dagblog - Comments for "Standard & Very, Very Poor"

Right on. S&P's revenue comes

Oxy Mora — Tue, 09 Aug 2011 15:27:03 +0000

Right on. S&P's revenue comes from clients in the financial industry. The financial industry sees Obama and Dodd-Frank as the enemy. S&P, nor anyone else, has a computer model that can predict our deficits; if they did, it would still come down to assumptions(guesses) about full employment and productivity--to name two out of many. Having no math to prove anything, S&P entered the political arena to an extent never before seen from a ratings agency. There is no way this downgrade does not hurt Obama. The markets will recover, bond yields may creep up a few basis points. But the economy itself and attendant employment have taken a hit. The hit is on confidence--business confidence, consumer confidence, and eventually our own when we question what we bought in this President.

It's also not surprising.

Verified Atheist — Tue, 09 Aug 2011 10:36:20 +0000

In reply to Thank you, Dan. It's too bad

It's also not surprising. Drama sells. (That doesn't make it any less bad, of course.)

It?s hard not to feel a

Richard Day — Tue, 09 Aug 2011 07:57:48 +0000

In reply to Standard & Very, Very Poor

It’s hard not to feel a certain contempt for Standard & Poor’s in the wake of its downgrade of American debt. Its sole job as a credit-rating agency is to gauge the creditworthiness of bonds, yet like its competitors, Moody’s and Fitch, it has consistently fallen short. It downgraded Enron days before the company went bankrupt. Its willingness to slap a AAA rating on securitized subprime junk was the foundation upon which the entire financial crisis was built. And now, to show that it’s got some spine, S.& P. decided to downgrade the United States? From a purely economic standpoint, the likelihood of a U.S. default is nil. As my friend Daniel Alpert, a founding managing partner of Westwood Capital, put it: “The size of the U.S. economy, the wealth of its inhabitants and the assets of the sovereign entity itself are unquestionably more than adequate to repay, with interest, all of the $14 trillion or so of the nation’s debt.” He added, “Anyone with a rudimentary understanding of finance and economics can figure that out.” On Monday, with the market collapsing, where did investors rush to put their money? In the one security they still considered safe: U.S. Treasuries

http://www.nytimes.com/2011/08/09/opinion/nocera-while-the-markets-swoon.html?_r=1&hp

S&P are part and parcel of a corrupt system to begin with. S&P could not find its own ass with two hands.

S&P have now demonstrated that they are nothing but traitors and part of the international corporate oligarchy that has no allegiance to this country; that perpetrates felonies including extortion and bribery; and that should be erased from our American consciousness.

the end

To me, the United States

The Liberal Mob — Tue, 09 Aug 2011 05:22:56 +0000

In reply to A week ago, we were within

To me, the United States government being unable to meet all its obligations is a default. I don't see that as an unreasonable position, even if debt service payments would have been able to continue in full.

The point, of course, is that we had a completely unnecessary and self-generated crisis.

It's all a head game with

Anonymous — Tue, 09 Aug 2011 04:17:05 +0000

In reply to To be more specific, current

It's all a head game with both the Republicans and the President.

FEAR

You must vote for Obama out of fear; if the other side wins they'll be worse?

Screw the peoples 401K's it's all about reelections, besides if your 401K' go any lower you CANT retire early, you'll have to work longer.

Will working longer save the Social Security Trust Fund money? Will it help Medicare?

You wage slaves will have to keep working and paying for your ENTITLEMENTS

They don't need death panels, they'll keep you working till you die.

First they took the roof from over your heads, now they've taken your other assets.

To be more specific, current

Dan Kervick — Tue, 09 Aug 2011 02:39:21 +0000

In reply to A week ago, we were within

To be more specific, current monthly debt service is less than 1/15th of current monthly tax revenues. So even without any additional borrowing, debt service payments can easily be met.

And they would have been met:

http://www.npr.org/blogs/money/2011/07/29/138806068/why-interest-payment...

Nevertheless, both parties, for somewhat different reasons, have allowed public misperceptions and ignorance of the nature of our revenue and debt situation to fester and proliferate, even now to the extent where an eggregiously incompetent or corrupt judgment by a ratings agency can trigger a massive fall in the stock market, and destroy more investor wealth.

Obama could and should end this nonesense right away with a clear statement such as the following:

Whatever the outcome of the upcoming Congressional negotiations on the means of meeting the deficit-reduction targets passed into law next week, the United States will pay its debts. It can make these debt payments easily, agreement or no agreement, and there is not even a shadow of a doubt about the fact that these payments will be made. My administration will continue to prioritize debt payments above all other payments. Indeed, the 14th amendment mandate that the federal debt "shall not be questioned" requires our government, and the Treasury Department, to prioritize debt service payments over all other payments. So even if my administration had a mind to prioritize some other payments, we are constitutionally bound to prioritize debt payments.

The United States does not welsh on its debts. Period. End of story. Investing in US treasury bonds remains the safest possible investment that can be made anywhere in the world.

Standard & Poor's knows all this, which means their decision to downgrade US debt is based either on staggering incompetence, or corrupt political motivations.

Unfortunately, the muddy statement he made today only contributes to further confusion, and suggests to people that the integrity of US government debt somehow depends on what is happening in Congress.

Thank you, Dan. It's too bad

MrSmith1 — Tue, 09 Aug 2011 02:16:45 +0000

In reply to A week ago, we were within

Thank you, Dan. It's too bad the media would rather be dramatic than accurate.

A week ago, we were within

Dan Kervick — Tue, 09 Aug 2011 02:09:24 +0000

In reply to Standard & Very, Very Poor

A week ago, we were within hours of an outright default.

This is simply false. Why do people keep repeating it? Even if the debt ceiling had not been raised, the US government was not close to defaulting on the debt.