POZ Community Forums
Off Topic Forums => Off Topic Forum => Topic started by: WillyWump on August 05, 2011, 10:24:17 pm
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Your Treasury Securities are now rated higher than the US's.
Way to go US.
US government loses triple-A credit rating
http://www.msnbc.msn.com/id/44040574/ns/business-stocks_and_economy/
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Your Treasury Securities are now rated higher than the US's.
Way to go US.
US government loses triple-A credit rating
http://www.msnbc.msn.com/id/44040574/ns/business-stocks_and_economy/
Not that these ratings organizations have such a great track record. Remember all those CDOs for mortgage-backed securities that they rated at AAA back before the 2008 crash? ::) Not only were these not AAA, they were junk. Just ask poor Iceland that invested in so many of them that it basically bankrupted their country.
So the downgrade matters. But not for the right underlying reason, but more because of appearance. The credit rating agencies are a lot more like movie critics than they care to admit: there's a significant amount of subjectivity to their opinions, but unfortunately their opinions matter because people listen to them rather than forming their own opinion.
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Not that these ratings organizations have such a great track record. Remember all those CDOs for mortgage-backed securities that they rated at AAA back before the 2008 crash? ::) Not only were these not AAA, they were junk. Just ask poor Iceland that invested in so many of them that it basically bankrupted their country.
So the downgrade matters. But not for the right underlying reason, but more because of appearance. The credit rating agencies are a lot more like movie critics than they care to admit: there's a significant amount of subjectivity to their opinions, but unfortunately their opinions matter because people listen to them rather than forming their own opinion.
^^ This.
The downgrade will increase the interest the .gov has to pay on bonds. It will also make it harder for US banks to borrow money themselves which could (will?) lead to a credit squeeze.
And a credit squeeze is bad.
MtD
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The downgrade will increase the interest the .gov has to pay on bonds. It will also make it harder for US banks to borrow money themselves which could (will?) lead to a credit squeeze.
The downgrade itself does not increase borrowing costs (interest rates) for the government. Markets set borrowing costs. The downgrade may cause markets to sell US treasury securities and thus increase interest rates -- but that remains to be seen on how the market reacts over the next days and weeks.
Higher interest rates make it harder for everyone to borrow money, includes banks. US bank reserves are at an all time high, and they have plenty of their own reserves to tap if needed. But banks aren't lending out all that money that was pumped into them during the bailout. They're just letting it sit in the Federal Reserve and accrue interest.
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The downgrade itself does not increase borrowing costs (interest rates) for the government. Markets set borrowing costs. The downgrade may cause markets to sell US treasury securities and thus increase interest rates -- but that remains to be seen on how the market reacts over the next days and weeks.
Higher interest rates make it harder for everyone to borrow money, includes banks. US bank reserves are at an all time high, and they have plenty of their own reserves to tap if needed. But banks aren't lending out all that money that was pumped into them during the bailout. They're just letting it sit in the Federal Reserve and accrue interest.
Really? Interesting. A downgrade of credit ratings certainly increases the cost of borrowing for Australian governments (state and federal) as a matter of course.
MtD
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Really. It's not the downgrade, but that market's reaction that determines where interest rates go. Will they rise? Likely, but it's not clear if the rise will be significant. Honestly, I don't know why they haven't risen already given how much money the US has been printing -- that's what really baffles me.
Ironically, this would just earn the banks more on their excess reserves that they are sitting on, while making it even harder for the few borrowers that banks are actually lending to.
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Really. It's not the downgrade, but that market's reaction that determines where interest rates go. Will they rise? Likely, but it's not clear if the rise will be significant. Honestly, I don't know why they haven't risen already given how much money the US has been printing -- that's what really baffles me.
Yeah, I appreciate the distinction but in practical terms it's just two ends of the same street. Credit agencies shit the bed, borrowing costs for their lovers go up.
The .gov.au's live in terror of the Agencies. Fortunately we have all those rocks we sell to the godless Red Chinese to underwrite our socialist excesses.
Of course if China's economy goes tits up, we're fucked.
