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US Treasuries Show Lower Yields Than Before S&P Downgrade

By Big Tent Democrat, Section Economy
Posted on Mon Aug 08, 2011 at 09:52:06 AM EST
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Unless someone misread the S&P downgrade and it downgraded the global equities market, much egg on the face of the clowns at S&P, as the yield on benchmark 10-year US Treasury is now lower than prior to Standard & Poor's downgrade.

S&P spoke, and nobody cared. This should be the end of S&P's sovereign debt ratings. When no one pays attention to you, what's the point?

Open Thread.

< Sunday Night TV and Open Thread | The S&P Effect: Market Fears S&P Push To Double Down On Bad Economic Policy >

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    US Treasuries Show Lower Yields Than Before S&P Downgrade | 92 comments (92 topical)

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    S&P downgrades Fannie & Freddie... (5.00 / 1) (#4)
    by Anne on Mon Aug 08, 2011 at 10:11:44 AM EST
    what's next?

    Probably shouldn't ask that question.

    Fannie and Freddie are (5.00 / 1) (#14)
    by Big Tent Democrat on Mon Aug 08, 2011 at 10:29:03 AM EST
    US government backed debt.

    Obviously it would be downgraded as well.

    Parent

    Exactly (none / 0) (#27)
    by jimakaPPJ on Mon Aug 08, 2011 at 10:46:29 AM EST
    ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

    Link

    Parent

    Stock certificates (none / 0) (#6)
    by Militarytracy on Mon Aug 08, 2011 at 10:15:16 AM EST
    Corporate downgrades

    Parent
    Oh, no...it is government that is evil, not (5.00 / 2) (#40)
    by Anne on Mon Aug 08, 2011 at 11:04:26 AM EST
    the corporate world; coporations make people money - governments just spend it on poor people and sick people and old people who contribute nothing and are a drain on the system...

    Frank Pasquale has a post up at Balkinization that is worth reading.

    Here are the highlights:

    1) Cutting America's Poor Down to Size

    As the fortunes at the top of society become astronomical, the most vigorous agitators for wealth-defense have seized on new strategies for justifying the fate of the economy's "losers." The extreme poverty prevalent in the less developed world can provoke at least two reactions. Some ask: how can we develop new technology and redistribute resources to reduce the suffering of the world's poorest? Others say: why can't America's poor live as cheaply as, say, the favela-dwellers in Brazil, or the Phillipines' poor?

    That appears to be the approach of the Heritage Foundation, which thinks poverty is grossly exaggerated in the US.

    [snip]

    2) The Economic Construction of the Zero Marginal Product Worker

    What about the unemployed, now out of work on average for nearly 41 weeks? Don't get hysterical over hysteresis, conservative thought leaders concur. Many of these people are "zero marginal product workers," who literally have nothing to add to the economy. Like a portable CD player in a world of iPods, they are obsolete.

    [snip]

    3) The Promise of Prison Labor

    Chalk up another concern for America's worried wealthy: how can their profit margins match those of compatriots in countries like Mexico or China, where labor is much cheaper? One solution is to employ people whose health care is provided by the state, and who are guaranteed to show up on time for wages less than an dollar an hour: prisoners. The strategy is closer than you may think.

    [snip]

    4) The Reputation-Ruining Industry

    A zero-sum economy like ours teems with the parasitic players of "gotcha capitalism." Hidden late fees, penalties, and charges are common. Credit bureaus are happy to make many them a near-permanent "black mark" on your record if you're foolish enough to ignore or dispute them. Now a new entrepreneurial venture is going after arrestees, trying to assure that their mugshots are near the top of Google results for their name, unless they pay a fee to have them removed. Multiply that by at least the number of embarrassments you can think of offhand, and you have a thriving new industry for the US! And one more source of "disposable people"---a class marked off as not deserving employment, and perhaps eventually many other benefits of modern life.

    In my opinion, the downgrades of US debt are being made for one reason, and one reason only: the eventual gutting and dismantling of the safety net programs.


    Parent

    After gutting the safety net programs, (none / 0) (#12)
    by MO Blue on Mon Aug 08, 2011 at 10:26:53 AM EST
    lowering corporate and marginal taxes for the uber-rich and expanding rather than reducing the defense budget, the U.S. will be just fine. So saith Obama and the Masters of the Universe.

    BTW, Paul Ryan now willing to accept some minimal so called revenue increases if we gut safety net programs and lower taxes.

    WALLACE: If you were on that committee, and you get a deal -- let's say $3 or $4 dollars in spending cuts and entitlement cuts for every $1 in revenue increases, and the revenue increases came from tax reform [...] -- would you be open minded to including some of that revenue as part of a debt deal?

