US Credit Rating Downgraded To AA+

[firstdown]

Originally Posted by GMScud

Fannie and Freddie now downgraded (I'm amazed that didn't happen a few years ago). Are individual states next?

News from The Associated Press

Just aske old Barney Frank.

‪Democrats were WARNED of Financial crisis...

[Daseal]

Originally Posted by 12thMan

Gus, if you read my post and several others in threads elsewhere we probably agree on more than we disagree. Actually, I think that's the case more often than not around here on Warpath but that's another story.

Secondly a rating agency, such as S&P, has no business whatsoever issuing a rating on our nation's credit worthiness based on the politics of the moment. They shouldn't do it today, they shouldn't do it tomorrow, they shouldn't do it ever. Besides we're talking about S&P, the same company that just three years ago handed out AAA ratings to failed banks and mortgage lenders like they were going out of style. So I find their recent track record a little suspect at best. As far as I'm concerned this downgrade is symbolic more than anything else and the good old U.S. of A. will keep on trucking.
In terms of who's the blame? There's plenty of that to go around and without getting into which party was right or wrong, all I know is since 1962 the debt ceiling has been raised 74 times, about once every eight months. Often times with little or no fanfare. But this year, for some reason, it became the laser focus of some members of Congress to the extent it brought us to the brink of default. Just to be clear the debt ceiling has nothing to due with future spending levels. We raise the debt ceiling to cover spending appropriated in the previous Congress. In other words, many of the politicians that were calling for drastic spending cuts and austerity measures are on record voting for the very bills that they now oppose in principle. Take from that whatever you will.

I disagree vehemently with this point. Our political arena has made it impossible for either side of the aisle to be any more than whiny brats. They no longer care about what's best for the country. It seems like most of their effort is put towards trying to bring the other side down than to bind together to bring us up. Both sides need to make concessions in order to make this work, and they simply aren't doing it. That type of political environment directly relates to confidence and the economy. Watching the way they handled both the government shutdown and the debt ceiling was absolutely appauling to me.

I think we're starting to see why a republic has never lasted 250 years before. It gets so convoluted. The laws and rules become outdated and useless. Personally, I'd love to see campaigns limited to certain amounts, that are put there by the tax payers. No more private interests in campaigning. I hate when I saw a completely unrelated law tacked to a bill that virtually can't fail to get it pushed through when it couldn't pass on its own merit. Vote on one issue at a time, etc.

I know that my views of politics are very simplistic, but more complicated doesn't always mean better.

[FRPLG]

The problem with our system is quite easy to identify. Politicians do not answer to constituents...they answer to their party. Politicians who are not part of a party have an insane uphill battle to election. All this talk of compromise at the political level is hogwash. None of them can be trusted to to what's right (compromise or not)...they only do what is needed to stay elected. Now back to the credit rating that 12th seems to think isn't important contrary to the rest of society (as indicated by the markets reaction).

[GMScud]

Originally Posted by FRPLG

The problem with our system is quite easy to identify. Politicians do not answer to constituents...they answer to their party. Politicians who are not part of a party have an insane uphill battle to election. All this talk of compromise at the political level is hogwash. None of them can be trusted to to what's right (compromise or not)...they only do what is needed to stay elected. Now back to the credit rating that 12th seems to think isn't important contrary to the rest of society (as indicated by the markets reaction).

This.

[12thMan]

FRPLG, I didn't say the credit rating wasn't important. A credit rating agency, in my opinion, should issue downgrades or upgrades based on economic data; The models and metrics they've been using since the company was founded. Not politics. If you think I believe that the credit rating is somehow trivial, then I don't know what else to tell you.

Daseal, your post summed up exactly what my post said, except the part about the S&P. I maintain, they are a credit rating agency that issues ratings which forecast the credit worthiness of America's sovereign debt and it's ability to service said debt. Period. That's it. They have no business, whatsoever, making one mention of either party by name. I don't care if the White House is set on fire by the Tea Party tomorrow, S&P should stay the f*ck out of our political discussion and shouldn't issue debt forecasts based on the politics of the moment.

