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Confirmed: US Gov officials bracing for S&P downgrade as soon as today.

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Jaskalas said:
Conservatives in this nation are demanding cuts to the government. We wanted the Paul Ryan plan. We wanted a balanced budget amendment. Democrats attacked these measures and fought back for their raiding and pillaging of our public treasury.
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Psst, the Ryan Plan was and is bullshit smoke and mirrors too. Neither party, to my knowledge, has produced a plan that actually takes necessary steps to reduce our deficit in any meaningful way. A bunch of assholes put shit out that claims to cut this much or that much but if you actually read the plans instead of just the first page or the headlines you will see that it is simply smoke and mirrors.

Its kind of like the left being all pissed off that the debt ceiling deal cuts SOOOO much and how its going to doom us with draconian austerity. It does no such thing and makes no significant cuts, that is a big reason as to why we got downgraded. All of that bickering and fighting and at the end of the day nothing was accomplished. The Tea Party did not win, no real concessions were made no real spending cuts to speak of and no viable plan of addressing our deficit going forward. If it took that much fighting and political theater to accomplish virtually nothing then it is highly unlikely that any true accomplishments will be made. The Republicans are just as guilty as the Democrats on this one and anyone with an objective view (IE not a partisan hack) knows that.

I highly recommend that you actually read and digest the Ryan plan before you advocate it as it does not do what you think it does.
 
from where I'm sitting, it's bipartisan fuckery.

in November 2010, we all saw the kind of fiscal extremists that just got elected to Congress... given that Obama hasn't had a single confrontation with the GOP that he hasn't backed down from, the Democratic leadership should have pushed for a clean debt ceiling bill while they still had control of Congress, instead of kicking the can down the road for nakedly political reasons and giving the GOP the ammunition to hold the country hostage.

with that crisis preemptively diffused, Obama would have then been in a position to veto any bill that didn't contain, at a minimum, revenue increases via tax reform (if not outright tax increases)
 
wuliheron said:
The Tea Party has offered nothing more then the usual promises inflated to absurd proportions and all they've accomplished is to piss off 80% of the population, increase the deficit, reduce our credit rating, crash the stock market, and possibly started another great depression. They haven't got a hope in hell of passing a balanced budget amendment, but it makes for good theater as they run the economy into the dirt. When they get kicked out of office or lynched perhaps you'll learn to appreciate the fact that panicking in the middle of a crisis, ranting and raving, and making absurd demands is not productive.
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You didn't read the S&P report either huh. Nor did you read beyond the headlines of the so called spending cuts nor do you know much about the stock market. Hell, with the exception of the first 15 words or so I don't think anything you just posted is accurate.


You partisan hacks, and I am talking about BOTH sides, are what is wrong with this country and why we are wild and truly fucked. We can't have an honest discussion about how to actually fix things because your two clubs care about nothing other than throwing shit at the other side. It is nothing more than misdirection and you (along with a fuckton of others) have fallen for it hook line and sinker. Good job.
 
loki8481 said:
from where I'm sitting, it's bipartisan fuckery.

in November 2010, we all saw the kind of fiscal extremists that just got elected to Congress... given that Obama hasn't had a single confrontation with the GOP that he hasn't backed down from, the Democratic leadership should have pushed for a clean debt ceiling bill while they still had control of Congress, instead of kicking the can down the road for nakedly political reasons and giving the GOP the ammunition to hold the country hostage.

with that crisis preemptively diffused, Obama would have then been in a position to veto any bill that didn't contain, at a minimum, revenue increases via tax reform (if not outright tax increases)
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And we would have still gotten downgraded...
 
It's insane that people are pinning this on the Republicans when Obama's position was that he wanted a clean debt ceiling increase with no cuts or tax increases.
 
Darwin333 said:
You partisan hacks, and I am talking about BOTH sides, are what is wrong with this country and why we are wild and truly fucked. We can't have an honest discussion about how to actually fix things because your two clubs care about nothing other than throwing shit at the other side. It is nothing more than misdirection and you (along with a fuckton of others) have fallen for it hook line and sinker. Good job.
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Partisans do care deeply about fixing things in the country, they just believe nothing can be fixed until disagreeing opinions are eliminated. The problem is that disagreeing opinions WILL NEVER be eliminated. And that's why partisanship will always fail.
 
wuliheron said:
Fail. The democrats aren't angels either, but at least they aren't holding the overwhelming majority of the population and the republican party hostage!
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BS.

