USA has credit rating cut by Standard & Poors

MyPeopleDrankTheSoup · 06-08-2011 03:09PM

uberalles wrote: »

Anyone see "Inside Job". Academy Award winning documentary.
http://www.sonyclassics.com/insidejob/

These rating agencies are the same w*nkers that gave bundled sub prime mortgages AAA ratings so pension funds could invest in them.

When asked how they have been so wrong? they replied – “it was just our opinion”.

They like coke and hookers.

this isn't really aimed at you but i am sick of people who've seen this one, biased,michael moore style documentary and suddenly they're experts on the financial crisis.

SamHarris · 06-08-2011 03:23PM

Kev_ps3 wrote: »

Yeah well you can hope all you want, they wont be.

THey certainly will be barring some sort of catastrophe, they just wont be the only superpower.

SamHarris · 06-08-2011 03:25PM

Zachary Nice Keyhole wrote: »

They are still rated AA+ by S&P and still AAA rated by Moddy's. Your pension funds and banks will still be buying bonds from them on monday morning.

USA isnt Ireland, their ability to generate the money needed to pay off their debt is unlike any other world economy, hopefully this means congress has to wake up and realise the wealthy need to take some of the hit in tax bills etc.

It was a judgment on the political will and climate to get things done, rather than a shot at the American ability to pay debt with regards to a purely economic outlook.

southsiderosie · 06-08-2011 03:50PM

messymess wrote: »

Couple of thoughts on this ...

How soon do you think it will be before some of the high ranking execs at S&P's have their extra marital affairs etc dragged out of the closet by the US gov as a way to say '**** you'.

Also, if the IMF ever need to loan money to the USA, how quickly do you think that will happen? Considering they locked up their top guy for a few months because a maid with inks to serious criminality made a bogus sexual assault claim.

Oh, come on, this is just nonsense.

S&P didn't say anything that the dogs in the street don't know: political gridlock is affecting the US's ability to reduce its debt. Yet come Monday, the world will still buy t-bills.

Also, I highly doubt that the US will ever need an IMF loan.

Mike 1972 · 06-08-2011 04:01PM

messymess wrote: »

How soon do you think it will be before some of the high ranking execs at S&P's have their extra marital affairs etc dragged out of the closet by the US gov as a way to say '**** you'.

Theyre not politicians/celebrities/sports stars. Other than those directly involved/affected hardly anyone knows who these people are letalone gives a flying fiddlers about how much they partake in the joys of coke and hookers.

cursai · 06-08-2011 04:15PM

Buy Turf its gonna be a rare commodity soon!

uberalles · 06-08-2011 06:31PM

georgiecasey wrote: »

this isn't really aimed at you but i am sick of people who've seen this one, biased,michael moore style documentary and suddenly they're experts on the financial crisis.

I dont take it personally. Im fairly well informed and my opinion is not just based on seeing one documentary. Im well researched on the subject.

Im intitled to my opinion as is everone else.

This thread is specifically about S&P. My post is directly relevant.

if I remember correctly someone representing S&P was being grilled at some sort of enquiry in the USA. He was asked a direct question - why had his ratings company given AAA status to complete crap. “It was just our opinion”. They put their stamp of approval on crap which allowed pension funds to invest in it and loose investors money. Without AAA status managers wouldn’t have been able to risk hard working peoples money.

They get bonuses if they are right. No claw back if they are wrong.

These senior bankers are w*nkers. They have no shame.

later12 · 06-08-2011 07:01PM

CRAs are not banks. Nor are CRAs staffed by bankers.

They are concerned with risk analysis.

There are procedures that preclude such key individuals from criss-crossing into the banking sector or having outside interests, including shareholdings and directorships, or other paid positions which could compromise their influence over ratings decisions.

It's unclear why you refer to senior bankers in the context of ratings agencies. Presumably CRAs get delivered to that angry black box in your brain with BWANKRZ written on it.

ballsymchugh · 06-08-2011 07:15PM

georgiecasey wrote: »

this isn't really aimed at you but i am sick of people who've seen this one, biased,michael moore style documentary and suddenly they're experts on the financial crisis.

inside job makes you want to get a rifle and plant yourself across the road from wall street and pick off a few people.

they did make an interesting point on the ratings agencies though. i hadn't heard so much about them before they were hacking away at ireland's credit rating, but to think that they rated AIG as AAA the day before it was bailed out, and then to say things like it's only an opinion makes you wonder why their opinion is quoted so much.

Mike 1972 · 06-08-2011 07:18PM

Mr. Denton wrote: »

Well if it's not them then it'll just be someone else. It's how capitalism works. When China takes over the show they'll probably behave just the same (or worse).