But if you want to take their downgrade for what it said, fine. I'm curious about where you stand on them calling for a raise of revenues three separate times; a position that one party was more than willing to accept as a part of an overall package, but there were no suitors on the other side of the aisle. They've pretty much said until revenues are a part of the mix, among other things, they stand by their downgrade.

What's more interesting is that market tanked another 600 points today, but treasuries held their own as investors fled for stability. That tells us two things: The market doesn't see inflation around the corner and it believes, contrary to the downgrade, that treasuries and bonds are a safe haven for investors for the immediate future.

With so much uncertainty, investors were leaving little to chance. Despite the downgrade of U.S. debt, Treasury prices rose, pushing yields lower, as investors fled into the relative safety of government-backed debt.

The yield on the benchmark 10-year U.S. Treasury fell to 2.34% from 2.56% late Friday.

"The Treasury market seems to be oblivious to the fact the U.S.' credit rating was downgraded," said Quincy Krosby, market strategist with Prudential Financial.

[12thMan]

In response to the S&P downgrade, Rep. Eric Cantor.

Cantor urges GOP to resist tax hike pressure after S&P downgrade - TheHill.com

[JoeRedskin]

One of Cantor's comments from the quoted article:

"Our country currently faces two very serious crises — debt and jobs,” Cantor wrote. “These two crises are not mutually exclusive, but they are equally dangerous. That is why it is absolutely critical that as policies are developed to overcome each, we consider their impact upon each other. Anything less would be negligent.”

Regardless of anything else, I think that succinctly states the issue facing us. Any problem has to deal with both issues. Off the top of my head, I got nothing.

[hooskins]

Originally Posted by 12thMan

In response to the S&P downgrade, Rep. Eric Cantor.

Cantor urges GOP to resist tax hike pressure after S&P downgrade - TheHill.com

See the stubborness of the republicans (and tea party) is ridiculous to me. Dems are more than willing to make cuts to entitlement programs and spending why can't they come across the partisan barrier and give a bit? Spending cuts only go so far.

[NC_Skins]

Originally Posted by FRPLG

The problem with our system is quite easy to identify. Politicians do not answer to constituents...they answer to their campaign contributors (major ones by businesses).

I fixed this for you to better reflect the truth.

[steveo395]

Originally Posted by hooskins

See the stubborness of the republicans (and tea party) is ridiculous to me. Dems are more than willing to make cuts to entitlement programs and spending why can't they come across the partisan barrier and give a bit? Spending cuts only go so far.

If the democrats are so willing to tackle the debt issue, why didn't they do it when they had the super majority last year? It's not like the debt wasn't a giant problem then either. I'm not saying the republicans aren't a big part of the problem too. They added trillions of dollars of debt, but the democrats have only made the problem worse since they took over congress in 2006.

[12thMan]

So the S&P might be called to testify before Congress. The gloves are about to come off. This is getting ugly.

S&P investigated by Senate Banking Committee - Josh Boak - POLITICO.com

[NC_Skins]

Originally Posted by JoeRedskin

Sorry, I don't buy the "it's a conspiracy" part of the rant. It's been done before and will be done again. ("it's the Northeastern elite, it's the Jews, it's the Federal Reserve, it's the oil companies, etc.)..

Why do you think it's a "conspiracy" that corporations do in fact control our government? The lobbying industry is a billion dollar industry for a reason. Corporations don't hand over hundreds (or millions) of dollars in campaign money for no reason.


So you think its a coincidence that the same guys that are running the Federal Reserve and Treasury department worked in a crooked Wall Street environment (and who's very own misguided actions led to the downfall of the banking industry) are now controlling our nations economy? lol....

Nope, the media would surely rat these things out! Yep, the same media who's income is also depended on by these very corporations.




It's no conspiracy.

