U.S. loses AAA credit rating from S&P.

[feedtheego1982]

We'll see how this plays out. I'm disgusted at all of our "elected" officials for letting it get to this.. People are only out for self.. Pretty sure everything will be fine though. As long as the fear and hype machine doesn't get it's wheels turning..

 

[harm]

Originally Posted by HankMoody

Originally Posted by HARM

None of this matters to the average american ..

Life goes on

Funny thing is I'm being serious ..
Maybe the rich and upper middle class ..

But the lower Middle and poor don't give no !#%+* about this

 

[theone2401]

Originally Posted by HARM

Originally Posted by HankMoody

Originally Posted by HARM

None of this matters to the average american ..

Life goes on

Funny thing is I'm being serious ..
Maybe the rich and upper middle class ..

But the lower Middle and poor don't give no !#%+* about this

They will care when the government implements austerity measures....

No one benefits more from Government largess then them.

 

[pchen83]

Originally Posted by MoreUptempo

Originally Posted by pchen83

i'm not sure what S&P was waiting for.....it seems like they were waiting on the sidelines til the debt ceiling crisis was averted and then decided to wait a day for non farm payrolls to come out. I guess the number wasn't enough to the upside to change their minds. Either way, it doesn't bode well for the US and it's citizens as losing the AAA rating means that the faith in our ability to repay debts has been marginalized. This downgrade is inevitably passed down to us as interest rates go up (Higher Treasury Yields are needed to entice investors and reward them for taking on a "risky" asset) and taxes will follow suit.

Cliff Notes:
US Downgraded to AA-.
2 Year window for US to get act together or another downgrade is coming
Higher cost of borrowing for everyone
More unemployment
Double Dip Recession comes to fruition
Potential Depression


it'd be a good time to take your money out of the stock market and wait for the bottom again. Personally, i'm taking everything out monday (a week late, i know) and waiting until the Dow hits 9,500 before I invest again. At that point, it should be a good buying opportunity.

So is the official report AA+ or AA-??

 

[adiosburritos]

how do people still not know what's going on

 

[lukewarm skywalker]

Originally Posted by HARM

Originally Posted by HankMoody

Originally Posted by HARM

None of this matters to the average american ..

Life goes on

Funny thing is I'm being serious ..
Maybe the rich and upper middle class ..

But the lower Middle and poor don't give no !#%+* about this

Sadly enough, I completely agree with you. My Facebook news feed has all the proof that the avg. person is unaware of the things occurring in this country.

IDK man, sometimes I look around and I'm just like am I the only one who is paying attention to what's going on (present company, NT general community, excluded of course).

Ignorance is indeed bliss, and frankly, these days, I can't help but think that it's better to be uninformed. Reality is an unbearable pill these days, and for the foreseeable future.


...

 

[chaostheory]

About time the S&P got real and didn't lie to itself and the American people... 

 

[freshsince1982]

Where was s&p to rate all those sub prime mortgages less than AAA

 

[theone2401]

Originally Posted by Freshsince1982

Where was s&p to rate all those sub prime mortgages less than AAA

If they didnt rate them AAA they didnt get paid.

Makes.No.Sense.

 

[furrell]

Originally Posted by Freshsince1982

Where was s&p to rate all those sub prime mortgages less than AAA

Benefiting directly from it.

 

[fraij da 5 11]

Imma just learn German and bounce.

 

[furrell]

On AC360, they are saying that S&P knew of their $2 trillion error at 1:30 PM today and refused to go back on it at that point since the "train was already in motion".

S&P's insight is being called out right now due to the fact that they gave perfect bills of health to the I-Banks in 2008.

Most countries do not go abide by what S&P and Moody's say. They are saying this is a wake-up call but not armageddon.

 

[theone2401]

Originally Posted by Furrell

On AC360, they are saying that S&P knew of their $2 trillion error at 1:30 PM today and refused to go back on it at that point since the "train was already in motion".

S&P's insight is being called out right now due to the fact that they gave perfect bills of health to the I-Banks in 2008.

No one cares what the ratings agencies say to being with....the only thing that gives them credibility is the government it self. Unless they change the rules even if S&P says some off the wall +++% the institutions have to follow up because S&P is licensed...Its pure comedy

Government Intervention FAIL

The government hand picked the ratings agencies it wanted people to listen to because they thought they had them in the pocket. And now they are trying to discredit them.
You do not need to be a ratings agency or a financial guru to tell that the USA has to much debt. As do just about every other country on the planet.

Furrell forget what you are reading on AC360..

This is why what S&P says matters

A Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency (CRA) that issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes. Originally, seven rating agencies were recognized as NRSROs, a number that dwindled as a result of mergers to six by the mid-1990s[sup][1][/sup] and then to three by 2003.[sup][2][/sup] As of April 2011, ten organizations were designated as NRSROs.[sup][3][/sup]
Ratings by NRSROs are used for a variety of regulatory purposes in the United States. In addition to net capital requirements (described in more detail below), the SEC permits certain bond issuers to use a shorter prospectus form when issuing bonds if the issuer is older, has issued bonds before, and has a credit rating above a certain level. SEC regulations also require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without Federal Deposit Insurance Corporation insurance) comprise only securities with a very high rating from an NRSRO. Likewise, insurance regulators use credit ratings from NRSROs to ascertain the strength of the reserves held by insurance companies

 

[shoedinidc]

Wonder how far this game is gonna go

 

[bostonthreeparty]

Australia doesn't seem too bad right now.