Ironically, this would just earn the banks more on their excess reserves that they are sitting on, while making it even harder for the few borrowers that banks are actually lending to.
As we say down here, Banks Are Bastards. :)
MtD
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Your Treasury Securities are now rated higher than the US's.
Way to go US.
US government loses triple-A credit rating
http://www.msnbc.msn.com/id/44040574/ns/business-stocks_and_economy/
Mebbe you should say "way to go teabaggers".
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The .gov.au's live in terror of the Agencies. Fortunately we have all those rocks we sell to the godless Red Chinese to underwrite our socialist excesses.
The US Congress should live in fear of the credit ratings agencies, but they are too busy giving blow jobs to businesses, while screwing poor people.
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The US Congress should live in fear of the credit ratings agencies, but they are too busy giving blow jobs to businesses, while screwing poor people.
Oh no doubt. We have a variation on that particular theme down here. The .gov.au is in the process of implementing a price on carbon as well as a mining tax reform and the top hatted, cigar smoking silvertails of the mining industry who are worth obscene billions are screeching like they're gonna be boiled in oil.
And the average fucking idiot voter is being taken in by it all because our conservatives have been drinking US Republican Brand Tea.
I agree with you completely about those fucking credit agencies. Why anyone takes notice of them after the Catastrophuck of 2008 is a mystery to me.
But take notice of them, they do.
MtD
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And the average fucking idiot voter is being taken in by it all because our conservatives have been drinking US Republican Brand Tea.
mmmm, republican tea, steeped in the hopes and dreams of the common man, with a touch of Jesus to make it a little sweeter.
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...
because our conservatives have been drinking US Republican Brand Tea.
...
I knew the falling dollar would increase US exports. ;) How unfortunate that it includes our Tea Party clowns. I think their whole outlook is "more for me, and I don't give a fuck about anyone else". Lovely way to build a community.
[edited for spelling only]
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Actually yall are all getting wound up over nothing...Governor Perry is attending a Houston Prayer Rally to "Pray away the Malaise" in order to correct the US economy.
Everything should be peaches and roses in no time... ;D
http://www.ksat.com/politics/28783309/detail.html
But then again, he has "prayed" Texas into the worst drought ever :-\
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Actually yall are all getting wound up over nothing...Governor Perry is attending a Houston Prayer Rally to "Pray away the Malaise" in order to correct the US economy.
Everything should be peaches and roses in no time... ;D
http://www.ksat.com/politics/28783309/detail.html
But then again, he has "prayed" Texas into the worst drought ever :-\
Ya know I'm totally pissed off, I spent countless years and god knows how much money working getting a masters degree in public admin and not once was there a class on "praying away" a policy. All those policy analysis papers I had to write and I could have just called up his holy ghost to solve it!
AND I went to a Catholic University, ba jeebus.
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How could this downgrade be anything other than another step in the master conspiracy to transfer more wealth to the uber rich?
The people who are supposedly going to take this downgrade seriously are informed enough to know of the CDO swindle. Giving value to the wisdom of the rating agencies is complete hypocrisy.
Whats too perfect and more or less the only appropriate response is the Chinese finger wagging. The US and China are best frenemies.
Well, we can hope its Bachmann versus Obama cause I doubt she's electable. Maybe Obama can get a congress back and the dems can all recuperate their balls and get some tax revenue.
Heard a good idea on some talk show this week, some outgoing Obama economic advisor. Who said there should be a PRIVATE fund for stimulus via infrastructure investments, that would somehow make the banks some money and still pour billions into the economy.
I really don't mind the rich being uber rich but don't we want wealth circulating and bubbling up through everyone else before it gets to the rich?
Some god awful Republican was shown on TV this week stating that Affordable Care had to be the next target, had to be repealed.
How on earth can this be the US heading quickly to banana republic territory instead of joining the ranks of rich nations that offer a reasonably comfortable life? Its all so Soylent Green to me.
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Let them eat cake!!
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I'm scared that now that we've lost our AAA rating Sharia law will be enforced.
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I'm scared that now that we've lost our AAA rating Sharia law will be enforced.
I'm sure you can find a designer vintage burqa (aka beekeeper suit) that will sufice.