[FRPLG]

Originally Posted by 12thMan

FRPLG, I didn't say the credit rating wasn't important. A credit rating agency, in my opinion, should issue downgrades or upgrades based on economic data; The models and metrics they've been using since the company was founded. Not politics. If you think I believe that the credit rating is somehow trivial, then I don't know what else to tell you.

Daseal, your post summed up exactly what my post said, except the part about the S&P. I maintain, they are a credit rating agency that issues ratings which forecast the credit worthiness of America's sovereign debt and it's ability to service said debt. Period. That's it. They have no business, whatsoever, making one mention of either party by name. I don't care if the White House is set on fire by the Tea Party tomorrow, S&P should stay the f*ck out of our political discussion and shouldn't issue debt forecasts based on the politics of the moment.

But if you want to take their downgrade for what it said, fine. I'm curious about where you stand on them calling for a raise of revenues three separate times; a position that one party was more than willing to accept as a part of an overall package, but there were no suitors on the other side of the aisle. They've pretty much said until revenues are a part of the mix, among other things, they stand by their downgrade.

What's more interesting is that market tanked another 600 points today, but treasuries held their own as investors fled for stability. That tells us two things: The market doesn't see inflation around the corner and it believes, contrary to the downgrade, that treasuries and bonds are a safe haven for investors for the immediate future.

With so much uncertainty, investors were leaving little to chance. Despite the downgrade of U.S. debt, Treasury prices rose, pushing yields lower, as investors fled into the relative safety of government-backed debt.

The yield on the benchmark 10-year U.S. Treasury fell to 2.34% from 2.56% late Friday.

"The Treasury market seems to be oblivious to the fact the U.S.' credit rating was downgraded," said Quincy Krosby, market strategist with Prudential Financial.

News alert...it doesn't matter how you THINK they should make the decisions. Your post was dismissive of the event. In the world of reality they made a downgrade and it f*cking matters. Whether it SHOULD matter isn't the point and whether they made the decision correctly isn't the point either.

As to the drum beat about compromise I keep hearing and specifically about things such as the debt ceiling being raised for eons without issue. The old saying about the definition of insanity being doing the same thing over and over comes to mind. The tea party group believes we need to stop spending money we don't have. They believe 100% that spending has to be curtailed in a major way. THEY DON'T WANT TO COMPROMISE ON IT. IT'S THE IMPORTANT THING TO THEM They took a stand. The debt celing represented the same old same old on spending. Now whether they are right about how to fix this is up to debate. That's what everyone, including our illustrious donkey of a President, should be figuring out together. How to fix this mess instead of winning political battles for our party and contributors.

But everyone needs to realize asking that the tea party members to compromise on the ONE SINGLE THING THEY CARE ABOUT is somewhat ludicrous. To them, choosing between not spending and a debt default (the occurrence of which was debatable anyways) is like choosing between a sh*t sandwich on rye and a sh*t sandwich on wheat.

These people got elected with a singular message and deserve a voice. They have enough representation to matter. Both Reps and Dems need to face that fact and deal with it.

Or we could keep listening to the all the politicians who keep calling the tea party crazy even though its all the same politicians who got us in this mess in the first place. Who are the crazy ones?

[FRPLG]

Originally Posted by 12thMan

So the S&P might be called to testify before Congress. The gloves are about to come off. This is getting ugly.

S&P investigated by Senate Banking Committee - Josh Boak - POLITICO.com

HAHAHA! So they S&P runs our political environment through the ringer and the those responsible for it are now gonna haul them in to answer for their crimes. That's rich! A bunch of thin-skinned thugs.

[JoeRedskin]

If they do try and haul these guys before a Senate committee, it will be an unmitigated disaster. Our debt is so out of hand that, as others have said, this downgrade should have happened years ago. There will be ample evidence in support of it - just based on numbers alone. All it these idiots will do is give S&P a chance to highlight just how idiotic the govt. is and make it seem like S&P was giving the U.S. a break.