    RYAN: It all depends on the spending side of the ledger. ... If we're convincingly restructuring these entitlement programs and getting that spending line down to meet that revenue line, then can you have higher revenue growth through more economic growth and tax reform? Yes, the answer is yes. link

    Some token "revenue enhancements," not actual tax increases will be contained in the deal, in exchange for slashing the safety net programs. Obama will get the "Grand Bargain" that he "negotiated with Boehner and we will get screwed. He will be so proud when he signs our lives away with the flick of his pen.  

    Parent

    Yes, that is the "balance" (5.00 / 1) (#21)
    by KeysDan on Mon Aug 08, 2011 at 10:40:21 AM EST
    Obama is also striving for:  Close loopholes (say on oil companies or private jets) in exchange for cutting social programs.  The corporations and the rich take a dollar hit and the middle class and poor, in turn,  take a four dollar hit.  Sounds good to me, although I do hope these great thinkers read news coming from places like Tottenham.

    Parent
    Let's order S&P a pizza, and when the delivery (5.00 / 1) (#49)
    by steviez314 on Mon Aug 08, 2011 at 11:23:04 AM EST
    guy brings it, he should give them a bill for $2,000,000,000,012.95

    A good question (5.00 / 3) (#50)
    by glanton on Mon Aug 08, 2011 at 11:27:15 AM EST
    "When no one pays attention to you, what's the point?"

    Sadly we are long arrived at the place where this question applies to liberals in America, much moreso than for-profit crediting agencies.

    Touche (nm) (none / 0) (#64)
    by PatHat on Mon Aug 08, 2011 at 01:21:30 PM EST


    Parent
    Agreed. So, what IS the point? (none / 0) (#65)
    by Dr Molly on Mon Aug 08, 2011 at 01:35:09 PM EST
    An existential question, I realize.

    Parent
    Yeah (none / 0) (#70)
    by glanton on Mon Aug 08, 2011 at 02:12:03 PM EST
    I really do not know the point, but I guess I don't believe it is totally pointless.  But it's about as close as we can get, I'd say.  

    I guess one must admit, if one continues to speak,  that one holds a certain amount of hope that eventually there can be meaningful resistance to corporate oligarchy.  

    Parent

    Obama does not... (5.00 / 1) (#63)
    by Dadler on Mon Aug 08, 2011 at 01:03:44 PM EST
    ...have the ability to call his opposition full of sh*t when they obviously are.  Whether that means he agrees with them or not, the result is the same.  Their position is cemented as the starting point for "negotiations" on every front.

    This is a profoundly incompetent president.  He lacks the essential skills of an effective leader.  A fine politician.  A leader?  The polar opposite.

    Walks away without taking a question.  Worse than weak, it's politically impotent.  

    "Incompetent" is far too benign a word (5.00 / 2) (#69)
    by Anne on Mon Aug 08, 2011 at 02:10:46 PM EST
    to describe this president, I think; he has plenty of skills, but is choosing to use them in a way that hurts way more people than it has helped - or will help going forward.

    This cannot possibly be the best we can do; it just can't.

    I'm just sick about what's coming; it's going to be really, really bad.

    Parent

    I just think he's a mess (none / 0) (#71)
    by Dadler on Mon Aug 08, 2011 at 02:40:31 PM EST
    In every way.  That's my dimestore read, take it for what it's worth.  He seemed full of fear in that address, just a gaunt and grasping-at strawman.  Like I said, though, whether he agrees with the right and wants the same things or not, it doesn't matter, the result is the the same thing.

    Parent
    Should bet the end of ratings agencies, period (none / 0) (#1)
    by Dadler on Mon Aug 08, 2011 at 09:59:32 AM EST
    They have proven to be more corrupt than useful.

    And I'm linking one last time to a piece of short fiction I wrote recently, IF I MAKE IT TO ELEVEN (link), part of a larger work, blah blah blah, difficult material, yap yap yap, any reactions are appreciated.

    Off to take sonny boy to science camp, which he's doing all week, then into the city for some business.  

    Have a good one, peeps.

    Lets abolish... (5.00 / 2) (#20)
    by kdog on Mon Aug 08, 2011 at 10:39:40 AM EST
    credit reporting agencies for individuals as well, who can run even more shady than Standards-R-Poor.

    Go back to personal references, where the reference actually knows the person/entity asking for a loan.

    Parent

    60% (none / 0) (#2)
    by Abdul Abulbul Amir on Mon Aug 08, 2011 at 10:00:19 AM EST
    .

    S&P gave 60% of its political donations to Dems. Perhaps there is a lack of judgement at that outfit.

    .

    I gotta agree (5.00 / 1) (#17)
    by Yman on Mon Aug 08, 2011 at 10:38:03 AM EST
    S&P gave 60% of its political donations to Dems. Perhaps there is a lack of judgement at that outfit.

