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

S&P Cuts AAA Muni Ratings Linked to U.S.

Standard & Poor’s lowered the AAA ratings of thousands of municipal bonds tied to the federal government, including housing securities and debt backed by leases, following its Aug. 5 downgrade of the U.S.

The rating company assigned AA+ scores to securities in the $2.9 trillion municipal bond market including school- construction bonds in Irving, Texas; debt backed by a federal lease in Miami; and a bond series for multifamily housing in Oceanside, California. Olayinka Fadahunsi, an S&P spokesman, said he couldn’t provide a dollar figure on the affected debt.

S&P also cut ratings on securities backed by Fannie Mae and Freddie Mac, prerefunded issues and munis repaid by using federal assets, also known as defeased or escrow bonds. No state general-obligation ratings were affected and the company said some may remain unchanged.

“It’s expected, but nobody is happy about it,” Bud Byrnes, chief executive officer of Encino, California-based RH Investment Corp., said in a telephone interview. “No one that I know thinks it was justified to cut the U.S. bonds to AA+. Once that happened, you knew that any prerefunded bonds or escrowed bonds would be downgraded too. It’s a domino effect.”

Byrnes said funds required to invest in AAA bonds would be most affected by the downgrades and may be forced to liquidate some holdings. “They will have a hard time replacing that yield,” he said. ...... more

www.bloomberg.com...

Bout time this all came down. I have been waiting for a time like this. This is what we need. TPTB dont expect us to band together in a time like this. they want choas and anarchy so they can control the populus easier(not to mention eliminate some). So instead of worrying about yourself think about your neighbours, we would all live in a better world if we all helped one another out. Im not worried about all this...are you?

Originally posted by gorgi

Originally posted by Eurisko2012

Originally posted by gorgi
People still take the S&P seriously? After the way they have rated other countries while they knew that they were bad investments. They even made an error in their calculations and people here take them seriously. Oh They are only taken seriously when the doomers here agree with it. Other wise they are lieing banisters.

Why S.&P.’s Ratings Are Substandard and Porous

Believe me. All of the other rating agencies are right behind S&P.
We need to reduce government spending.
The debt deal failed to do that.
----------------
Just look at the numbers.
We are spending $4 billion a day!
This is nuts!
---------------
I'll be glad when we turn this page in history.

Thats incorrect , Moodys and Fitch are both going to keep the AAA status for the USA. They have already said that.

Hold your breath.
All of this massive deficit spending must come to an end.
Obama has NO answers.

Originally posted by TiM3LoRd
And once again the American people take up the poop shoot. You guys must love getting raped by your government. its so pathetic its sad. NOT ONLY did you lose your coveted AAA rating but you guys also raised the debt ceiling so now your MORE in debt that you were before and you STILL lost your rating!!!!!!


Your government are either brain dead beyond human understanding or this is all planned to fail. im betting on the latter because i cant understand how someone who got themselves into a position of power could have done so on pure blind luck. You need to get off your asses and march now seriously.

Just so you're clear on the debt ceiling... it doesn't place us "MORE in debt" as you stated. It's more like a credit limit. If I have a credit card with a credit limit of $2000.00 and I've already spent $1990.00 of it, I have two options... increase my credit limit or not increase it. If I have a bill that I must pay but don't have enough income to cover it, I can no longer use my credit card to do so if I don't increase my credit limit. But, I can increase my credit limit to lets say $3500.00, pay my one bill, make cuts in my budget somewhere else, and not use the card anymore. That was the goal of the debt ceiling. The ceiling itself does not add more debt... it's the spending of the money that we really don't have on this government credit card (so to speak) that does. Just helping you understand.

reply to post by SilentKillah

Originally posted by TiM3LoRd
And once again the American people take up the poop shoot. You guys must love getting raped by your government. its so pathetic its sad. NOT ONLY did you lose your coveted AAA rating but you guys also raised the debt ceiling so now your MORE in debt that you were before and you STILL lost your rating!!!!!!


Your government are either brain dead beyond human understanding or this is all planned to fail. im betting on the latter because i cant understand how someone who got themselves into a position of power could have done so on pure blind luck. You need to get off your asses and march now seriously.

