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  • Is It Time to Buy? [View article]
    I also agree that it may be ripe to buy the US market indices given the low PE ratios, oversold conditions and the fact that the market believes that AA+ is the same at AAA. Even S&P thinks that based on their own default study, this downgrade is about politicals not historical or statistical default data.
    Aug 9, 2011. 06:07 PM | Likes Like |Link to Comment
  • Warren Buffett's Drum Banging a Repeated Warning on Inflation [View article]
    I think the rating ageny's view is not just about the US's ability to pay, but rather the country's entire long-term credit profile. Sure, the US can print money, but the aftermath of such a move would result in inflationary forces that would leave the country in quite a debacle. Interest rates would soar and the U.S. would face a host of different, but just as painful economic issues. I think S&P's main point is that the risk of the US default is still very very low, but because of the political climate the risk is not "virtually zero". It's about the government's inability to execute and balance the budget.

    Love it or hate it, I think the US leaders needed more than just a "warning shot over the bow" to get the point across that politicing and our cocaine-like debt and spending habits will eventually impact other's view of our ability to meet financial obligations.
    Aug 8, 2011. 01:44 PM | 1 Like Like |Link to Comment
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