    Could be a "lack of judgment".  Giving 40% to Bush and his ilk after they drove us off an economic cliff does seem pretty foolish.

    Parent

    Stanford Economist John Taylor Defends S&P (none / 0) (#3)
    by Dan the Man on Mon Aug 08, 2011 at 10:08:08 AM EST
    Stanford Economist John Taylor Defends S&P

    Link

    "The White House and the Treasury are accusing Standard and Poor's of making an elementary arithmetic mistake in the recent downgrade decision. "

    "But if you examine the details of the S&P--Treasury--White House dispute, rather than a "math error" you will find what is better described as a "difference of opinion" about a forecast for future government spending.  In other words, the issue is about the appropriate "baseline" for government spending in the absence of more actions. Since when did different views or assumptions about the future become a math error?"

    "There are of course reasons to dispute the downgrade decision of S&P, but a math error is not one of them. It would be more productive for government officials to move on and to use their time to find ways to reform taxes or entitlements, fix the exploding debt problem, and thereby prevent the likelihood of the outcome in this chart, which shows CBO forecasts (during the past three years) under their alternative fiscal scenario"

    This is all Geithner's fault (5.00 / 1) (#5)
    by Militarytracy on Mon Aug 08, 2011 at 10:14:23 AM EST
    He thought he was going to read S&P the riot act instead of listening to them, hearing them out, and responding in a working manner to their issues with us.  He thought he would force them to sign onto his own special reality like he always does with us (the unwashed) and they told him NO.  Because Geithner does inflate the figures of how well the United States is going to be doing.  He has done that for years now, there was no Summer of Recovery and there were no green shoots.

    Parent
    the S&P "reality" (5.00 / 2) (#8)
    by Big Tent Democrat on Mon Aug 08, 2011 at 10:16:12 AM EST
    is nonsense.

    I am second to none in my disdain for Geithner, but S&P is the problem here, not Geithner.

    Parent

    Completely disagree (none / 0) (#11)
    by Militarytracy on Mon Aug 08, 2011 at 10:18:26 AM EST


    Parent
    You will be pleased to know that your (none / 0) (#15)
    by MO Blue on Mon Aug 08, 2011 at 10:35:20 AM EST
    good friend, Tim Geithner, just announced that he is willing to stay on board as Treasury Secretary. ;-(

    "Secretary Geithner has let the president know that he plans to stay on in his position at Treasury," Jenni R. LeCompte, a Treasury spokeswoman, said in a written statement. "He looks forward to the important work ahead on the challenges facing our great country."
    ...
    Jay Carney, the White House spokesman, said in a statement on Sunday, "The president asked Secretary Geithner to stay on at Treasury and welcomes his decision." link

    I don't wonder that Obama welcomes his decision to stay. Geithner is a useful target and scapegoat for Obama.  

    Parent

    He's like herpes (none / 0) (#30)
    by Militarytracy on Mon Aug 08, 2011 at 10:48:05 AM EST


    Parent
    The problem is called Republican (none / 0) (#79)
    by Madeline on Mon Aug 08, 2011 at 07:49:25 PM EST
    and weak Democrats, including the President.

    You can reread history back to the American Revolution and find many statements and arguments between partisan camps that were false and dishonorable in re political battles. However I don't believe you will find a death knell on the country like last weeks ultimatums from Tea party absolutes.

    The reality is credit rating agencies reacted.

    Parent

    If they would have allowed (5.00 / 1) (#9)
    by Militarytracy on Mon Aug 08, 2011 at 10:17:17 AM EST
    the Bush tax cuts to expire, this would have NEVER happened with the S&P.

    Parent
    So you're (none / 0) (#16)
    by Warren Terrer on Mon Aug 08, 2011 at 10:37:07 AM EST
    a deficit hawk now? When did that happen?

    Parent
    Nope, I know you like to call it that (none / 0) (#22)
    by Militarytracy on Mon Aug 08, 2011 at 10:42:01 AM EST
    But repeal the Bush Tax Cuts NOW!  Save us from further downgrade.  It is the only immediate thing that can be done that leads to the least contraction, and a funny thing happens when rich people have to pay taxes.  They decide they need to make some more money, so they take some of the money they have remaining and they do innovative things with it that starts new businesses and creates jobs and makes them some more money.  The rich don't do anything good for their communities either when they aren't hungry too.....just like the rest of us....they need to have incentive :)  Not confidence :)

    Parent
    This is deficit hawkery (none / 0) (#25)
    by Warren Terrer on Mon Aug 08, 2011 at 10:44:59 AM EST
    whether you like it or not.

