back-loading).  I agree with him.  But you seem to be taking the position that since nothing is guaranteed we should throw up our hands and wish for the best.

I have a hardon for Ryan for three reasons.  His plan got the ball rolling on deficit reduction.  He touched the third rail.  And his plan was a big, serious number.

2030 is not a serious number.  What third rail did he touch here?  Did he offer to raise taxes?  Didn't his plan also have a limit on how much you could sue for malpractice?  What the hell does that do?  That's the kind of rider you put on a bill when you want to sink it.

What I'm saying is that you know they won't follow through with a plan that lasts decades.  Three years?  Sure.  Five years maybe.  Twenty years, no.  When you try to pass something like that it means you are trying to look like you are doing something, but not actually doing something.  I'm honestly surprised you buy into that kind of thing.

[Berkut]

Your arrogance truly is breathtaking.

If only the stupid people were not so stupid, they would all think like you.

Equivocation is for those without balls.

Who said anything about equivocation? I said you were arrogant. Being arrogant doesn't mean you have balls, it just means you don't think very clearly. Probably because you spend so much time playing with your balls.

  I don't think that if stupid people were not so stupid, the would think like me.  I'm more than just not stupid, I'm quite incredibly intelligent. 

What you don't get is that it is possible for other people to be intelligent, and yet NOT think like you, and for perfectly good reasons.

However, if stupid people were not so stupid, they would not believe in stupid things that are easily disprovable by facts and reasoning.

And if people like you were not so arrogant, they wouldn't think that they don't have to think at all.