Skip to comments.Mystery surrounds details of S&P downgrade [ CNN rejects Axelrods & Kerrys TP blame ]
Posted on 08/08/2011 1:00:42 PM PDT by NoLibZone
WASHINGTON (CNNMoney) -- Little is known about key details that led Standard & Poor's to downgrade U.S. debt late Friday, despite its outsized repurcussions.
While the move knocking U.S. debt down a notch from the lofty AAA rating has exacerbated an already skittish stock market and drawn criticism from the White House, key details are a mystery.
S&P doesn't say who, exactly, made the decision at the company; what kind of weight they gave U.S. politics versus ability to pay; or to what extent they felt pressured to downgrade the United States in response to criticism of its downgrades of risky European nations.
Standard & Poor's is one of three major credit rating agencies -- along with Moody's and Fitch -- that make money by giving grades on how likely it believes that a nation, municpal government or company will pay off its debt.
However, the rating companies are unregulated, even as their ratings garner big-time consequences. And while S&P officials have talked about the "flavor of some of the assumptions," including their doubts about the ability of Congress and the White House to work together to cut deficits, they don't have to reveal details of their discussions.
During the financial crisis, these same agencies got hammered for their decision to give top grades to securities based on risky mortgages made to homeowners destined to default on their loans.
And while their grades to sovereign debt haven't been as tarnished as their grades to mortgage-backed securities, critics in both cases have questioned the greater significance for the markets.
(Excerpt) Read more at money.cnn.com ...
Barack Caesar: “Et tu, CNN?”
What mystery? S&P said they were looking for $4 trillion in cuts and did not get it. The real question is why did that wake up now and not a decade or two ago.
furiously working behind the scenes....to get this backdated 3 years so it’ll be Bushs fault.
Say what you want, but I applaud S&P for downgrading us after that ridiculous bill was passed last week. Until this country and it’s pathetic politicians get serious about cutting spending and entitlements, it’s a farce to have a AAA+ rating.
The pressure is on my FRiends. I’ll bet the S&P revises it’s decision within a month.
We are so screwed.
I expect Eric Holder to begin investigating S&P by Friday.
It’s the Chicago/Alinsky way.
They are already backtracking
S&P Director: Downgrade Not ‘Catastrophic’ For U.S. Credit-Worthiness
What mystery indeed.
We have run deficits averaging 1.5 TRILLION dollars per year since Obama was elected and he and the Democrats want to spend even higher deficits for the next 10 years.
The country was at a total debt of about 70% GDP from all of American past borrowing in history before Obama took office.
The US is now at a total debt of about 100% of GDP after the Obama and Congressional Democrats spending spree since 2008, and Obama wants to accelerate that spending spree to a total debt to 120% before 2012.
Concern that America might have a bit of trouble with this degree of debt load given our entitlement obligations going forward is a mystery to some. I really want those “some” to go on record so it will be clear who the idiots are that cannot understand this so we don't put them into responsible positions.
Well, of course, the “Downgrade” in and of itself is not catastrophic.
The reckless out of control spending that is the reason for the down grade is however is becoming catastrophic.
I had CNN on briefly this morning and the woman on the screen was spinning the S&P rating as a sign that taxes need to be raised.
Afraid of reprisals, maybe? With zero as president and Holder running the "Justice" department, I'd be afraid, too.
The down grade was either a political act, or they realized the game was about up anyway.
We should have been down graded a long time ago.
“Tea parties fault!”
That is the talking point. I don’t know how much it will stick though. Even the Kool Aide drinkers are turning on Obama.
But of course. Obama's speech was essentially saying the same thing.
The foolishness of it is that at this point in the business cycle, raising taxes will lower incomes, so they will collect a higher percentage of less income, along with higher employment. It won't help anything.