    Parent
    It is in your book (none / 0) (#28)
    by Militarytracy on Mon Aug 08, 2011 at 10:47:00 AM EST
    Everybody is running a different set of books these days.

    Parent
    If just taxing the rich would do it (none / 0) (#33)
    by jimakaPPJ on Mon Aug 08, 2011 at 10:49:10 AM EST
    that would be fine with me.

    But it won't. Watch for increases all the way down and a national sales tax to boot.

    Parent

    It won't fix everything immediately (5.00 / 1) (#41)
    by Militarytracy on Mon Aug 08, 2011 at 11:06:40 AM EST
    but at this point nothing can Jim. It puts us and our economy back on track though and changes where the figures with stand enormously in 2021....

    It is also true damn it, the rich have NO incentive to do anything generating future prosperity.  When the rich don't pay the necessary taxes they stop producing and they become extremely dysfunctional and a burden on society.  It happens over and over and over again.  They stay that way too until we knock their front door down and cut off their heads.  Wouldn't it be nice if we could skip that part?

    Parent

    actually, (none / 0) (#75)
    by cpinva on Mon Aug 08, 2011 at 05:44:38 PM EST
    according to the CBO, that's exactly what would do it. merely reverting back to the marginal tax rates of 2001 would eliminate the deficit in pretty short order, and provide enough extra to pay down some of the debt.

    don't take my word for it, check their website. i would link to it, but for some reason i have never been able to accomplish the simple act of putting a hyperlink in a post on this site.

    Parent

    Here ya go (none / 0) (#76)
    by Yman on Mon Aug 08, 2011 at 06:40:37 PM EST
    CBO Report

    However, the CBO also says the deficit could be fixed almost completely simply by allowing the Bush tax cuts to expire as scheduled in 2012 and broadening the alternative minimum tax.

    Newser summary.

    Parent

    Not exactly (none / 0) (#81)
    by jimakaPPJ on Mon Aug 08, 2011 at 08:17:38 PM EST
    However, the CBO also says the deficit could be fixed almost completely simply by allowing the Bush tax cuts to expire as scheduled in 2012 and broadening the alternative minimum tax. The problem, warns the CBO, is that cutting spending or raising taxes now "would probably slow the economic expansion."

    That's also known as a tax increase on the middle class... and if growth slows... so does tax collection.

    Parent

    "Not exactly ... (none / 0) (#84)
    by Yman on Mon Aug 08, 2011 at 09:29:58 PM EST
    ... what, Jim?  I was giving cpinva a link to the CBO report.  

    BTW - My quote includes the reference to the AMT - so great job deciphering that, Sherlock.

    Parent

    It appears to me (none / 0) (#88)
    by jimakaPPJ on Tue Aug 09, 2011 at 10:05:24 AM EST
    that you were agreeing with cpinva.

    You certainly didn't note in differences of opinion and you did not include the last sentence re growth.

    So yes, Sherlock did good.

    Parent

    It "appears" to YOU - heh (none / 0) (#89)
    by Yman on Tue Aug 09, 2011 at 10:17:26 AM EST
    Well there ya go.

    GIGO

    BTW - Take a look at the actual CBO report.  I know it's a lot of big, fancy words, but repealing the Bush tax cuts by itself would almost take care of the budget deficit.

    Parent

    ALMOST??? (none / 0) (#90)
    by jimakaPPJ on Tue Aug 09, 2011 at 07:28:00 PM EST
    Even with economy slowed?

    What qualifiers you love.

    Parent

    Yes, Jim (none / 0) (#91)
    by Yman on Tue Aug 09, 2011 at 08:05:37 PM EST
    It could almost, by itself, resolve the deficit, as in "very nearly", or "all but".

    Glad to help.  We'll work on more difficult words, tomorrow.

    Parent

    Try this one (none / 0) (#92)
    by jimakaPPJ on Tue Aug 09, 2011 at 09:44:15 PM EST
    "crutch"

    As in a device that let's one claim something that is not true.

    And I note you didn't deny what the Alternative Minimum Tax loss would do to the middle class.

    Parent

    Good one! (none / 0) (#93)
    by Yman on Tue Aug 09, 2011 at 10:05:24 PM EST
    Maybe you should stop using crutches.

    BTW - Why should I bother to deny something for which you provide no details or evidence?  You don't even know what income levels the CBO is discussing when they formulated the Extended Baseline Scenario.

    Parent

    Strange comment (5.00 / 1) (#7)
    by Big Tent Democrat on Mon Aug 08, 2011 at 10:15:22 AM EST
    given S&P acknowledged the error.

    Parent
    They acknowledged more than (none / 0) (#10)
    by Militarytracy on Mon Aug 08, 2011 at 10:17:53 AM EST
    just that, come on....you can read too.

