S&P Downgrades US Credit Rating to AA-Plus

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Darryl1958 said:
Of course Republicans want Obama to be a one-term president otherwise they would not be Republicans. but to think that anyone with investments is not sickened to the stomach over what is happening to their wealth under Obama’s incompetent watch is completely ludicrous.
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Two of my funds plunged yesterday and I couldn’t figure out why, since they’re both holding foreign debt. Then I remembered they both have exposure to the US Treasuries; yet the U.S.Treasuries alone shot up (and the dollar went up) and that’s what baffling the analysts.

That said, I can’t say the downgrade was undeserved. Let’s face it, there were times during the last month, those holding Treasuries were worried that they wouldn’t be paid on time. It’s not that the Fed can’t print money to pay them; they can but there was hesitancy to invoke the 14th Amendment on the part of the Administration that was cause for concern.
 
7_Sorrows said:
i remember the stock market crash in october of 1987, but i don’t remember Reagan being our president at that time?? :confused:
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He was and the crash occurred just a few months after he “fired” Volcker (a very dumb move, in my opinion) and appointed Greenspan, who at that time was a very devoted advocate of Ayn Rand, whose mission it was to abolish the Fed. Greenspan changed his tune the day after the crash and started adding liquidity to the markets (lower short-term interest rates and lower margin requirements). I don’t know if Bernanke can do any more than he already has as he’s the one who’s been running up the debt on the balance sheet in the first place.
 
sub_rosa said:
The tea party was applauding the fact the our credit was downgraded. Can you imagine that? They are actually trying to bring this country to our knees. To what purpose? Party first and country last? What in the world is happening in this country?
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The Tea Party is mainly composed of middle-middle and upper-middle class people; the very people who are undoubtedly hit hardest by the stock market augering in. The only people who are going to make money (already have) on this are the big short sellers; the hedge funds whose actions can actually move markets and whose connections are such that they can reasonably predict (or simply know) about negative future events. People like, oh, George Soros, who made billions shorting and destroying the “Asian Tigers” economies and crashing the Bank of England (England’s “federal reserve”) and bragged about it. For somebody, or several somebodies like him, sending the U.S. into a downward spiral would be the “short of all time”, and it’s foolish to suppose there aren’t those whose purpose it is to help it along. When they have political allies who, either from intent or ignorance, do everything in their power to weaken the economy, it’s a playground for them. Like taking candy from a baby.

Tea Partiers are a varied group and, I am sure, don’t all think alike. But I’m sure that to whatever extent this slide provides them with any satisfaction, it would only be in recognizing the fact that they have been right about this administration all along; like somebody who believed for years that he had low-grade diabetes and finally has it confirmed. Otherwise, I’m sure it’s nothing but pain for most of them.
 
Alan55 said:
Actually, the definition used by the Obama administration was $250,000 per year. And the “tax increases” involved a return to the tax rate that they enjoyed before the Bush dramatically reduced their taxes in 2001, tax cuts that were supposed to have expired at the end of 2010, not only for the wealthiest Americans, but for all. In fact, the Obama administration has wanted to keep the lower tax rates for those earning less than $250,000. That translates into “tax increases” for the rich only in Republican-speak. The truth of the matter is that the Obama administration has sought a tax decrease for those earning less than $250,000 a year, assuming that the Bush tax cuts expire as they were supposed to.
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I’m wondering why you aren’t willing to pay your fair share. If taxes must be raised, let’s rescind ALL the evil Bush tax cuts. Why are you so greedy? Why won’t you DEMAND to be taxed at the Clinton tax rates?
 
zz912 said:
I’m wondering why you aren’t willing to pay your fair share. If taxes must be raised, let’s rescind ALL the evil Bush tax cuts. Why are you so greedy? Why won’t you DEMAND to be taxed at the Clinton tax rates?
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Going back to the Clinton tax rates will accomplish nothing. You also need to go back to the Clinton spending rates and that is something nobody (Tea Party, Republocrats and Demopublicans will think about.)
We have a revenue problem because there is a shrinking manufacturing base to tax, and the service sector cannot cover the un-employed that used to be in manufacturing.
We have a spending problem because of all the little piggy’s drawn to the sows teat to get there free government money.
It really is basic for business and countries alike: produce , compete, or parish.
 
