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S&P drops US credit rating to AA+


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#1 Toan

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Posted 05 August 2011 - 08:25 PM

Title says it all, but here's a link to a CNN article and a Reuters article on the matter for more details.

I can't say that I didn't think it would happen. Kinda explains the 5% drop in the markets on Thursday. I can't say that I don't think it will wake up the clowns in DC, though. I quite like Lt. Ge. Russel Honoré's suggestion though.


Thoughts on the matter?

Frankly, I'm glad this formal announcement comes on a Friday ~8PM EDT. Markets are closed, so now the panic selling can be pushed off to Monday...

Spoiler

Edited by Toan, 05 August 2011 - 08:27 PM.


#2 deep

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Posted 05 August 2011 - 08:36 PM

Lt. Honore's article was a beautiful read. This whole measure seems more punitive than actually reflective of our ability to pay our debts, but I don't necessarily disagree with it.

#3 Egann

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Posted 06 August 2011 - 12:01 AM

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.In its report Friday, S&P ruled that the U.S. fell short: "The downgrade reflects our opinion that the ... plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."



S&P's hit this one on the head. Needless to say, our politicians aren't happy because this *will* mean lots of heads will roll in Washington.

The real problem is that, while we've agreed to 2 Trillion dollars in cuts, the federal government's RATES of increase won't change, so in five or eight years we'll be right back where we started. Like I said in the other thread, this whole affair has been a political charade.

While Lt. Honore's suggestion is a nice sentiment, realistically what we need is a way to break down the party's power in Washington. The GOP and Democrat parties have both become so old, fat, and large they no longer serve the American people or even just the constituents who elected them, but rather--as Honore pointed out--use disasters to justify their existences to their constituents.

The GOP tried to keep it a secret, but when the Tea Party republicans were sent to Washington this last election, the GOP sat them down and said "OK, we understand you were sent here for X, Y, and Z, but if you want any GOP funding for your reelection or to use the GOP network to collect votes for any of your bills, you will sell A, B, and C to your constituents instead. A, B, and C furthers our goals as a party. X, Y, and Z were nice campaign promises, but they do not serve the party."

Regardless of how you feel about the Tea Party, you should be HORRIFIED by that, and it's nice to see the system backfire like this.



#4 arunma

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Posted 06 August 2011 - 02:29 AM

Indeed I've thought that this whole debt ceiling issue has been quite the farce. So far no one has told me: if Congress didn't want to raise the debt ceiling, then why did they authorize the spending? Maybe Congress does need to go to boot camp. Or maybe Americans should stop voting for who they see on TV the most frequently. The reason politicians pander to special interests is because said interests can pay for their campaigns, and the reason they need money for their campaigns is because no one will vote for someone they haven't seen sufficiently often on TV.

Hmm, maybe Americans need to be in boot camp instead. Or, since there aren't enough boot camps for all of us, as a reasonable alternative maybe we should have to go on rations every time the president sends our soldiers to fight overseas wars, the way they did back in the day.

#5 SOAP

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Posted 06 August 2011 - 01:48 PM

Posted Image

#6 Toan

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Posted 06 August 2011 - 04:29 PM

I approve of that political cartoon's use of the interrobang.

#7 TheAvengerLever

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Posted 08 August 2011 - 11:44 AM

I think its sad because so many people are angry about the debt farce but no one is apparently angry enough to really do anything significant about it.

#8 Egann

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Posted 08 August 2011 - 11:12 PM

The real problem isn't just S&P's rating, actually. It's actually how China rates American bond. Again, the reasons cited are "we want to see your plan to pay us back our money."

Now I feel compelled to say something which I restrained from saying earlier. President Obama (and a good bit of Congress) are all dead when it comes to re-election. Long story short, we were told there was no risk of a credit downgrade--hell, we were even told the risk to a credit downgrade was if we did NOT make a debt-deal--and in the end, the debt deal our politicians made ONLY succeeded in preventing default. It did NOT increase overall trust in the American monetary system--in fact, it appears to have decreased it--and as a result the dollar will probably not be the global currency five or eight years from now the way it is now, and CERTAINLY not the way it was twenty years ago.