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I'm scared that now that we've lost our AAA rating Sharia law will be enforced.
Ya, me too, my burqa's at the cleaners.
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I wouldn't mind one of those white linen Egyptian night shirt looking things all of the men wear. I have two night shirts that I routinely lounge in, but they're mere creations from Brooks Bros.
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This place has some nice galabiyya:
http://www.shukronline.com/mg3101.html (http://www.shukronline.com/mg3101.html)
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The concept is more interesting than the reality.
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ruh roh
France might be losing AAA rating too (http://www.guardian.co.uk/business/2011/aug/10/debt-crisis-shares-slump-france)
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Going back to my original discourse with The Damned One, the US Treasury auctioned $24 billion of 10-year notes at a rate of 2.14% -- the lowest rate on record for 10-year notes. It is the second day in a row, since S&P lowered the US credit rating to AA+ from AAA, that the US Treasury has been able to borrow at record low rates. ???
http://www.cnbc.com/id/44095971 (http://www.cnbc.com/id/44095971)
So much for a lower credit rating making it more expensive for the US to borrow -- it doesn't seemed to have worried investors looking for safety in a turbulent market. Of course, it may not have really had time to sink in with investors, and it's probably the lowering of the US credit rating that created -- or at least exacerbated -- the turbulence.
The bad news? Deflation may rear it's ugly head again.
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the turbulence.
I keep expecting the oxygen mask to drop down into my lap at any second.
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I keep expecting the oxygen mask to drop down into my lap at any second.
As a friend of mine always used to joke:
Please fasten your seat belts, and return your flight attendant to the upright and locked position. :P
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Also its made for a week of sucky and repetitive late night monologues.
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Also its made for a week of sucky and repetitive late night monologues.
Oh well, sorry about the losses in so many people's retirement accounts is impacting your entertainment. ::)
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quasi-zombi of me, I know... but alas, France just lost their AAA credit rating :)
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(http://i1018.photobucket.com/albums/af308/IwuvPhilly/elmore9.gif)
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Wow... and it's not just France either
Standard & Poor’s cuts credit ratings for France and eight other European nations (http://www.washingtonpost.com/business/economy/france-loses-aaa-in-euro-downgrade/2012/01/13/gIQAxALzwP_story.html?hpid=z1)
Financial markets will be a mess on Monday...
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Poor Sarkozy.
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Could someone please explain how American, French, English, German and Swiss banks made all these bad loans and yet its the 2nd tier economies and their ordinary citizens that will suffer the junk ratings now? Clever clever bankers and governments..... If the G8 ends up with AA instead of AAA, but the midlings all fall, isn't that the status quo? France deserved the hit.
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Ummmm those 2nd tier economies played their part too. All the blame on the bankers has gotten old now.
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Of course they did. I agree. Especially banks in midlings. Ireland could have let the banks and bondholders suffer the losses but they passed it all unto the taxpayers. One assumes the banks weren't allowed to go under because Big Euro Banks German, Belgium, France or English banks weren't going to allow that.
I dont know the details, true, but I want to see the major bankers get HIT because of the financial crises their phoney wealth creation wrought. I don't think it is "old" as this crisis very much continues...
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In Ecuador, it is forbidden by Constitution that the State finance the bank in the case of a crisis (in 1999 the country had a very bad time because of an abusive management form the private banks and people paid it with inflation and loosing its deposits). It is forbidden to use public debt for funding banks. There is an obligation to have garantee for more than 100% (120 to 140% in some cases) when the banks borrow money or made some investisments. Also, the banks must by law keep an important part of their deposit inside the country... Don´t worry, they still earn money (they never earn so much since Correa is President) ; despite the visit of Ahmadineyad in this country and despite of that kind of rules...
Well, banks would be more prudent in UE and USA if they had to follow these kind of solution; in another way, if the state gives them the money they want when things are wrong, why should they be carrefully??? Till a big change in regulation is not done, poeple will pay and pay, bankers and traders will receive exagerated incomes and next generation will pay.... (how?)
I won´t tell you what I think about our dirigent in UE, but I don´t think well !!!!