USA Downgraded

[Phatscotty]

America's AAA rating survived the Great Depression but could not survive an ever-growing but currently at $14.5 trillion and 2.5 years of the Obama administration. Maybe that will put things into perspective.

no no, the AAA rating, which survived the great depression, was downgraded because of a pissing contest in congress.

[Army of GOD]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

[GreecePwns]

Because our "ridiculous debt" is not nearly as much as some of the other world powers, and isn't really that ridiculous on comparison.

[Phatscotty]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

because the debt level has/is approaching 100% of GDP, and we recently have had to borrow money just to pay the interest we owe on previous borrowed money.

It got lowered because we are diving headfirst into more debt, up to 17 trillion now. That has an impact on the US dollar and it's value, which in turn has an impact on gold prices, bonds, and interest rates. The answer of "We will print our way out of debt" means that if you invest in America from here on out you can expect to be paid pack with inflated/worthless dollars. Markets are weaker now than they were in 2007 and the economy is barely growing so the previous estimates and budget plans have to be revised even further. it all adds up to a downgrade for fiscal irresponsibility and an even stronger reliance on borrowing just to operate day to day.

[Woodruff]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

Because Bush cooked the books: http://www.nytimes.com/2009/02/20/us/po ... t.html?wtf

[Baron Von PWN]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

because the debt level has/is approaching 100% of GDP, and we recently have had to borrow money just to pay the interest we owe on previous borrowed money.

It got lowered because we are diving headfirst into more debt, up to 17 trillion now. That has an impact on the US dollar and it's value, which in turn has an impact on gold prices, bonds, and interest rates. The answer of "We will print our way out of debt" means that if you invest in America from here on out you can expect to be paid pack with inflated/worthless dollars. Markets are weaker now than they were in 2007 and the economy is barely growing so the previous estimates and budget plans have to be revised even further. it all adds up to a downgrade for fiscal irresponsibility and an even stronger reliance on borrowing just to operate day to day.

No your credit rating was lowered because some of your politicians are so petty they almost caused your country to default because of ideological idiocy."print more money" hasn't been the answer to keeping the government running. If it was you would be seeing hyper inflation, and that has clearly not been the case. the answer has been to sell more bonds which foreigners remain eager to buy, because your debt isin't that bad!. Your public debt remains manageable at ~65% of GDP a good 35% short of your absurd claim of 100%.

That american politicians turned down a deficit reduction plan because it included revenue increases is sheer lunacy. The (R)etards even opposed closing tax loopholes and eliminating tax credits. It is a congress controlled by (R)etards which has caused S&P to lower your credit rating. As it stands a significant portion of congress thinks you can stop a ship with a hole in it from sinking purely through bailing out water. Unfortuneltly for them you eventually have to plug the hole.

[thegreekdog]

I think Fruitcake's point is - who cares what S&P says?

In related news, Michael Moore suggested that President Obama have the officers of S&P arrested. This confirms my theory that liberals are pro-police state (typed sort of tongue in cheek).

Yeah.. still waiting for Fruitcake, but that could well be correct.

I only just learned that the downgrade was just for one of the 3 big rating agencies. Apparently the other ones are holding off, depending on decisions made. The S & P DID make their decision as much on politics as economics.

On another front, one thing I predicted is happening. Stocks are dropping to what is likely an unreasonable level. No doubt folks with money will be swooping up the bargains and making a killing. Others will simply be moving over to gold. Suspect gold will be over-priced for a while.

I'm not sure that's the best idea. I'm not a stock market kind of guy, but I think most people would buy stocks low (i.e. now). In fact, I'm actually getting together with my brother this weekend to figure out what we want to buy on Monday.

[jbrettlip]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

[PLAYER57832]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted. China is not pulling out of US treasuries, because despite all, they remain the most viable investment for them.

None-the-less, a LOT of people are taking some very serious hits due to this stock slide.

[PLAYER57832]

I think Fruitcake's point is - who cares what S&P says?

In related news, Michael Moore suggested that President Obama have the officers of S&P arrested. This confirms my theory that liberals are pro-police state (typed sort of tongue in cheek).

Yeah.. still waiting for Fruitcake, but that could well be correct.

I only just learned that the downgrade was just for one of the 3 big rating agencies. Apparently the other ones are holding off, depending on decisions made. The S & P DID make their decision as much on politics as economics.

On another front, one thing I predicted is happening. Stocks are dropping to what is likely an unreasonable level. No doubt folks with money will be swooping up the bargains and making a killing. Others will simply be moving over to gold. Suspect gold will be over-priced for a while.

I'm not sure that's the best idea. I'm not a stock market kind of guy, but I think most people would buy stocks low (i.e. now). In fact, I'm actually getting together with my brother this weekend to figure out what we want to buy on Monday.

Seriously wish I had money to invest right now!

[Timminz]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

[thegreekdog]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

Because the United States didn't default? I'm not sure.

[Timminz]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

Because the United States didn't default? I'm not sure.

I'm going to ask my finance professor, this evening. I will report back, if he has any idea, and no one else has clarified for us yet.

[PLAYER57832]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

Because the United States didn't default? I'm not sure.