Normally, I'd say either the Euro or the Yen would replace the dollar, but as that Japan just had the tsunami and European Union is in almost as deep financial woes as the U.S. is...I'm seriously thinking that gold will be used as an interim standard until another fiat currency can be found (again, either the Euro or the Yen.)

Long story short, the dollar is no longer respected internationally. America is no longer a superpower; we can no longer use our political might to strong-arm ourselves into a position of economic might, so there's no easy way out of this one. President Obama has been at the wheel for three years, one of which he spent forcefully passing Healthcare...only for it to be shot down in court, and another two of which he has devoted himself to the economy and had a minimal effect. Now America has lost the international standing of it's currency.

Unless Obama can turn all of these around in his last year of office while campaigning--and remember, it's easier to destroy than to create--he will be ousted from office by pure voter ire.


(Notice I never once fingered Obama's policies; yes, I think that most of them were stupid, but there probably is also a grain of truth to inheriting "eight years of Bush." At the moment, however, voters will be thinking "four years of Carter" and even if most don't feel his failure is his own fault, being voted out of office will be political retribution; whether or not he was fully culpable, he was at the wheel when the ship sank.)

#9 Toan

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Posted 09 August 2011 - 01:24 AM

Egann, I think the S&P rating downgrade was a catalyst to your point on the strength of the dollar. And a tiny aside, but you forgot to mention the Swiss Franc - it may not be terribly widespread, but that is one heckuva stable currency. Either way, bad news bears. Also, we were promised that getting a debt deal in place before Aug 2nd would stave off any credit downgrade, yes. The problem here is that the deal that was signed was a shitty "too little too late" deal, and the moment that sucker was announced I said to myself "we're fucked." (Truthfully, I was saying that about a week before then with the other considered deals, but everyone remembers my "I'm disappointed" thread.)

Be that as it may, those who are in charge have unmistakably proven that they are entirely incompetent for the job. I don't mean single out Obama who signed this debt deal, and I don't mean to single out any House majority party who had a major part in this - I mean to say the entire current political face of this country, period. Neither party has shown any indication of a shred of mental aptitude to maturely handle the reigns on this country's uncontrollable debt. And frankly, come 2012 I really have no idea who will be left to vote for. (I'll tell you one thing, though: come that time, if I hear anything from a candidate about ridiculous social issues - gay marriage this, abortion that, blah blah blah - that candidate is immediately worthless to me as they've already demonstrated that they're too focused on partisan hackery bullshit instead of the one true thing that matters RIGHT THE FUCK NOW.)

Unless Obama can turn all of these around in his last year of office while campaigning--and remember, it's easier to destroy than to create--he will be ousted from office by pure voter ire.

(Notice I never once fingered Obama's policies; yes, I think that most of them were stupid, but there probably is also a grain of truth to inheriting "eight years of Bush." At the moment, however, voters will be thinking "four years of Carter" and even if most don't feel his failure is his own fault, being voted out of office will be political retribution; whether or not he was fully culpable, he was at the wheel when the ship sank.)

I really think the most damage that was done here is a direct result of the focus placed on the bolded. In his own words:



I find it highly disturbing that partisan hackery is the only thing that motivates these scum. Not serving their constituents or voting on their behalf or even following their solemnly sworn Oath of Office, but "make the other guy look bad; vote for me 2012".

And the worst thing is that they're directly fucking with our wallets while they do it.

Why is it our generation that has to suffer, pay for, and clean up every single mistake of those before us? As I said in my last thread, and take note of it: our American futures are getting robbed from us right before our very eyes.

Edited by Toan, 09 August 2011 - 05:23 PM.


#10 canas is back

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Posted 09 August 2011 - 03:30 PM

well all I have to say about this is Posted Image

ok not really. I do have to say that hopefully people start waking up on this issue

#11 Oberon Storm

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Posted 09 August 2011 - 09:20 PM

Shouldn't the downgrade have caused some sort of negative effect on treasury notes? I think the news on Monday was that while everyone was retreating from stocks they were snatching up the bonds. I think S&P jumped the gun.

#12 SL the Pyro

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Posted 11 August 2011 - 03:21 PM



Figured this was relevant.

#13 J-Roc

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Posted 18 November 2011 - 03:31 AM

Uh yeah don't worry they'll find a way to make sure Joe Public eats this shit.




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