Cardboard Posted August 6, 2011 Share Posted August 6, 2011 http://www.cnbc.com/id/44039103 Cardboard Link to comment Share on other sites More sharing options...
moore_capital54 Posted August 6, 2011 Share Posted August 6, 2011 This is absolutely terrible news. I hope this doesn't mean more red... Link to comment Share on other sites More sharing options...
OracleofCarolina Posted August 6, 2011 Share Posted August 6, 2011 The dollar has been a flawed currency for years, S&P is just stating the obvious.. Link to comment Share on other sites More sharing options...
vinod1 Posted August 6, 2011 Share Posted August 6, 2011 S&P is predictably overcompensating for their earlier failures in all the securitization ratings. Vinod Link to comment Share on other sites More sharing options...
Packer16 Posted August 6, 2011 Share Posted August 6, 2011 This may finally wake up our folks in Washington and force them to make hard decisions (on both entitlements, wars and taxes). As Churchill has said "The US will do the right thing once every other alternative has been exhausted" Packer Link to comment Share on other sites More sharing options...
Myth465 Posted August 6, 2011 Share Posted August 6, 2011 This is nuts. I never really saw this happening. S&P has some major balls, I figured that the Gov would simple remove S&Ps role in rating gov paper. Link to comment Share on other sites More sharing options...
Smazz Posted August 6, 2011 Share Posted August 6, 2011 off the top of your heads, what does this really mean logistically? who will have to dump their US denominated whatevers because of the rating? Link to comment Share on other sites More sharing options...
moore_capital54 Posted August 6, 2011 Share Posted August 6, 2011 My fear is that BAC and other banks will have to make reserve adjustments as these are no longer "risk-less" securities. Link to comment Share on other sites More sharing options...
alertmeipp Posted August 6, 2011 Share Posted August 6, 2011 it depends.. as 2 out of the 3 rating agencies still rated it triple-A and with one notch down.. this maybe not big.. Link to comment Share on other sites More sharing options...
Liberty Posted August 6, 2011 Share Posted August 6, 2011 Uncharted territory, here we go. Not that the future is ever as certain as many think... Link to comment Share on other sites More sharing options...
txlaw Posted August 6, 2011 Share Posted August 6, 2011 Full text: http://www.zerohedge.com/news/sp-downgrades-us-aa-outlook-negative-full-text Likelihood of QE3 just went up quite a bit. Link to comment Share on other sites More sharing options...
berkshiremystery Posted August 6, 2011 Share Posted August 6, 2011 Uncharted territory, here we go. Not that the future is ever as certain as many think... Well, we had almost the same debt to GDP percentage around 1945, and the U.S. economy flourished decades later. As Buffett would say, long term the U.S. is an innovative country. The U.S. is the breeding ground of innovative, strong and profitable companies like the Google's, Apple's and Amazon's. Can you easy name their counterparts in Greece or Portugal. Don't worry, long term the U.S. will flourish, but we might see some 10-15 years with stalled growth, while public debt and the pompous way of the credit card spending lifestyle has to be reduced. some diagram from wikipedia,.... cheers! http://upload.wikimedia.org/wikipedia/commons/thumb/b/b8/US_Federal_Debt_as_Percent_of_GDP_by_President.jpg/800px-US_Federal_Debt_as_Percent_of_GDP_by_President.jpg source: http://en.wikipedia.org/wiki/United_States_public_debt Link to comment Share on other sites More sharing options...
turar Posted August 6, 2011 Share Posted August 6, 2011 I wonder if all the action of the past two days was due to expectation of this. Link to comment Share on other sites More sharing options...
NormR Posted August 6, 2011 Share Posted August 6, 2011 U.S. meet wall. Wall meet U.S. So, who gets screwed? Filthy-rich cigar-chomping bond holders or little old grandma? Bettin money says grandma wins the first few rounds ... Link to comment Share on other sites More sharing options...
Smazz Posted August 6, 2011 Share Posted August 6, 2011 My opinion is these rating agencies are a joke. Link to comment Share on other sites More sharing options...
goldfinger Posted August 6, 2011 Share Posted August 6, 2011 My opinion is these rating agencies are a joke. Buffett agrees with you: >:( http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn-sp-downgrade-doesnt-make-sense/ Link to comment Share on other sites More sharing options...
Myth465 Posted August 6, 2011 Share Posted August 6, 2011 I agree with the downgrade.... Triple A credits dont discuss willingly defaulting on their debts. Congress is off its rocker (blame the Tea Party perhaps). S&P has probably overreached and their may be blood (probably for S&P inmo), but Congress and the American public need a wake up call and this is a pretty good way to give one. Link to comment Share on other sites More sharing options...