    Parent
    What S&P is saying (5.00 / 1) (#19)
    by MO Blue on Mon Aug 08, 2011 at 10:39:10 AM EST
    The head of the Standard & Poor's team that downgraded the U.S. credit rating says entitlement reform would go a long way to restoring the country's status. "Entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," said David Beers, global head of sovereign and international public finance ratings at S&P, on Fox News Sunday. TL sidebar


    Parent
    Yep. I said yesterday (5.00 / 1) (#35)
    by Towanda on Mon Aug 08, 2011 at 10:52:20 AM EST
    here that this was the real grand bargain, because the financial set wants Obama to do "reform" of "entitlements."

    We are so screwed.  But, of course, the federal government defaulting on promised premiums for our payments for insurance doesn't bother the Wall Streeters -- or Obama -- a bit, not one bit.

    Parent

    But it should because it will (none / 0) (#37)
    by Militarytracy on Mon Aug 08, 2011 at 10:54:24 AM EST
    lead to more contraction and even worse revenues.

    Parent
    Not sold on that (5.00 / 1) (#47)
    by Towanda on Mon Aug 08, 2011 at 11:16:38 AM EST
    as they make money selling or buying -- and doing so with other people's money.  Their own is secure somewhere; bet on it.

    Parent
    They are looking for immediate (none / 0) (#24)
    by Militarytracy on Mon Aug 08, 2011 at 10:44:43 AM EST
    ways to improve the figures because things are SO bad right now.  And they are, our spreadsheet is a fricken horror. There are other ways to do that too though, and one would be to repeal the Bush Tax Cuts now and watch rich people have to work for a living again too....and that's when they create jobs.  If we took in revenue that would make our numbers instantly better, but the S&P said they didn't foresee how the Bush tax cuts would be lifted in the current climate.

    Parent
    They SAID more than that (none / 0) (#13)
    by Big Tent Democrat on Mon Aug 08, 2011 at 10:27:50 AM EST
    But with regard to the error, Taylor is defending someone who admits they made an error.

    Parent
    Is a net general government debt hitting 85% (none / 0) (#18)
    by Militarytracy on Mon Aug 08, 2011 at 10:38:26 AM EST
    of your gross domestic product in 2021 worthy of a AAA rating?  S&P says it is not...even though they were figuring that at 93% of our gross domestic product in 2021 with the error being used.  When they fixed the error in the figures they instead calculated that net general government debt would be 85% of our GDP in 2021 and that still gets you a DOWNGRADE in the real world.

    Parent
    You forgot Poland. I mean, France. (5.00 / 1) (#39)
    by Addison on Mon Aug 08, 2011 at 11:02:57 AM EST
    When they fixed the error in the figures they instead calculated that net general government debt would be 85% of our GDP in 2021 and that still gets you a DOWNGRADE in the real world.

    Oh does it? France is already at 84.7% debt-to-GDP. And they are still AAA according to S&P.

    While France's debt of 84.7 percent of gross domestic product is less than Italy's 120.3 percent, as a percentage of economic output it has risen twice as fast as Italy's since 2007. French government debt totaled 1.59 trillion euros ($2.3 trillion) at the end of 2010, according to the European Union; Italy's was about 1.8 trillion euros. France has had a larger budget deficit than Italy every year since 2006. S&P rates Italy A+, four levels below France.

    France's rating at Standard & Poor's is in a "stable perspective," Jean-Michel Six, the firm's chief economist for Europe, said in an interview with France Info radio yesterday.

    (Bloomberg)

    Odd.

    Parent

    Their ability to recover (none / 0) (#44)
    by Militarytracy on Mon Aug 08, 2011 at 11:12:10 AM EST
    is better than ours though.  Our households are broke, theirs are not.  Our people are broken, theirs are not.  Our government is broken, theirs still cares about the people who are the engine of their economies and they still have a chance to experience vitality.  Our economy has been zombified, their long term numbers aren't saying that....at least not yet.

    Parent
    Whose long term numbers? (5.00 / 1) (#46)
    by Big Tent Democrat on Mon Aug 08, 2011 at 11:16:06 AM EST
    France? You're wrong.

    The economic outlook for France is no better than the US. Indeed it is worse because of its lack of its own currency.

    S&P is full of crap.

    Parent

    I thought that both France and Britain (none / 0) (#52)
    by Militarytracy on Mon Aug 08, 2011 at 11:51:32 AM EST
    are both under scrutiny by the rating agencies right now. If the figures don't make it, they should brace themselves to join us in being downgraded.  I still don't think S&P is full of $hit.  I think they paid a price for their lack of integrity and credibility in the recent past and they want their integrity and credibility back.  They don't want to be a part of the bought off Goldman Sachs network from the world of too good to be true and I welcome that.  I think that is the only way anything ever gets better for regular people.