Just so you're clear on the debt ceiling... it doesn't place us "MORE in debt" as you stated. It's more like a credit limit. If I have a credit card with a credit limit of $2000.00 and I've already spent $1990.00 of it, I have two options... increase my credit limit or not increase it.

There is a 3rd option: pay down your credit card.

The only thing that increasing your limit does is put you in the same boat next month. That is a never ending cycle into bankruptcy.

So a mystery investor invested 850 million in the future market 2 weeks before the US lost its AAA+ rating and made 10 billion after it fell to AA.

Link to article.

Originally posted by Recloose
So a mystery investor invested 850 million in the future market 2 weeks before the US lost its AAA+ rating and made 10 billion after it fell to AA.

Link to article.

Hahaha, 850m...you think that's a large bet against the market? I bet against it, a TON of other people did too, hell, if you consider FOREX trades too, the amount was even larger.

It doesn't necessarily mean someone had insider knowledge, just that he felt pretty sure about what he was doing. He/she/it could also have hedged against things going the other way and minimize any losses...especially if he invested in futures.

It wasn't even a difficult bet. No plan that was on the table 2 weeks before the deadline would have solved the issue. They only really focused on spending cuts, which are NOT enough to fix the deficit. Tax increases have to be a part of the solution or the deficit won't be fixed. Moody's and a ton of other analysts realize this too and are threatening a downgrade too if they don't start using their brains by 2012.

I also think it's kinda funny how the article blames Soros without presenting the slightest proof.

You all know that the S&P downgraded the US and the other two still have it at AAA right ? And besides the S&P's calculations were flawed and they have a record of making bad decisions. No one here wants to acknowledge that though. For some reason you guys want the US to fall and look for every reason to believe so, even if its a false flag.

Originally posted by gorgi
You all know that the S&P downgraded the US and the other two still have it at AAA right ? And besides the S&P's calculations were flawed and they have a record of making bad decisions. No one here wants to acknowledge that though. For some reason you guys want the US to fall and look for every reason to believe so, even if its a false flag.

I don't want the US to fail at all, but they need to be realistic if they want to fix their problems. Right now, their deficit is more than 100% their GDP!! It should be abundantly clear why they were downgraded.

reply to post by MrXYZ


So what if its over 100%. There is no rule that says it has to be downgraded. The other two havent and only the S&P has and there was an error in their calculations and they still did it. That just makes them untrustworthy. The US has always paid its debt and always will.

Originally posted by gorgi
reply to post by MrXYZ

 

So what if its over 100%. There is no rule that says it has to be downgraded. The other two havent and only the S&P has and there was an error in their calculations and they still did it. That just makes them untrustworthy. The US has always paid its debt and always will.

It makes perfect economic sense to downgrade a country with a deficit higher than GDP!! It should be standard procedure...at least to anyone who has a clue about economics.

Also, the other 2 rating agencies both came out and also said the government isn't handling the deficit correctly, and that tax increases are a must. They are pretty open about this and said that a downgrade will happen depending largely on how they handle the largest single-policy contributor to the deficit, the Bush tax cuts. If they remain, expect the other rating agencies to follow.

But the ratings are the least of the US's worries if they don't fix the deficit. The entire government, and even the people, base their entire lives on DEBT. That's NOT sustainable long term

Originally posted by MrXYZ

Originally posted by gorgi
reply to post by MrXYZ

 

So what if its over 100%. There is no rule that says it has to be downgraded. The other two havent and only the S&P has and there was an error in their calculations and they still did it. That just makes them untrustworthy. The US has always paid its debt and always will.

It makes perfect economic sense to downgrade a country with a deficit higher than GDP!! It should be standard procedure...at least to anyone who has a clue about economics.

Also, the other 2 rating agencies both came out and also said the government isn't handling the deficit correctly, and that tax increases are a must. They are pretty open about this and said that a downgrade will happen depending largely on how they handle the largest single-policy contributor to the deficit, the Bush tax cuts. If they remain, expect the other rating agencies to follow.