Ridgerunner said:
The Tea Party is mainly composed of middle-middle and upper-middle class people; the very people who are undoubtedly hit hardest by the stock market augering in. The only people who are going to make money (already have) on this are the big short sellers; the hedge funds whose actions can actually move markets and whose connections are such that they can reasonably predict (or simply know) about negative future events. People like, oh, George Soros, who made billions shorting and destroying the “Asian Tigers” economies and crashing the Bank of England (England’s “federal reserve”) and bragged about it. For somebody, or several somebodies like him, sending the U.S. into a downward spiral would be the “short of all time”, and it’s foolish to suppose there aren’t those whose purpose it is to help it along. When they have political allies who, either from intent or ignorance, do everything in their power to weaken the economy, it’s a playground for them. Like taking candy from a baby.

Tea Partiers are a varied group and, I am sure, don’t all think alike. But I’m sure that to whatever extent this slide provides them with any satisfaction, it would only be in recognizing the fact that they have been right about this administration all along; like somebody who believed for years that he had low-grade diabetes and finally has it confirmed. Otherwise, I’m sure it’s nothing but pain for most of them.
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And I highly doubt any of the posters who are critical of the Tea Party have ever attended a meeting - and they tend to believe the propoganda.
 
ProVobis said:
Two of my funds plunged yesterday and I couldn’t figure out why, since they’re both holding foreign debt. Then I remembered they both have exposure to the US Treasuries; yet the U.S.Treasuries alone shot up (and the dollar went up) and that’s what baffling the analysts.

That said, I can’t say the downgrade was undeserved. Let’s face it, there were times during the last month, those holding Treasuries were worried that they wouldn’t be paid on time. It’s not that the Fed can’t print money to pay them; they can but there was hesitancy to invoke the 14th Amendment on the part of the Administration that was cause for concern.
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What the presidency can or cannot do unilaterally is an unsettled question, Also there is every reason to believe that S&P was acting in good faith in what they did. As you seem to have been pointing out in previous posts, this is a response to an ongoing problem with American govenment in general that goes much deeper than any one administration.

That being said, seeing the common sense of the tea party movement that spending and size of government needs to be reined in is a far cry from any suggestion that people are getting pleasure from actions that are ruining their investments. Downgrading the debt ceiling just reflects the reality that all Americans need to face up to.
The actual mechanics of the economy are complicated and how much good or harm Fed manipulations end up doing is an unsettled question, probably beyond the scope of the expertise of any modern president. But the bottom line remains the same. Spending is out of control. No amount of taxation can fix it. That is one reason why the president and Democrats remain so vague on hard figures of what is the fair share. Increasing taxes will never be enough if spending is not brought under control.
That part of the economy at least is not rocket science. Understanding what the Fed does to create something from nothing as a response to overspending may well be tocket science, but spending more than our paycheque is something that all of us can relate to.

It just can’t be done for too long, without dire consequences.
 
Darryl1958 said:
What the presidency can or cannot do unilaterally is an unsettled question, Also there is every reason to believe that S&P was acting in good faith in what they did. As you seem to have been pointing out in previous posts, this is a response to an ongoing problem with American govenment in general that goes much deeper than any one administration.

That being said, seeing the common sense of the tea party movement that spending and size of government needs to be reined in is a far cry from any suggestion that people are getting pleasure from actions that are ruining their investments. Downgrading the debt ceiling just reflects the reality that all Americans need to face up to.
The actual mechanics of the economy are complicated and how much good or harm Fed manipulations end up doing is an unsettled question, probably beyond the scope of the expertise of any modern president. But the bottom line remains the same. Spending is out of control. No amount of taxation can fix it. That is one reason why the president and Democrats remain so vague on hard figures of what is the fair share. Increasing taxes will never be enough if spending is not brought under control.
That part of the economy at least is not rocket science. Understanding what the Fed does to create something from nothing as a response to overspending may well be rocket science, but spending more than our paycheque is something that all of us can relate to.

It just can’t be done for too long, without dire consequences.
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Darryl1958 said:
Spending is out of control.
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No doubt, but your credit-worthiness is whether you can pay for it or not in a timely way. Even passing a massive revenue-enhancing measure of some type cannot guarantee immediate funds available if the U.S. were attacked, for example. So you have to borrow, even overnight, if necessary. Threatening not to pay on your obligations is not a good thing. Nixon tried it too, but realized he had to abandon the gold standard in order to pay off the debt. They didn’t like having to take our printed currency but they had no choice.
 
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