Skip to comments.Warning: US Loses AAA Credit Rating. Consequences Will Be Dire
Posted on 08/07/2011 12:26:41 PM PDT by charlene4
Around the world, starting Monday, all eyes are on the markets. The tension is palpable. The uncertainty is ample. And anger is heavy in the air. As predicted, the debt ceiling deal was not only NOT enough to assuage economic fears, it actually exacerbated them, triggering a flight from the Dow, and creating a decisive opportunity for ratings agency S&P to cut the once perfect U.S. credit rating from AAA to AA+.
At Alt-Market, we often talk about points of balance, and how certain moments in history become highly visible indicators of balance lost. If we pay close attention, and know what we are looking for, these moments can be recognized, allowing us time to shield ourselves from the explosion and the resulting financial shrapnel. The past two weeks have culminated into one of these defining events that tell us the tide has fully turned, and something new and dangerous is just over the horizon. The question now is; what should we expect?
The nature of the credit downgrade situation is not necessarily "unprecedented" in history, but it is surely unprecedented on the scale we see currently in the U.S. It is difficult to predict how exactly the investment world will react. Some consequences, though, are probable, if not inevitable. Let's examine the events we are likely to see in the coming weeks as well as the coming months, as nations attempt to adjust to America's final plunge...
(Excerpt) Read more at OathKeepers.org ...
Markets opening soon here
As predicted, the debt ceiling deal was not only NOT enough to assuage economic fears, it actually exacerbated them, triggering a flight from the Dow, and creating a decisive opportunity for ratings agency S&P to cut the once perfect U.S. credit rating from AAA to AA+.
and, this adds more pressure on Italy Greece and Portugal.
maybe enough to make them collapse.
...which in turn, will drag us down futher.
ALL of which might have been avoided, if Boehner had held out for the tiny MINIMUM of 4 trillion in cuts,
that the S&P said were necessary, BEFORE THE FINAL VOTE.
Boehner and McConnell were willing accomplices in this.
they did not HAVE to agree. they could have held the line,
for at least enough cuts to avoid the downgrade.
instead, they caved to Obama.
DNC Chairman Debbie Wasserman Schultz:We own the economy - June 15, 2011
We're going to hang you, your commie boss and all the dims with this Ms. Wasserman Schultz!
FUBO GTFO 2012 !
They are being quite legitimately accused of having precipitated the Mortgage crash (which cost us several trillion dollars), and for no more than about $4 billion in added value to their clients.
That doesn't mean Obama and his running dog lackeys are doing anything right, but it does mean S&P is not exactly highly respected (outside a certain rather greedy segment of the investment community).
USA TODAY is reporting that CHOI (South Korea) may issue a statement on US debt before the Asian Markets open.
Glasses half full: first step to recovery is to accept that you have a problem.
Prior too the debt ceiling debate and the downgrade, it was business a usual.
Here’s hoping that it is painful enough to get the required attention and action, but not too painful to make life miserable for us.
Has it been established if S&P are terrorists or racists or are they both?
A very good post.
Everyone could see this coming except Obama, Democrats and RINO’s who voted to kick the debt down the line.
Sooner or later we will have to pay the piper, it should have been done sooner.
Cutting entitlements would have hurt the entitlement class, but now everyone will get screwed. Wealth redistribuiotn will turn out to be no wealth to redistribute.
Because for decades, U.S. markets seem increasingly to love it when something happens that is bad for America's well-being.
not bad, but good and necessary to fix what was bad and inevitable
” None of us voted for anybody at S&P. “
please. the “voting” argument in ludicrous.
i didn’t vote for any of the Supreme Court Judges either.
or any of the EPA with their 10.7 BILLION dollar budget,
who are killing jobs faster than they are made.
...i don’t need to vote for the messenger, for them to be correct.
“They are being quite legitimately accused of having precipitated the Mortgage crash”
not Thomas Sowell, or ANY economist i respect has ever said that. simply not true.
...Carter started it, with the Community Reinvestment Act in the 70’s. the tricks with Fannie and Freddie hide it for years.
that SAME toxic debt is what KILLED Ireland and Greece.
(look it up. Goldman-Sachs sold it to Greece in a serious of transactions.)
We are NOT the same credit rating we were in the 1960’s,
when we were the creditor of the world, not the debtor.
We should have been downgraded BEFORE now.
to blame S%P, is blaming the whiste-blower, as Obama and the libs are doing.