+1

Im as up for having a go at US foreign policy as the next guy but the prospect of China succeeding the US as a "superpower" anytime soon is just :eek:

amacca · 06-08-2011 07:22PM

if this continued indefinitely, sooner or later..Standard and Poors, Moodys, Fitch etc will have very little left to downgrade...it would all either have reached junk status or be a triple A rated bubble.

except that wont happen will it?............its all to interlinked...................too many opposing forces...not enough profit to be made and the potential for huge unpalatable losses for too many people no matter what your net worth is.

Am I wrong in thinking there will be a solution that will more than likely preserve the euro, keep the dollar more or less intact etc..it will just be a long drawn out messy solution because currently politicians are running around like rabbits caught in the headlights of an oncoming car but they wont/cant continue with this?

mickydoomsux · 06-08-2011 07:38PM

ballsymchugh wrote: »

ibut to think that they rated AIG as AAA the day before it was bailed out, and then to say things like it's only an opinion makes you wonder why their opinion is quoted so much.

Because nothing, and i mean nothing, sells quite like bad news.

uberalles · 06-08-2011 07:56PM

ballsymchugh wrote: »

inside job makes you want to get a rifle and plant yourself across the road from wall street and pick off a few people.

they did make an interesting point on the ratings agencies though. i hadn't heard so much about them before they were hacking away at ireland's credit rating, but to think that they rated AIG as AAA the day before it was bailed out, and then to say things like it's only an opinion makes you wonder why their opinion is quoted so much.

Exactly. They get it so wrong a lot of the time.

Spread · 06-08-2011 08:25PM

I wonder what Tim Geithner will think of this after telling everyone, back in April, that S&P's valuation would be OK. 'Twould be nice if himself and that other well known con Krugman, could be sat together at the table and forced to give their explanation on the differences between the US's plight and that of their bete noir - Ireland.

later12 · 06-08-2011 08:30PM

You think Ireland is the Fed's bête noire? That's almost funny.

Ireland is the piece of dirt under the little toenail, of the little insect, crawling around in the slurry pit that is the ongoing financial crisis. As a single entity, we really, really do not figure anywhere.

southsiderosie · 06-08-2011 08:31PM

Spread wrote: »

I wonder what Tim Geithner will think of this after telling everyone, back in April, that S&P's valuation would be OK. 'Twould be nice if himself and that other well known con Krugman, could be sat together at the table and forced to give their explanation on the differences between the US's plight and that of their bete noir - Ireland.

One is the world's biggest economy that controls the world's reserve currency while the other has a smaller population than the Greater Chicago area?

Helix · 06-08-2011 09:06PM

Mike 1972 wrote: »

+1

Im as up for having a go at US foreign policy as the next guy but the prospect of China succeeding the US as a "superpower" anytime soon is just :eek:

doesnt the states owe china $1.14 trillion as things stand?

MyPeopleDrankTheSoup · 06-08-2011 09:09PM

ballsymchugh wrote: »

inside job makes you want to get a rifle and plant yourself across the road from wall street and pick off a few people.

it just annoyed me with the sensationalism, like they asked some guy a question, he was silent for a second, then they cut away. what was the point of that?

i only got real good info in books, especially 'too big to fail' by andrew ross sorkin, it was a gerald loeb winner. NOT the docu-drama they made from it, i assume that's crap

Mike 1972 · 06-08-2011 09:12PM

Helix wrote: »

doesnt the states owe china $1.14 trillion as things stand?

Yes but on the other hand the US buys a lot of crap off them.

They are both heavily dependent on each other and it may not be an entirely bad thing.

Killer Pigeon · 06-08-2011 09:12PM

I'm going to start investing all my money in gold come Monday morning. The Euro and Dollar are going to become worthless!

I'm preparing for "Wall Street Crash 2.0".

I envisage the rest of the 2010's and early 2020's being like or worse than the Great Depression of the 1930's.

On a separate note, we should keep an eye on the Chinese government; they're calling for a new "world currency". I found that quite unsettling.

southsiderosie · 06-08-2011 09:13PM

Mike 1972 wrote: »

Yes but on the other hand the US buys a lot of crap off them.

It's like mutually assured (economic) destruction.

uberalles · 06-08-2011 09:24PM

georgiecasey wrote: »

it just annoyed me with the sensationalism, like they asked some guy a question, he was silent for a second, then they cut away. what was the point of that?

i only got real good info in books, especially 'too big to fail' by andrew ross sorkin, it was a gerald loeb winner. NOT the docu-drama they made from it, i assume that's crap

It was sensationalism but not all of it was crap. People being evicted from their homes is always sad and thats the reality all over the world.

southsiderosie · 06-08-2011 09:32PM

Killer Pigeon wrote: »

On a separate note, we should keep an eye on the Chinese government; they're calling for a new "world currency". I found that quite unsettling.