Anyone (knowledgeable) with a different idea, feel free to chime in. However, what I have garnered from multiple interviews and analysis I have heard or read is that the US is still relatively sound, despite the downgrade. To some extent, this is because everyone else is worse off. (in other words, some feel Treasuries still are good, others just think they are currently better than stocks).

I am told China is a big part. They, apparently have little choice because their economy is so heavily tied to the dollar. Any other type of investment would be even more unstable.

Me.. I find that our biggest competitor is also our biggest investor to be downright frightening!

[jbrettlip]

There are countries still rated AAA. This was only a long term downgrade, and they cited the political atmosphere and the debt ceiling as the reason. This was also only 1 of three agencies.

THe treasury market is massive. It is pretty much unavoidable that you have exposure to US treasurys. Banks, corporations, local governemnt etc all hold or trade in them. Even in a technical default, market opinion was that the treasury market would remain liquid and vibrant. That is the difference between being able to print as much currency as you want vs being a functioning business.

[Phatscotty]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

because the debt level has/is approaching 100% of GDP, and we recently have had to borrow money just to pay the interest we owe on previous borrowed money.

It got lowered because we are diving headfirst into more debt, up to 17 trillion now. That has an impact on the US dollar and it's value, which in turn has an impact on gold prices, bonds, and interest rates. The answer of "We will print our way out of debt" means that if you invest in America from here on out you can expect to be paid pack with inflated/worthless dollars. Markets are weaker now than they were in 2007 and the economy is barely growing so the previous estimates and budget plans have to be revised even further. it all adds up to a downgrade for fiscal irresponsibility and an even stronger reliance on borrowing just to operate day to day.

No your credit rating was lowered because some of your politicians are so petty they almost caused your country to default.

yes, our credit rating was downgraded over bickering.

You information is wrong, we were never going to default. It was a lie, and it worked on you.

[Phatscotty]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

perhaps it's the fed who is buying all the bonds/monetizing the debt

[Baron Von PWN]

Wait, I haz question. How have we managed to hold onto a AAA rating this far even though we've been in ridiculous debt for years now. We haven't shown any attempt to pay any of it off, yet we finally get lowered now?

because the debt level has/is approaching 100% of GDP, and we recently have had to borrow money just to pay the interest we owe on previous borrowed money.

It got lowered because we are diving headfirst into more debt, up to 17 trillion now. That has an impact on the US dollar and it's value, which in turn has an impact on gold prices, bonds, and interest rates. The answer of "We will print our way out of debt" means that if you invest in America from here on out you can expect to be paid pack with inflated/worthless dollars. Markets are weaker now than they were in 2007 and the economy is barely growing so the previous estimates and budget plans have to be revised even further. it all adds up to a downgrade for fiscal irresponsibility and an even stronger reliance on borrowing just to operate day to day.

No your credit rating was lowered because some of your politicians are so petty they almost caused your country to default.

yes, our credit rating was downgraded over bickering.

You information is wrong, we were never going to default. It was a lie, and it worked on you.

I'm not the one who posted obviously false statements, but we all know you dislike appearing credible.

[jbrettlip]

THe fed 's bond buying program ended, except for maturing securities that they are rolling into new purchases. THe appetite for treasuries is still huge throughout the world. The rating doesn't mean anything. Llok at SIV's in 2008. AAA rated but the market had already decided they were junk and they could not get funded. It wasn't a ratings downgrade that spurred them to fail, it was lack of market interest due to their credit qualitiy. THe US can print 14 trillion dollar bills today and effectively be out of debt. (Of course this would have huge ramifications, but we could do it....no other country could).

[greenoaks]

THe US can print 14 trillion dollar bills today and effectively be out of debt. (Of course this would have huge ramifications, but we could do it....no other country could).

Australia could print 85 billion dollars and be out of debt

[PLAYER57832]

Did anyone notice the fact that treasuries RALLIED Monday? Probably not, since people on here jsut make shit up and don't actually look at the real world.

Treasuries rallied, the stock market plummetted.

This is something I'm having trouble wrapping my head around. Why, upon news of the USA being less credit-worthy, are people leaving private investments, and moving towards more government bonds? It seems rather counter-intuitive to me.

perhaps it's the fed who is buying all the bonds/monetizing the debt

No, while that was done before, this time that option was rejected.

Turning up stones to find traces is good technique. Pretending you can see through stones is not.

[Phatscotty]

QE3 has been rejected?

[PLAYER57832]

QE3 has been rejected?

so far, yes.

[Phatscotty]

QE3 has been rejected?

so far, yes.

Let's clarify. You believe them (the same people who said they would never do QE1) when they say they won't QE3. I laugh when they say QE3 is rejected.

Perhaps there are a few stones in the past you should turn up to seek the truth and the reality of QE and what has been said about it in the past.

[PLAYER57832]

QE3 has been rejected?

so far, yes.

Let's clarify. You believe them (the same people who said they would never do QE1) when they say they won't QE3. I laugh when they say QE3 is rejected.

Perhaps there are a few stones in the past you should turn up to seek the truth and the reality of QE and what has been said about it in the past.

There IS no QE 3