But the ratings are the least of the US's worries if they don't fix the deficit. The entire government, and even the people, base their entire lives on DEBT. That's NOT sustainable long term

Oh please inform this economist here on economics. I need the help apparently. And no its a rule that says the country has to be downgraded because of that. the Us is not going to default and here is no risk of it. the US bonds are among the safest in the world.

reply to post by gorgi


Would you consider a guy spending more than he earns a "top creditor". If the answer is "no", you're lying

They only downgraded them to AA+...which is the rating they should have had a long time ago. How on earth do you expect them to ever fix an issue if they don't acknowledge it? Now they HAVE to acknowledge it and address the issue...apparently you need to force them to act responsibly

Jim Rogers sums it up nicely:

Who are S&P? They are owned by McGraw Hill.

Who owns McGraw Hill? Here is a list of the top shareholders with a few banks for comparison

McGraw-Hill STATE STREET CORPORATION 13,219,460 VANGUARD GROUP, INC. (THE) 12,700,984 OPPENHEIMER FUNDS, INC. 11,583,534 PRICE (T.ROWE) ASSOCIATES INC 10,123,060 BlackRock Institutional Trust Company, N.A. 7,541,685 DODGE & COX INC 7,145,277 FIDUCIARY MANAGEMENT, INC. 6,241,434 Capital World Investors 37,498,950

Citigroup (a major NYFED bank) STATE STREET CORPORATION 109,336,377 VANGUARD GROUP, INC. (THE) 106,566,654 FMR LLC 94,647,036 BlackRock Institutional Trust Company, N.A. 69,300,847 JP MORGAN CHASE & COMPANY 54,420,770 Capital World Investors 51,039,134 PAULSON & COMPANY, INC. 41,272,220 Bank of New York Mellon Corporation 32,334,689

Wells Fargo Bank: BERKSHIRE HATHAWAY, INC 342,623,925 6.48 STATE STREET CORPORATION 201,430,222 3.81 FMR LLC 199,105,601 3.76 VANGUARD GROUP, INC. (THE) 187,182,216 3.54 Capital World Investors 167,562,496 3.17 WELLINGTON MANAGEMENT COMPANY, LLP 152,451,637 2.88 BlackRock Institutional Trust Company, N.A. 127,846,678 2.42 DAVIS SELECTED ADVISERS, LP 93,493,190 1.77 DODGE & COX INC 90,998,349 1.72 JP MORGAN CHASE & COMPANY 88,094,321 1.67

Bank of America (BOA) STATE STREET CORPORATION 459,140,568 VANGUARD GROUP, INC. (THE) 367,462,397 BlackRock Institutional Trust Company, N.A. 258,068,893 JP MORGAN CHASE & COMPANY 212,406,485 Capital Research Global Investors 139,198,856 JANUS CAPITAL MANAGEMENT, LLC 138,866,931 WELLINGTON MANAGEMENT COMPANY, LLP 128,084,369 Capital World Investors 125,333,396 PAULSON & COMPANY, INC. 123,634,429 FMR LLC 121,244,950

JP Morgan Chase STATE STREET CORPORATION 163,393,908 VANGUARD GROUP, INC. (THE) 144,458,569 FMR LLC 129,731,859 PRICE (T.ROWE) ASSOCIATES INC 106,375,235 BlackRock Institutional Trust Company, N.A. 105,992,018 WELLINGTON MANAGEMENT COMPANY, LLP 89,651,480 Capital Research Global Investors 82,353,239 Capital World Investors 55,091,800 Bank of New York Mellon Corporation 54,615,722

Goldman Sachs STATE STREET CORPORATION 20,744,311 Capital World Investors 19,599,110 VANGUARD GROUP, INC. (THE) 18,311,709 BlackRock Institutional Trust Company, N.A. 13,372,248 MASSACHUSETTS FINANCIAL SERVICES CO - OTHER 11,518,906 AllianceBernstein, L.P. 10,139,709 JP MORGAN CHASE & COMPANY 9,531,309 WELLINGTON MANAGEMENT COMPANY, LLP 8,374,730 FMR LLC 7,462,573 FAIRHOLME CAPITAL MANAGEMENT 6,702,300

Source

State Street Corporation is a major shareholder of all of these companies as is BlackRock Institutional trust, the Vanguard Group, and Capital World Investors. In other words-they are all owned by the same people.