    Parent
    I can't believe (none / 0) (#45)
    by Militarytracy on Mon Aug 08, 2011 at 11:14:10 AM EST
    any of this surprises you.  Our current administration insists treating our unemployment as "structural" and then when that policy produces long term figures that show your economy is zombified...you're shocked?

    Parent
    Both S&P and the administration can be wrong (5.00 / 2) (#48)
    by Addison on Mon Aug 08, 2011 at 11:19:41 AM EST
    S&P is wrong about credit risk, the Obama administration is wrong about creating economic growth or spurring employment. I don't see what's so hard about that concept, and I don't understand why in order to take shots at the administration you find it necessary to defend S&P's sovereign credit ratings. As if it's some sort of binary system wherein if S&P is wrong that means the Obama administration is right. A defense of S&P's flop debut as a PAC is entirely unnecessary for your aims of critiquing the administration, and post by post you're undermining your credibility.

    Parent
    I'm undermining my credibility (none / 0) (#53)
    by Militarytracy on Mon Aug 08, 2011 at 11:58:37 AM EST
    with you because I see this issue from the center of the facets.  I don't care about my credibility with you.  It is about balance and people.  You can't win any kind of long term functioning vital economy for yourself based on any given set of economic dogmatic driveling talking points.  Sorry I won't adopt a dysfunctional dogma that you can spend all day navel gazing at while the suffering continues and rich rape on.  I care about people, the little people, that is who this country is. I'm tired of them getting incrementally phucked over into oblivion one dogmatic economic arguing point at a time.  Things must happen that end this greed is good enriching only the rich insanity that is killing all of us who isn't part of the richey rich club.

    You aren't going to see me crying in any corner because real bookkeeping is returning to the market place.

    Parent

    Huh? (5.00 / 3) (#58)
    by Addison on Mon Aug 08, 2011 at 12:35:50 PM EST
    Sorry I won't adopt a dysfunctional dogma that you can spend all day navel gazing at while the suffering continues and rich rape on.  I care about people, the little people, that is who this country is.

    I have provided facts to address your points, not dogma. Facts about French debt, facts about S&P's track record, facts about the market's dismissal, etc. What is my "dogma", here:

    S&P has a long history of being wrong on sovereign debt, just look at Nate Silver's article linked elsewhere in this thread. S&P is not credible on sovereign credit risk, which is what they were purportedly rating.

    S&P has a subjective political metric for judging sovereign credit risk that is not internally consistent and that the market (which knows more) roundly rejects. There are AAA-ratings sovereign debts that are less safe or liquid than the United States' debt. But for some reason they didn't get a downgrade. The downgrade was (a) political (b) to the extent it was at all analytical the downgrade was relative to America's past performance, not to any other sovereign debt, and so the rating is meaningless.

    S&P's report, if followed, will lead to greater austerity and great suffering for the poor and the elderly. Sure, tax revenues would be somewhat greater, but entitlements would still be reformed. I think your trust in S&P as a truth-telling champion for the common man is as absurd a thing as I have ever heard on this blog.

    Parent

    And the S&P downgrade is (5.00 / 1) (#67)
    by gyrfalcon on Mon Aug 08, 2011 at 01:45:13 PM EST
    in aid of what you care about exactly how??

    Parent
    Japan (none / 0) (#23)
    by Warren Terrer on Mon Aug 08, 2011 at 10:42:17 AM EST
    has a debt to GDP ratio of about %200. S&P has downgraded it repeatedly. And yet its long debt currently trades at about 2% and it has never defaulted on a payment. Chill.

    Parent
    And they have such a terrific (none / 0) (#26)
    by Militarytracy on Mon Aug 08, 2011 at 10:46:18 AM EST
    zombie economy...they are exactly what I aspire to...chill indeed.

    Parent
    Their economy (5.00 / 1) (#29)
    by Warren Terrer on Mon Aug 08, 2011 at 10:47:27 AM EST
    is currently doing better than the US economy. But way to change the goal posts. The point is they haven't defaulted on their debt. And they never will. Frankly, you are being hysterical.

    Parent
    They are so broke and broken they can't (1.00 / 2) (#54)
    by Militarytracy on Mon Aug 08, 2011 at 11:59:33 AM EST
    even address a radiation disaster properly.

    Parent
    Goal posts? (none / 0) (#32)
    by Militarytracy on Mon Aug 08, 2011 at 10:49:04 AM EST
    What are your goals?  I know what mine are.

    Parent
    Not the point (none / 0) (#31)
    by Big Tent Democrat on Mon Aug 08, 2011 at 10:48:10 AM EST
    S&P made an error.