If the Democrat had gotten what they wanted we still would have had a reduction.

S&P wanted $4 trillion in debt reduction and the Democrats wanted a 'clean bill.'

The only reason we got to $2 trillion is due to the Tea Party fighting tooth and nail for it.
 
ProfJohn said:
BS.

If the Democrat had gotten what they wanted we still would have had a reduction.

S&P wanted $4 trillion in debt reduction and the Democrats wanted a 'clean bill.'

The only reason we got to $2 trillion is due to the Tea Party fighting tooth and nail for it.
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How can we put any faith in a rating agency that gave a triple A rating to the worthless credit default swaps?
 
Ausm said:
How can we put any faith in a rating agency that gave a triple A rating to the worthless credit default swaps?
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We shouldn't really, at least I don't. But then again Moodys and Fich are rating the US at AAA and they also rated credit default swaps at AAA. So we shouldn't trust their rating of the US at AAA either.

If anything AA+ is probably higher than it should be.
 
ProfJohn said:
BS.

If the Democrat had gotten what they wanted we still would have had a reduction.

S&P wanted $4 trillion in debt reduction and the Democrats wanted a 'clean bill.'

The only reason we got to $2 trillion is due to the Tea Party fighting tooth and nail for it.
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Bullshit. Obama wanted the 4T and Boehner walked.
 
I'm, kind of surprised there hasn't been a thread started here about the two trillion dollar mistake S&P did in calculating the deficit. But I guess they are infalible-after all, they did so good with the AAA mortgage backed securities, Enron, etc.

I wonder how many millions of dollars S&P stands to make if the world switches to some other currency as it's base, rather than the US dollar. But I'm sure that thought never crossed their minds when making this downgrade.

Personally I'd much rather see US address and fix the recession first, then worry about making our creditors happier.
 
PeshakJang said:
Yeah, it's been talked about, and maybe a little bit of pricing has gone in, but nobody actually believed it would happen.... like I said... especially after the other agencies reaffirmed. The stock market in particular hasn't really priced it in, since the 200+ point drop yesterday was on rumors of it happening, which people quickly disregarded.

2-year is at record low yields, that's not indicative of pricing a AA+.

But hey, like I said, we'll see on Monday. It's hard to tell for sure due to the general flight from risk markets the last couple weeks... treasuries will of course still be in demand, but how many institutions are going to start looking overseas now instead?

As a side note, my State is now rated higher than the US government 😎
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Again, I don't know what "bond desk" you are on but this has been priced into the rates community. There are many metrics to look at:

1.) ASW tightening to sovereign is a good measure of if a credit is being downgraded there is a lack of bid. ASW spreads have widened.
2.) swaption vols have not moved out considerably when compared to the EU downgrades, although obviously gamma was up based on the moves in the complex and the servicers had vol to buy (they appeared to setup for a last hoorah in mortgage rates on the last move down to 4.0&#37😉 but we saw gammas only move 6 abpv
3.) Have you read any trading commentary in the last three months or looked at the trades from some of the bigger buy side MF's and pensions?
4.) The CDS curves really only leave a few high end AAA's at this point in the whole world (Norway/Sweden/Canada/Australia/Hong Kong(?)) and nothing deep enough to accept TSY type money. Look at where FR/DE/DK/UK etc trade CDS wise compared to Norway for instance with spreads of 50-80 bps. Norway paper is among the safest with the dual surpluses and it shows.
5.) Rates have moved up where the market actually sees credit risk. i.e. France starting to trade worse but JGB/GILTS (Which will be AA+)/Bunds (How much of the EFSF will .de be on the hook for?) and TSY's all trading nicely even before the market started thinking the global recession was here. JGB's obviously not AAA, Gilt's not really considered AAA by the market anymore and Bunds seen as the safest in Europe however look at Europe. Germany is the one eyed man in the land of the blind...
6.) Fitch easiest, moody's middle, S & P hardest for ratings. Seemed this would be pretty fair to see S & P downgrading.