(...that is as ridulous as praising Islam, because you think it improved woman’s rights, by making them property.
when all NON-REVISIONIST history, shows women had more rights before Mohammad, as proved by his own wife employing him!)
not bad, but good and necessary to fix what was bad and inevitable
agreed. denying a problem, allows it to become worse.
that’s why our military is the best in the world.
because they can identify and fix problems,
IMMEDIATELY and at a low level.
if you pass a bill with built in increases,
adds 9 trillion net debt over 10 years (while cutting 1?)
and give Obama another 2.4 trillion to add to the debt,
should S&P have praised us?
our Founding Fathers didn’t kick the can down the road.
they risked their lives and sacred honor,
to do the right thing. now.
which is what Mark Levine, Rush, DeMint, and Jim Robinson said to do.
and with Europe on the verge of collapse, it is even MORE important to get the USA on a stable footing NOW !
When it comes to Supreme Court justices there's no reason why they can't be elected.
Modern electronics and communications allow us to expand the frachise beyond the executive suites at McGraw Hill (where S&P is managed from) into whole world if need be.
There's no reason not to expand the franchise.
BTW, that was more or less the thinking of Cleisthenes when he broke the power of the self-appointed aristocracy of his time.
I’ve been told that many funds have by-laws, which require AAA rated bonds be held (think pension funds, etc.). These funds will dump treasury bonds...but they also have by-laws which prevent them from holding cash...so I imagine they will purchase stocks, or debt from the 17 remaining AAA nations.
I can see a roller coaster, as this is all happening. The amount of money in ‘the markets’ will stay the same...but alot of it may go to foreign markets in the morning.
Our whole society needs a reset.
The great majority of people have lived such pampered lives compared to earlier American generations, that they have lost touch with what’s really important.
The only way such people learn is by being plunged into a crisis.
And when in history the majority of a society reaches such a state of ignorance, it hugely contributes to bringing on just the crisis needed to wake them from their ignorance—by plunging them into great hardship.
We are very likely into such a crisis now, and it may happen that the climax of this crisis will be another great depression.
And you? Where do you get your history? Can you put a name to the source?
Probably true. Good chance the Dow and NASDAQ will do nothing extreme in any direction tomorrow.
But I wouldn’t be surprised if they went up—I’m not predicting they will, only that it wouldn’t surprise me.
S&P is a division within a magazine publisher. They are, frankly, “old media”.
Blaming S&P is a non sequitor. They are simply stating their opinion on the creditworthiness of US debt. If someone doesn’t like it, then go issue your own opinion on the debt.
One of the main problems in the mortgage securities meltdown was that the people buying the securities didn’t bother to look and see what they were buying, because S&P said they were great.
It’s like going to see a Hollywood movie just because Roger Ebert said it was great. After buying a ticket and seeing that it sucks, there is no point in blaming Roger Ebert. You could have looked into what the movie was about and checked other reviews beforehand and perhaps noticed that it was starring Ben Affleck or whomever.
The government should never have started down the road of giving the imprimatur of approval to the rating agencies and bringing them under regulation. It’s like making Roger Ebert a “nationally recognized movie rating organization” and trying to regulate him.
I don’t know if voting is the answer. Witness the American system, the choice we were then pesented with and the choice we made in 2008.
Your link will be an interesting one to watch thenext few days!
The Asia Ex Pats story reminds me of a recent experiance.
March - April I was in Puerto Vallarta, MX. Over the last 28 yrs US dollars were gladly accepted, if not prefered by stores and vendors. A few months ago they asked me if I had pesos instead. I was surprised the first time it happenned,when it happened everywhere and they would not cash AMEX Travelers checks either. I was shocked.
Now I have read that after sometime in Sept, 2011 NO ONW will accept USDollars In Mex.
So Mexico and Asia...where next?
It is apparent they believe that they indeed DO
*own the economy*.
OURS and the effects on others.
The *owners* screwd up.
They used to be able to hide behind private interviews with powerful people. Now they can't. I don't think they realize that yet/
The people at S&P really aren't different ~ they watch birds in the sky and examine the entrails of sheep. They look up cow's behinds to check out the future.
It isn't any different.
Any position that important should become subject to ELECTION by the public.
Recently the Narcotrafficantes have been robbing and murdering tourists. If all you have on you are pesos they’ll probably leave you alone.