    If S&P thinks that 85% is the magic number, then they should say so. Why don't they you think?

    Parent

    I think this is all politics (5.00 / 1) (#34)
    by jimakaPPJ on Mon Aug 08, 2011 at 10:51:22 AM EST
    I just can't figure out who the bad guys are.

    Parent
    Obama deserves this (none / 0) (#38)
    by Warren Terrer on Mon Aug 08, 2011 at 10:57:16 AM EST
    He could have and should have shut these agencies down at the start of his presidency when it was well established that they had corruptly given AAA ratings to garbage mortgage backed securities.

    It's pretty funny watching him complain about their methods now that he's the victim when he didn't give a d*mn about their crimes before. Screw him.

    Parent

    Start from the premise that there (none / 0) (#56)
    by MO Blue on Mon Aug 08, 2011 at 12:24:32 PM EST
    are no "good guys" in D.C., Wall St. (include S&P), corporate owned media and the Masters of the Universe and you will IMO be close to the truth.

    There is complete agreement between both parties and Wall St. to seriously cut the safety net programs. Corporate media is selling this premise full time.

    Parent

    yup (none / 0) (#57)
    by nycstray on Mon Aug 08, 2011 at 12:29:38 PM EST
    no "good guys"

    unless they prove otherwise . . .

    Parent

    I guess. (none / 0) (#80)
    by Madeline on Mon Aug 08, 2011 at 08:03:29 PM EST
    Moody's defended S@P in that it is their job to see if the government is capable of controlling their debt. Moody's said they are watching too.

    So how do you rate if you do not give an opinion on the function of the government and it's ability to meet the goals?

    Parent

    who the bad guys are? that's easy... (none / 0) (#85)
    by Mr Natural on Mon Aug 08, 2011 at 10:24:57 PM EST
    ... the politicians.

    Parent
    Bookkeeping is a reality (none / 0) (#36)
    by Militarytracy on Mon Aug 08, 2011 at 10:53:41 AM EST
    Being able to cypher is important :)  Nice try though

    Parent
    MT, have a look (none / 0) (#51)
    by gyrfalcon on Mon Aug 08, 2011 at 11:35:51 AM EST
    at Nate Silver's analysis of S&P's record on sovereign debt.

    Parent
    I don't think you can look at their past (none / 0) (#55)
    by Militarytracy on Mon Aug 08, 2011 at 12:02:38 PM EST
    record on this.  They want to be someone with credibility again.  Everyone knows for at least the past ten years they have been completely full of Goldman Sachs $hit. Is it worth me wasting my time, looking at the sniveling?  Is it just more sniveling?  Our markets haven't been based on economic fundamentals for at least a decade, and it is destroying the regular people out there trying to survive this crap.

    Parent
    Not like you to (none / 0) (#66)
    by gyrfalcon on Mon Aug 08, 2011 at 01:39:29 PM EST
    put your fingers in your ears and yell "La, la, la, la!" when there's something you'd rather not hear about.

    Sniveling?  Really?

    Silver's analysis has nothing to do with Goldman or crappy CDSs and bundles of mortages.

    Parent

    This isn't to be construed (none / 0) (#68)
    by CoralGables on Mon Aug 08, 2011 at 02:04:52 PM EST
    as taking a stand for or against the legitimacy of what he says, but I am actually quite disappointed with Nate's analysis. I've followed him since his baseball days and he is at his best when he delves into the statistical minutia on a topic. This is more of a "throw together a piece I'm on deadline" performance more reminiscent of talking heads. By old time Nate standards it is seriously lacking in detail. I'd rate it 3 1/2 cotton balls on the fluff scale.

    Parent
    If it was done quickly but accurately (none / 0) (#73)
    by gyrfalcon on Mon Aug 08, 2011 at 03:47:12 PM EST
    I don't get the problem.  If he spent six months noodling over his data, there'd be no point but a lot of historical hmmmmm-ing by the time he put it out there.

    I'd be interested, for sure, in hearing any sensible critiques of his data and the conclusions he draws from it, though, since I'm certainly no statistician.  Got any?

    Parent

    Don't blame the messenger! (none / 0) (#42)
    by Gerald USN Ret on Mon Aug 08, 2011 at 11:09:04 AM EST
    S&P did a yeoman job.

    They finally called the King (US) on his clothes.

    Yes you can say they didn't do their job (all 3 of the big rating agencies) on Housing, and on the other debacles we have had, but now S&P are "BREAKING THE LINE"  and starting to be more truthful.

    It is the others that have their heads in the sand that are remiss.  S&P's action will put pressure on the others now to face the facts.

    If Greenspan and company, the banks, the housing people, etc. had been called charlatans a long time ago we would all be in a much better place, say like Canada who did not trash their regulation.  Mind you I am not saying Canada does everything right, but in this financial area they are heads above the US and the EU.