But the Chinese are part of the problem. The Chinese and Germans want to be exporters, and domestic consumption is relatively low (and their consumers are notoriously frugal). So they need other countries to be consumers, and their investors move their money abroad in search of better returns. Then they get mad when their trading partners end up fat and broke.

China cannot call for a more balanced world economy until it is more willing to acknowledge and accept its role in making the structure of the global trading system what it is today.

Spread · 06-08-2011 09:37PM

later10 wrote: »

You think Ireland is the Fed's bête noire? That's almost funny.

Ireland is the piece of dirt under the little toenail, of the little insect, crawling around in the slurry pit that is the ongoing financial crisis. As a single entity, we really, really do not figure anywhere.

Then he should stop wasting his employer's time talking about Ireland's woes. And why did he NOT WANT to get the major Irish bondholders burned - if Ireland is the little dung ball that you say it is.

southsiderosie wrote: »

One is the world's biggest economy that controls the world's reserve currency while the other has a smaller population than the Greater Chicago area?

And one is an economic sink hole whilst the other is reining in it's excesses.

If you read Krugman's scribblings in the NY Times, you'll see what I mean. As he spends thousands of words ranting about a non entity, Janet Robinson should spend her money elsewhere.

In this day and age all countries are links in the economic chain. If one goes turtle everyone feels the ripple.

southsiderosie · 06-08-2011 10:12PM

Spread wrote: »

Then he should stop wasting his employer's time talking about Ireland's woes. And why did he NOT WANT to get the major Irish bondholders burned - if Ireland is the little dung ball that you say it is.

And one is an economic sink hole whilst the other is reining in it's excesses.

If you read Krugman's scribblings in the NY Times, you'll see what I mean. As he spends thousands of words ranting about a non entity, Murdoch should spend his money elsewhere.

In this day and age all countries are links in the economic chain. If one goes turtle everyone feels the ripple.

Krugman writes about Ireland because 1) the socialization of private losses seems to be a key part of neoconservative political economy, which he (rightly) hates, 2) he thinks the way the ECB and the German government has dealt with Ireland is hugely problematic and 3) Americans actually care about what happens in Ireland. The last four years of economic policy in Ireland represents everything that Krugman hates, so it is a great well for him to draw from - repeatedly.

And what does Murdoch have to do with this?

Spread · 06-08-2011 10:31PM

southsiderosie wrote: »

And what does Murdoch have to do with this?

My mistake .........for Murdoch read Janet Robinson

later12 · 06-08-2011 10:56PM

Spread wrote: »

Then he should stop wasting his employer's time talking about Ireland's woes. And why did he NOT WANT to get the major Irish bondholders burned - if Ireland is the little dung ball that you say it is.

It's quite simple. Ireland is a ciliated protozoon of Europe: an opportunistic parasite feeding from the edge of the European organism.

The reason it can sometimes be of interest to academics and market participants is that when it gets sick it can (1) indicate a sickness emanating from the core organism or (2) it can be a warning bell that all the little protozoa may together be transmitting a morbidity to the parent organism.

This is not about us. We are not the big fish. The core of Europe are the big fish; Ireland is just a little protozoon that hangs from it. That's why when trying to inhibit contagion, you first look to eradicating trouble in these little critters. If trouble is not eradicated there, that's ok, you can still rescue the big fish another way. The main concern is never the little guy, and the little guy is never the bête noire.

Another poster said that one reason for the attention was that 'Americans actually care about what happens to Ireland. It isn't. I don't think it helps to talk in such an emotive way, and in fact I find that sort of discourse a little condescending. The US and Ireland may have friendly diplomatic relations, but business is business, and we each have our own, sometimes contrasting, interests, ours ideally being firmly aligned with Europe's, and not those of the US.

southsiderosie · 06-08-2011 11:03PM

later10 wrote: »

Another poster said that one reason for the attention was that 'Americans actually care about what happens to Ireland. It isn't. I don't think it helps to talk in such an emotive way, and in fact I find that sort of discourse a little condescending. The US and Ireland may have friendly diplomatic relations, but business is business, and we each have our own, sometimes contrasting, interests, ours ideally being firmly aligned with Europe's, and not those of the US.

Ireland gets FAR more media coverage in the US than its size or economic importance warrants, mainly owing to the large American population of Irish descent who, while they may not follow Irish politics closely, are interested in news about the country. The Taoiseach gets an audience with the President every year; this is not the case for the PM of Denmark or Iceland or other small European countries. And given how dire US media coverage is of international news in general, the coverage given to Ireland is even more striking.

Absurdum · 06-08-2011 11:05PM

hmm these S&P guys seem to know their stuff, I'm gonna put all my money into Lehman Brothers

later buddies

later12 · 06-08-2011 11:10PM

I don't believe the coverage is particularly heavy. And I don't think we need to really care. Like I said, Ireland's main interest is in Europe, and that is where our recovery will originate.

USA has credit rating cut by Standard & Poors

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