Breaking News U.S Downgraded to AA+!

[bbit]

first time in 70 years!

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[dub0matic]

do you even know what that means kid

[bbit]

do you even know what that means kid

explain it to me dad ?

[LightRider]

The same fuckers who lied about predatory loan ratings and brought you the global financial credit crunch are now giving yet more "opinions" that will negatively affect millions of people and cause more needless suffering.

[DavinciJ15]

I am shocked that the rating agencies didn't wait until after a default.

[DavinciJ15]

do you even know what that means kid

explain it to me dad ?

Have you heard the statement...
"The US dollar gets it's value from the full faith and credit of the United States Government"

sooo if faith and credit is lost in the dollar what does that mean to you?

[samablog]

It seems to me that is S&P is to be criticized here it's for being late to acknowledge an obvious reality. The foul state of our country's financial affairs is in no small part driving my continued interest in Bitcon.  

[FlipPro]

 Get ready Tea Party GOP, your out in 2012...

[wumpus]

The beginning of the end?

[Mistafreeze]

Get ready Tea Party GOP, your out in 2012...

Oh holy fuck
 

[hugolp]

I am shocked that the rating agencies didn't wait until after a default.

Me too. Im very curious as to why they did it. I suspect there might be political reasons, because having the USA government with AAA for so long was ridiculous long ago, so why downgrade now?

[RSmith]

This downgrade proves that both the A and + keys on their keyboards work!  Amazing!  We should ask Wall Street how much it costs for an AAA... though we'll have to pay extra since they can't short the hell out of it.

[Ekaros]

When they test out the B?

[Ridi]

Revenge for the Dodd-Frank law and to prevent the governments regulation of rating agencies sounds like good motive.  http://www.thenation.com/blog/162555/it-time-downgrade-rating-agencies You have to get a few paragraphs in before it stops detailing government showboating and gets into the juicy bits.

But there’s also a more sinister theory afoot—one that involves a game of political hardball between rating agencies, particularly Standard and Poor’s, and the administration. In an exhaustive journal at firedoglake, Jane Hamsher catalogues an interesting confluence of events around Standard & Poor’s threat of downgrade unless $4 trillion in deficit reduction was achieved.

Since the 2008 economic collapse, Congress has been trying to regulate the rating agencies in a tougher manner, in order to force more fair evaluations. The agencies have naturally fought these efforts—and might be making things difficult for the administration as a demonstration of their political power, and to warn the administration off from more stringent regulation.

As Hamsher notes, Standard & Poor’s first debt warning came only months after Obama signed Dodd-Frank into law, which contained regulations on rating agencies, albeit mild ones. This was curious timing, since again there is no chance the United States would experience a debt crisis anytime soon and budget-busting tax cuts previously went unquestioned.

This year, on April 13, Treasury Secretary Timothy Geithner met with officials from Standard & Poor’s and asked them to hold off on any further reports until a budget was completed. But the SEC was in the midst of a series of proposed rule changes and potential investigations of Standard & Poor’s role in the economic collapse. And on that same day, the Coburn-Levin Senate Permanent Subcommittee on Investigations released a report saying the credit ratings agencies were a “key cause” of the financial crisis. The Subcommitee recommended the SEC use its authority to “hold credit ratings agencies accountable in civil lawsuits for inflated credit ratings.”

On April 15, Standard & Poor’s phoned the White House and told them they were issuing a press release providing yet another negative outlook on federal government debt, which it then did. This came at quite a politically sensitive time for the White House, as it was attempting to negotiate a debt ceiling increase with Republicans demanding huge cuts. Geithner had to do a round of talk show interviews the next day, disputing the Standard & Poor’s rating threat.

[CurbsideProphet]

I am shocked that the rating agencies didn't wait until after a default.

Me too. Im very curious as to why they did it. I suspect there might be political reasons, because having the USA government with AAA for so long was ridiculous long ago, so why downgrade now?

It was well stated that the rating agencies were not only looking for a raise in the debt ceiling but also a comprehensive plan to cut spending.  The S&P Chairman even put a number out, $4 trillion over 10 years.  It should also be noted that the cut was to AA+, rather than AA, which many had anticipated.  We'll see how the market reacts but I would not be all that surprised if we see somewhat of a relief rally on Monday as the downgrade was not as severe as it could have been.  (Although outlook is still negative so another downgrade can still come if the economy continues to deteriorate)

[hugolp]

Revenge for the Dodd-Frank law and to prevent the governments regulation of rating agencies sounds like good motive.  http://www.thenation.com/blog/162555/it-time-downgrade-rating-agencies You have to get a few paragraphs in before it stops detailing government showboating and gets into the juicy bits.

But there’s also a more sinister theory afoot—one that involves a game of political hardball between rating agencies, particularly Standard and Poor’s, and the administration. In an exhaustive journal at firedoglake, Jane Hamsher catalogues an interesting confluence of events around Standard & Poor’s threat of downgrade unless $4 trillion in deficit reduction was achieved.

Since the 2008 economic collapse, Congress has been trying to regulate the rating agencies in a tougher manner, in order to force more fair evaluations. The agencies have naturally fought these efforts—and might be making things difficult for the administration as a demonstration of their political power, and to warn the administration off from more stringent regulation.

As Hamsher notes, Standard & Poor’s first debt warning came only months after Obama signed Dodd-Frank into law, which contained regulations on rating agencies, albeit mild ones. This was curious timing, since again there is no chance the United States would experience a debt crisis anytime soon and budget-busting tax cuts previously went unquestioned.

This year, on April 13, Treasury Secretary Timothy Geithner met with officials from Standard & Poor’s and asked them to hold off on any further reports until a budget was completed. But the SEC was in the midst of a series of proposed rule changes and potential investigations of Standard & Poor’s role in the economic collapse. And on that same day, the Coburn-Levin Senate Permanent Subcommittee on Investigations released a report saying the credit ratings agencies were a “key cause” of the financial crisis. The Subcommitee recommended the SEC use its authority to “hold credit ratings agencies accountable in civil lawsuits for inflated credit ratings.”

On April 15, Standard & Poor’s phoned the White House and told them they were issuing a press release providing yet another negative outlook on federal government debt, which it then did. This came at quite a politically sensitive time for the White House, as it was attempting to negotiate a debt ceiling increase with Republicans demanding huge cuts. Geithner had to do a round of talk show interviews the next day, disputing the Standard & Poor’s rating threat.

Just for the record, the rating agencies are already regulated and have been for a long time. They are in fact a government created oligopoly with only a few agencies being granted permission by the government to rate assets and being accepted by different government bodies.

S&P is not opposed to being regulated, they just want the present regulation more in the favour.