    The message (5.00 / 3) (#43)
    by Big Tent Democrat on Mon Aug 08, 2011 at 11:10:20 AM EST
    was rejected by the markets.

    Parent
    Political commentators vs. Sports commentators (none / 0) (#59)
    by Dadler on Mon Aug 08, 2011 at 12:38:28 PM EST
    Can you imagine if MLB analysts, for instance, got as much wrong analyzing their game as DC talking heads get wrong yapping about theirs?  Calling a bunt a line drive, a popout a homer, a hanging curve a fastball, sheesh, they'd be fired by the second game.  But most viewers, unfortunately, know much less about the political game than they know about their favorite sport.  

    News Alert!! (none / 0) (#60)
    by caseyOR on Mon Aug 08, 2011 at 12:53:02 PM EST
    Obama will speak to the nation any minute now about the credit downgrade, per NBC News.

    yes, he's pontificating now . . . (none / 0) (#61)
    by nycstray on Mon Aug 08, 2011 at 12:55:41 PM EST


    Parent
    Starts like a deficit hawk on roids (none / 0) (#62)
    by Dadler on Mon Aug 08, 2011 at 12:57:16 PM EST
    Accepts that S&P is a credible player deserving of respect.

    Idiot.

    This is already an awful speech lacking EVERYTHING necessary to get the country going.  Oh wait, now he's asking the rich to pay their "fair share" in exhange for modifications to entitlements.

    Idiot squared.

    This was his last chance with me.  He has already failed to the nth degree.

    Again knockes lines in the sand, as if their isn't a proper one demarcating logic from insanity.  

    Idiot cubed.

    Goodbye now.

    If he accepts (5.00 / 1) (#72)
    by Warren Terrer on Mon Aug 08, 2011 at 02:52:47 PM EST
    S&P as a credible player then he deserves this downgrade. What a chump.

    Parent
    London is burning. (none / 0) (#74)
    by caseyOR on Mon Aug 08, 2011 at 05:19:53 PM EST
    While we fiddle with our economy here in the USA, London is literally burning. This is the third day and night of rioting, looting and arson in an expanding number of London neighborhoods.

    From what I have read, the precipitating event was the police killing of  a man. Things have gone far beyond anger over a police action, though. People are angry about the austerity measures enacted by Cameron and Parliament. They are furious about the cuts to such basics as the National health Service, as well as the end of government student aid. The unemployment rate is adding fuel to these fires.

    How long before rioting crowds erupt in a city here in the United States? And why hasn't it happened already?

    "And why hasn't it happened already? " (none / 0) (#77)
    by NYShooter on Mon Aug 08, 2011 at 06:53:48 PM EST
    First of all, it will. Psychological reports I've read have explained that "social unrest" is inevitable, and will occur.  The reason it hasn't happened yet is that the Plutocratic forces at work in the U.S. have been at work since about the election of R. Reagan, and since America is the "Big Banana" the move towards American serfdom has been slow, deliberate, and so far, extremely effective.

    In my opinion, the real beginning was with Nixon, and the "Southern Strategy,"  They took advantage of disaffected whites after the civil rights advancements, and made white anger the centerpiece of the movement.

    That was followed by Nyquist, political activity at the grass roots level, and especially, the consolidation of the media into right wing hands. With the successful grass roots efforts, they were able to stack the Supreme Court (and lesser courts) with Right Wing, Oligarch supportive, ideologues.  With the immigration of R. Murdoch, we got talk radio, Fox, and the prostitution of print "journalism."

    And the rest is history.

    So, it'll take a little longer here, but it's coming.

    Parent

    They are being plannned (none / 0) (#82)
    by Madeline on Mon Aug 08, 2011 at 08:20:19 PM EST
    just not advertised in media.

    Parent
    Tel Aviv rocked by protestors. (none / 0) (#78)
    by caseyOR on Mon Aug 08, 2011 at 07:46:49 PM EST
    Angered by the social and economic inequities in Israel, a quarter of a million people have taken to the streets in Tel Aviv.

    Crowds are occupying public areas and marching through the city.

    When will Americans take to the streets?

    Parent

    flight to "safety" (none / 0) (#83)
    by diogenes on Mon Aug 08, 2011 at 08:28:00 PM EST
    US Treasuries are doing well not because they are "AAA" quality but because in the short run they are the safest alternative to losing short-term money in the stock market.  

    SITE VIOLATOR (none / 0) (#87)
    by caseyOR on Tue Aug 09, 2011 at 12:13:17 AM EST


    US Treasuries Show Lower Yields Than Before S&P Downgrade | 92 comments (92 topical)

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