In addition, McGraw Hill is a major publisher and provider of school textbooks. They are controlling what our kids learn!

www.mheonline.com...
www.mheonline.com...


And these were the same people that gave AAA rating to all the mortgage backed securities. The MSM is playing that off the last few days like it was an error in judgement instead of the fraud it was.


If ever there was a question who really runs the country this should put that to rest.

Originally posted by 0zzymand0s
If Rothbard had been correct, the Bush tax cuts would have produced jobs, rather then 2 jobless recoveries.

The Bush tax cuts were purely political, not economical. You can tell the press you're going to cut x amount of taxes but then you turn around and start wars. That isn't cutting taxes.

reply to post by MrXYZ


People are not the same as countries. People cannot declare war or own nuclear weapons either.
Countries are different and the US can borrow more based on the fact that it will pay it back. The country has never missed a payment. It is not in trouble and is the worlds super power. Crazy huh ?

Originally posted by gorgi
reply to post by MrXYZ

 

People are not the same as countries. People cannot declare war or own nuclear weapons either.
Countries are different and the US can borrow more based on the fact that it will pay it back. The country has never missed a payment. It is not in trouble and is the worlds super power. Crazy huh ?

The only reason they could pay it back is because the dollar is the world reserve currency and the FED can pretty much print more money as needed. This last crisis made it abundantly clear that he dollar will lose its position as the world's reserve currency in the medium term...and what then? When it happened to the Sterling last time, it lost 80% in vallue. They also couldn't just keep on printing money like they are now, which will cause a whole range of issues...such as having difficulties repaying debt. China knows this, Russia knows this, and good analysts like Jim Rogers know it as well.

In short, just because they never missed a payment doesn't mean they won't in the future. So you are essentially saying "let's get more debt because in the past we always repaid it". That's complete and utter nonsense, you don't keep on lending to someone who's clearly not able to keep repaying like that. Have you looked at the graph highlighting how much the debt will INCREASE over the next 10 years? The creditor nations have all the right in the world to be worried

reply to post by MrXYZ

In short, just because they never missed a payment doesn't mean they won't in the future. So you are essentially saying "let's get more debt because in the past we always repaid it". That's complete and utter nonsense, you don't keep on lending to someone who's clearly not able to keep repaying like that. Have you looked at the graph highlighting how much the debt will INCREASE over the next 10 years? The creditor nations have all the right in the world to be worried

Credit history is probably the most important factor a bank considers when processing a loan application. So please don't downplay it as irrelevant.

Originally posted by mishigas
reply to post by MrXYZ

 

In short, just because they never missed a payment doesn't mean they won't in the future. So you are essentially saying "let's get more debt because in the past we always repaid it". That's complete and utter nonsense, you don't keep on lending to someone who's clearly not able to keep repaying like that. Have you looked at the graph highlighting how much the debt will INCREASE over the next 10 years? The creditor nations have all the right in the world to be worried

Credit history is probably the most important factor a bank considers when processing a loan application. So please don't downplay it as irrelevant.

It's not irrelevant...but when it comes to loan applications, if you tell your lender that you will probably receive a pay cut of 50%, they won't lend you the same amount...or consider you a good creditor.

People need to stop acting as if they have sand in their vaginas...it's only a 1-step downgrade, and a well justified one. No one's saying the US is a bad creditor, just that they are NOT a top creditor given the current state of the deficit and economic outlook. Add to that the fact that the government handled the crisis extremely badly (that includes ALL parties), and you should realize why the US was downgraded.

Don't let blind patriotism cloud your mind from common sense!!

I'll ask again: If you are spending more than you make, do you truly believe a creditor will consider you a TOP creditor?

Answer: OF COURSE not!! Doesn't mean you can't get loans, but with those characteristics, you are definitely not a top-of-class debtor.

Well I guess all the terrorists that said we will drag this battle out forever and will not defeat you on the battleground we will make you crumble from the inside, were telling the truth...looks like america is losing this war lol