Just for my own mind, what is a bond desk, is this a new one size fits all for small traders or are you at a small firm? There is a rates desk, a credit desk, a mortgage desk, a repo desk, a structured desk, a munis and an exotics desk, wtf is a bond desk? I have never dealt with general bond desk, trades always go to their respected department. I can't even imagine the P & L challenges for a small desk that is attempting to make a market in all kinds of bonds...my guess is obviously the buy sider is taking it in the shorts on this one.
 
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the DRIZZLE said:
It's insane that people are pinning this on the Republicans when Obama's position was that he wanted a clean debt ceiling increase with no cuts or tax increases.
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Liberalism is a mental disorder so you are spot on calling it insane..this is the obama economy. His finger prints are all over it.
 
senseamp said:
Geitner assumed we'd have sane leadership in Washington. There was "no risk" of it until GOP created it. Republicans should all resign.
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Why would you ever assume people in Washington are sane?

He said it 3-4 months ago as well anyway.

Turbo Tax Timmy should step down, along with anyone who voted for or signed any spending bills in the last decade.
 
Don't worry though...

The U.S., which was cut yesterday to AA+ from AAA at S&P, merits a “quadruple A” rating, Buffett, 80, said in an interview with Betty Liu at Bloomberg Television.
 
matt0611 said:
Why would you ever assume people in Washington are sane?

He said it 3-4 months ago as well anyway.

Turbo Tax Timmy should step down, along with anyone who voted for or signed any spending bills in the last decade.
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Only way to get things done would be for a new slate. People can still vote D/R if they want but they just can't vote for any incumbent.

Full slate like when the Board screws something up that can no longer be rectified, that is congress/senate of the last 20 years.

Having said that there has become so much hate between the parties which is evident on this board, nothing will be accomplished until people move back to the middle and realize there is a compromise that needs to be done for the long term of this country. Unfortunately two of those things are going to be SS/Medicare and it is hard to tell people we simply can't pay you for the things you were promised. I for one think a downgrade is good for the country as this country desperately needs a wake up call and hint more tax cuts or ultra high tax rates to support entitlements are both not the answers.
 
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The-Noid said:
Don't worry though...

The U.S., which was cut yesterday to AA+ from AAA at S&P, merits a “quadruple A” rating, Buffett, 80, said in an interview with Betty Liu at Bloomberg Television.
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Pft, no surprise, Buffett is nothing but a government / establishment shill nowadays.
 
senseamp said:
Geitner assumed we'd have sane leadership in Washington. There was "no risk" of it until GOP created it. Republicans should all resign.
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Which is what the head of S&P ratings agency pointed out in a very recent interview-

John Chambers, the head of sovereign ratings at S&P, told CNN’s Anderson Cooper that the political brinkmanship over the debt ceiling proved to be a key issue, with “the U.S. government getting to the last day before they had cash-management problems.”
...
Asked who was to blame, Chambers said, “This is a problem that’s been a long time in the making—well over this administration, the prior administration.”

Congress should shoulder some of the blame, he said. “The first thing it could have done is to have raised the debt ceiling in a timely manner so that much of this debate had been avoided to begin with, as it had done 60 or 70 times since 1960 without that much debate.”

Chambers added that his agency’s decision is likely to have a long-term impact. “Once you lose your AAA, it doesn’t usually bounce back,” he said.

He pointed to the decision by Congress about whether to extend the 2001 and 2003 tax cuts as one crucial area. “If you let them lapse for the high-income earners, that could give you another $950 billion,” he said.
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http://www.cnn.com/2011/BUSINESS/08/05/global.economy.cnn/

In other words, the contrived crisis Republicans created is a big part of the reason for the downgrade. S&P sees lunatics with too much power in Washington.

If anybody has any doubt as to who brought this fracas to a head, llisten to Mitch McConnell-

I think some of our members may have thought the default issue was a hostage you might take a chance at shooting. Most of us didn't think that. What we did learn is this — it's a hostage that's worth ransoming. And it focuses the Congress on something that must be done.
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http://www.washingtonpost.com/polit...washington/2011/08/02/gIQARSFfqI_story_1.html

Republicans will, of course, Blame Obama!
 
Doppel said:
Whatever his assumptions he was wrong.
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No question that assuming that Republicans will act in a responsible way is wrong. But those same Republicans have no business calling for him to resign over the mess that they themselves created.
 
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