 

[furrell]

Originally Posted by theone2401

Originally Posted by Furrell

On AC360, they are saying that S&P knew of their $2 trillion error at 1:30 PM today and refused to go back on it at that point since the "train was already in motion".

S&P's insight is being called out right now due to the fact that they gave perfect bills of health to the I-Banks in 2008.

No one cares what the ratings agencies say to being with....the only thing that gives them credibility is the government it self. Unless they change the rules even if S&P says some off the wall +++% the institutions have to follow up because S&P is licensed...Its pure comedy

Government Intervention FAIL

The government hand picked the ratings agencies it wanted people to listen to because they thought they had them in the pocket. And now they are trying to discredit them.
You do not need to be a ratings agency or a financial guru to tell that the USA has to much debt. As do just about every other country on the planet.

Furrell forget what you are reading on AC360..

This is why what S&P says matters

A Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency (CRA) that issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes. Originally, seven rating agencies were recognized as NRSROs, a number that dwindled as a result of mergers to six by the mid-1990s[sup][1][/sup] and then to three by 2003.[sup][2][/sup] As of April 2011, ten organizations were designated as NRSROs.[sup][3][/sup]
Ratings by NRSROs are used for a variety of regulatory purposes in the United States. In addition to net capital requirements (described in more detail below), the SEC permits certain bond issuers to use a shorter prospectus form when issuing bonds if the issuer is older, has issued bonds before, and has a credit rating above a certain level. SEC regulations also require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without Federal Deposit Insurance Corporation insurance) comprise only securities with a very high rating from an NRSRO. Likewise, insurance regulators use credit ratings from NRSROs to ascertain the strength of the reserves held by insurance companies

Ok. I read that.

Question: Why is the AA+ rating made to be the scarlet letter when there are other G-20 nations that have the same amount of debt and/or more?

 

[harm]

Originally Posted by theone2401

Originally Posted by HARM

Originally Posted by HankMoody

Funny thing is I'm being serious ..
Maybe the rich and upper middle class ..

But the lower Middle and poor don't give no !#%+* about this

They will care when the government implements austerity measures....

No one benefits more from Government largess then them.

Honestly .. The poor is used to struggling , this !$@! will be nothing new ..

Will def be more crime tho imo

Pushing the american people to wall .. what you think is gonna happen?

At the end of the day the US goverment %+%#!% off all of $$ in the last decade in a meaningless wars , bailing out these big businesses and banks

The Repubs and Dem's are too stubborn and dim witted to get their !$@! together and come together to solve this issue

Honestly I dont think they give a damn either 

 

[theone2401]

And right on cue.


The banking system is told to ignore this

Full release:

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency

Agencies Issue Guidance on Federal Debt

Earlier today, Standard & Poor’s rating agency lowered the long-term rating of the U.S. government and federal agencies from AAA to AA+. With regard to this action, the federal banking agencies are providing the following guidance to banks, savings associations, credit unions, and bank and savings and loan holding companies (collectively, banking organizations)

For risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities will not change. The treatment of Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored entities under other federal banking agency regulations, including, for example, the Federal Reserve Board’s Regulation W, will also be unaffected.

Question: Why is the AA+ rating made to be the scarlet letter when there are other G-20 nations that have the same amount of debt and/or more?
Well on one the one had I agree it is being overblown but there are real potential consequences. To answer your question though read the actual report from S&P if you want to find out why they downgraded the US and not some other AAA rated sovereign I cannot explain it better than them.

From S&P

The downgrade reflects our opinion that the fiscal consolidation 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.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

 

[furrell]

Also, why isn't Congress being dragged back to Washington? They damn sure couldn't wait to high tail it out of DC to enjoy their five week, paid vacation.

It'd almost be funny if it weren't sad. People were mocking the Chinese agency that lowered the rating. Now that S&P does it, people go

Sheer STUPIDITY in this society.

Alright we get it, you hate America. Do you have to make it known in every thread?

 

[finnns2003]

It'd almost be funny if it weren't sad. People were mocking the Chinese agency that lowered the rating. Now that S&P does it, people go

Sheer STUPIDITY in this society.

 

[rashi]

Really none of this matters, the markets knew this already.

 

[Johnny_Cakes]

Who was it that said on here that S&P and Moody's would never lower our rating?

 

[rashi]

I remember Tim Geithner said awhile ago that the U.S. wasn't a risk for being downgraded.

 

[iye2]

Originally Posted by theone2401

Originally Posted by Freshsince1982

Where was s&p to rate all those sub prime mortgages less than AAA

If they didnt rate them AAA they didnt get paid.

Makes.No.Sense.

This is my biggest problem with all of this.

 

[Kimchi Papi]

This essentially means it will cost the U.S. more (proly significantly more) to borrow money. It will also have a cascading negative effect on an already poor U.S. economy. The extent of how negative this will be has yet to be determined. I forget who said this earlier in the thread, but if anyone has a significant amount of money in the stock market it would be wise to sell off now because the market will crash again.