Parsad Posted August 6, 2011 Share Posted August 6, 2011 I agree with the downgrade.... Triple A credits dont discuss willingly defaulting on their debts. Congress is off its rocker (blame the Tea Party perhaps). S&P has probably overreached and their may be blood (probably for S&P inmo), but Congress and the American public need a wake up call and this is a pretty good way to give one. I agree too...S&P is actually doing their job for once. But I also agree with Buffett that this is almost meaningless in the grand scape of things. Credit rating agencies work in hindsight and provide no indication whatsoever what will happen in the future. Shouldn't the U.S. have been downgraded before the whole debt ceiling debate? Same political parties...same debt load...same GDP...same tax revenues. Fairfax is still rated A- for Pete's sake! The U.S. now has the same rating as Canada and France...big deal! The market may react, or they may not...do we really care? If they go down, we buy some more. The main thing is as many have said, politicans need to start working on the problems, and that means creating the right incentives, proper stimulii, equitable opportunity and confidence. Cheers! Link to comment Share on other sites More sharing options...
ERICOPOLY Posted August 6, 2011 Share Posted August 6, 2011 The U.S. now has the same rating as Canada OMG! I didn't realize it was that bad! :D Link to comment Share on other sites More sharing options...
Parsad Posted August 6, 2011 Share Posted August 6, 2011 OMG! I didn't realize it was that bad! A little payback for American hockey teams winning the Stanley Cup for the last 17 years! ;D Incidentally, on the subject of the United States and Canada, and similiar credit ratings: Canada had to balance their budget and pay down their debt through the nineties and early part of the new millenium...we didn't suffer, univeral healthcare survived, old age security and Canada pension plan checks were paid, teachers didn't commit hari-kari due to increased class sizes, and the world didn't come to an end. Our economy is far better off for it, as are the generations to come. One aspect of what helped Canada get through that period was the influx of wealthy, entrepreneurial immigrants from Hong Kong and Taiwan. With all the worry and discomfort in other parts of the world, especially Europe and Japan, the U.S. may have to consider opening up the flood gates to immigration. In particular, immigrants of the business-class type visas that would invest capital and start small businesses. They would need homes, automobiles, food, clothing, education, etc, and increase tax revenues. Maybe even open up such visas to regions that have greatly suffered economic hardships such as Nevada, Arizona, Florida, Southern California, Michigan, etc. Food for thought. Cheers! Link to comment Share on other sites More sharing options...
Kraven Posted August 6, 2011 Share Posted August 6, 2011 it depends.. as 2 out of the 3 rating agencies still rated it triple-A and with one notch down.. this maybe not big.. In the corporate world, when there is a split rating typically one would look to the lower rating. Unless the lower rating is from Fitch in which case you can just go with the higher one from S&P and/or Moody's. But as this is uncharted waters, who knows. I suspect that people will fudge it somehow. I do wonder what will happen to those who are required to hold AAA debt. Hopefully their governing instruments were drafted properly and say something to the effect of "AAA debt AND the debt of the US". Link to comment Share on other sites More sharing options...
onyx1 Posted August 6, 2011 Share Posted August 6, 2011 Unlike Moodys, S&P's rating criteria has always been based on the probability of the first $1 of default. How can the US ever default unless the government runs of out of paper for the printing press? Can't happen. I don't understand how S&P can downgrade and maintain internal consistency with their rating process. Now, if S&P were to offer ratings based on the dollars ability to maintain purchasing power, that would make more sense; but on that score the US is a junk credit. Link to comment Share on other sites More sharing options...
Cardboard Posted August 6, 2011 Author Share Posted August 6, 2011 Sanjeev, Canada is AAA rated according to S&P website. Cardboard Link to comment Share on other sites More sharing options...
Uccmal Posted August 6, 2011 Share Posted August 6, 2011 This is totally perverse. Totally. If the US has had its rating lowered then you have to lower everyone elses ratings in tandem. Canada is totally reliant on the good credit of the US, as is China, the UK, Germany etc. Ludicrous and meaningless bullshit. A good wake up call none-the-less. Link to comment Share on other sites More sharing options...
DCG Posted August 6, 2011 Share Posted August 6, 2011 How is this going to effect whether people buy Coke, iPhones and coffee, eat at restaurants, advertise on Google, etc? Link to comment Share on other sites More sharing options...
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