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  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    funny!
    Aug 7 01:04 PM | Likes Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    Heuh... what criminal is what they did to subprime, CDOs and CDS in the first place. Are you seriously relying on their advice? See my comment to DwightR above.
    Aug 7 01:03 PM | 1 Like Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    I am glad he does. He may have some influence over Moody's.
    Aug 7 12:59 PM | Likes Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    Does anyone here really think that we should increase taxes to deserve a triple A rating?

    Remember, taxes are a transfer of Debt from the Public to the Private sector, except there it shows as lower Net Worth because of a decrease in Assets. As a nation, which is what S&P is officially concerned with, we would not be financially sounder. Yet, this is what S&P is asking for.

    Also, Dwight, you may want to look at my table at seekingalpha.com/artic.... If we don't, why should the UK, France and Germany do. As to Canada, their rating is tied to the Oil and Gold markets. Comes and goes.
    Aug 7 12:58 PM | Likes Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    They actually did not, which is very strange. What is even stranger is that after the error discovery, they apparently consulted with their European committee members prior to maintaining the downgrade. Given their misplaced fondness for the remnants pillars of the Old Continent, I wonder how much weight did Europe carry in their decision. seekingalpha.com/artic...
    Aug 7 12:50 PM | 1 Like Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    correcto.
    Aug 7 12:45 PM | Likes Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    And Dagong in June.
    Aug 7 12:43 PM | Likes Like |Link to Comment
  • U.S. Downgraded by S&P - We're AA+ Now [View article]
    correct.
    Aug 7 12:38 PM | Likes Like |Link to Comment
  • S&P 500 Target 1190 and Corzine, The Fox in the Hen House [View article]
    Actually, I disagree with you on Dr. Ben - I am quite OK with all the others, and then some.
    Aug 7 12:21 PM | Likes Like |Link to Comment
  • S&P's U.S. Downgrade Is a Sham and a Shame [View article]
    Thank you Rick. It occurs to me that there is a major flaw in their political argument. In a nutshell, they are asking for more taxes while requesting less debt for the nation as a whole. Well, taxes are merely a transfer of debt from the Public to the Private sector, where it does not show as debt but as lower after tax income, thus lower Net Worth. So the country is not better off, nor more financially sound. What we need, as you say is to cut entitlements. But S&P won't go there - they have a popularity contest to win.

    Also, I am not familiar with the inner workings of this group - I can't really call it a rating agency - but apparently, once Treasury questionned the downgrade based on a $2 trillion errror, which they admitted to, they then consulted with their European committee members in the middle of the night. Given their misplaced fondness for the remnant pillars of the Old Continent, I wonder what weight Europe had in the downgrade. But it is just the cynical me thinking outloud, I suppose.
    Aug 7 12:15 PM | Likes Like |Link to Comment
  • S&P's U.S. Downgrade Is a Sham and a Shame [View article]
    I have no problem with that, and I agree with ricksteph. The good news, if you are correct, is that the news is priced in.
    Aug 7 12:05 PM | Likes Like |Link to Comment
  • S&P Downgrade: Prospects for Dangerous Bifurcation of Sentiment [View article]
    James, thanks for pointing me to your article. While I agree that it is perception that matters, I also believe Joe Blow is a herd follower. You are correct in that the markets are the ratings agencies, in particular for bonds - even though they obviously got it wrong before the crisis. BTW, they got it wrong because S&P and the others were able to convince the world that their rating was worth the paper it was written on. Turned out to be toilet paper. They are not going to convince the world this time around. Let's see if the markets prove them wrong. If they do, no worries about Joe Blow.

    The real impact this downgrade has is to further the gulf S&P is referring to. I am amazed at the political tenor of their release. Which led to me to this: S&P is worried about the debt, and thinks taxes shoould be raised. At first read, I glossed over this, motherhood and apple pie. Well, there is a basic contradiction in their position.

    Let's say we spend $10 trillion more. The question is, how do we finance this, right? We have a choice. Either we rely on the investing public, through debt issuance, or we raise taxes. Assume we raise taxes. The money comes out of pretax income, therefore from Household and Corporate Net Worth, and we have not increased the Public Debt. That's what S&P wants. Now, is the country better off? Nope. We have merely transferred Debt from the Public to the Private sector. For sure, it does not show as an increase in Debt in Household Net Worth, but as a decrease in Assets through higher taxes.

    If S&P was serious about this, they would not give Harry Reid et al. any fuel. To the contrary, they should ask for more spending cuts - which they admit they know nothing about. Remember, it's a popularity contest for this pig. The other thing is, if there was no credit risk, they would have no business. Turmoil is good for them.
    Aug 7 11:52 AM | Likes Like |Link to Comment
  • S&P's U.S. Downgrade Is a Sham and a Shame [View article]
    Thank you bionic. In reading related comments, apparently S&P consulted with its European committee members after Treasury pointed out a $2 trillion error. I wonder what influence Europe had on S&P's decision. In any case, we'll soon have the market's verdict. Personally, I expect a dollar rally based on Europe's inability to stop the bleeding. Trichet is simply posturing as a fake Scarlet Pimpernel: if you don't buy Italian bonds, "apres moi le deluge".
    Aug 7 11:22 AM | Likes Like |Link to Comment
  • Don't Worry About U.S. Downgrade [View article]
    re external debt, see my comment down below. Japan stands at 45% of GDP, the US at 95%, Germany at 142%, France at 182%, and the UK at... 400%. Ireland, of course, is the winner, at 1103% - most of it owed to... the UK. So much for AAA.
    Aug 7 10:42 AM | 1 Like Like |Link to Comment
  • Don't Worry About U.S. Downgrade [View article]
    re your last point, see my comment down below.
    Aug 7 10:39 AM | Likes Like |Link to Comment
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