Standard & Poor's Rating; Yea or Nay?

[sactoking]

S&P has no credibility as a ratings organization after the subprime meltdown that they contributed to.

 

[WelshBloke]

S&P was humiliated during the latest financial meltdown, this is their way of trying to "makeup" for it. The US has a debt problem, but if the US gets cut, then several others that have massive GDP to debt ratios need to get slapped as well.

Its not like you are the only country with a lower than AAA rating, they are pretty rare ATM.

http://www.standardandpoors.com/rat...list/en/us/?subSectorCode=39&start=0&range=50

 

[quest55720]

They are right. Washington does not have the stomach to really tackle the defit problems. Won't be long before we are at 25 trillion in the hole thanks to the idiots in washington on both sides. Maybe the american people will smarten up and vote people in who will pass a real balanced budget amendment with no loop holes. That is the only thing that would fix the problem.

 

[sunzt]

Oh, so now voters in the US should vote for politicians based on what people elsewhere think? Or vote for policies based on what people elsewhere think? Absolutely not. We are sovereign, that means we decide what's best for us, not the other people, no matter how many there are.

Yes, cause that's exactly what I said.

The leaders of our country in modern times needs to take account for how their decisions affect the nation, but also relations with other nations. There is this thing called "D-i-p-l-o-m-a-c-y". This is not just limited to political ramifications, but also economic since we are in a global economy. Sure, we can tariff the living crap out of every country in the world, but once you consider its ramifications from other nations then you realize it's not beneficial.

It's not that one should vote based solely on what x country thinks. Its that we live in a time where the interest of our country is very much tied to the fates and success/failures of other countries. So to just ignore how a leader would act with regards to those countries and to consider how they would respond would be totally ignorant. For example, some people prefer we build better relations with countries x,y,z and distance ourselves from a,b,c. It is purely valid for someone to consider a leader's stance and acts on certain nations and how they would respond when voting.

 

[WelshBloke]

The real reason US bond's should stay AAA.... we own the printing presses. Wrong or right to do so isn't the issue at hand, simply that we MAKE the money and the Fed would print more money before defaulting on the bonds.

Umm, isn't the danger of that one of the reasons for the downgrade? I thought the ratings were to protect and inform lenders, if you just print money doesn't it devalue their investment?

 

[PingviN]

Gonna have to stick with bacon on this one.

 

[theeedude]

The markets are saying loud and clear, S&P downgrade is BALONEY. Interest rates on US treasuries are DROPPING after S&P says they are HIGHER RISK. That's all you need to know.

 

[bradley]

Like when they rated ENRON with a AAA?

AIG is the most prominent recent example. Several large corporate bond funds, mortgages etc. went from AAA to junk status seemingly overnight thanks to these ratings agencies. They would even term these transactions triple-A junk.

So, what makes Moody's/Fitch/S&P suddenly so credible while still lacking any oversight, accounting, or transparency is anyone's guess.

 

[Fern]

Clearly S&P is right, and this downgrade should actually have happened years ago. Obummer and the left are launching a big smear campaign now against the messenger, which is even more reason to believe the message is true.

The US has gotten itself in a situation where there is no realistic way of getting back to any semblance of a balanced budget for decades. How anyone can consider that AAA rated is beyond me.

I agree, but think most Republicans are also reluctant to cut spending to necessary levels. Congress just can't resist it's impulse to hand out 'federal candy'.

And the Obama admin's attempt to strong arm S&P is deplorable. We all know we're looking at +trillion $'s deficits for some years. IMO, if Obama is reeleceted we'll see $20T deficit before his 2nd term ends, assuming people will still buy our bonds.

Fern

 

[Macamus Prime]

Meanwhile, China — the world's second largest economy — is rated two notches below the United States, at AA-.

http://finance.yahoo.com/loans/article/113290/triple-a-debt-club-countries

 

[Macamus Prime]

And now,... the SEC is investigating S&P's rating: http://finance.yahoo.com/news/SEC-i...51.html?x=0&sec=topStories&pos=1&asset=&ccode=

The U.S. Securities and Exchange Commission (SEC) has asked rating agency Standard & Poor's (S&P) to disclose which employees knew of its decision to downgrade U.S. debt before it was announced last week, the Financial Times said, citing people familiar with the matter.

Let me guess, lapdogs, you consider this as a communist / big gubnament move on good old fashioned capitalism, right?

Yap, yap, yap, yap, yap.

Hedging bets against your own economy's well being, to make a quick FAT buck. Which is what this entire week turned out to be for those with liquid cash and a "considerable presence" in the stock market. Yet, they won't bother to create jobs with their blood soaked winnings.

Filth.

/spit

 

[Ausm]

Like when they rated ENRON with a AAA?

Or when the gave a triple A+ rating to credit default swaps?

 

[Rebel44]

I dont trust S&P, but I also dont think that USA deserve AAA rating.

From investor perspective, right now I wouldnt buy US 2+ years bonds unless they have at least 5% interest

 

[Macamus Prime]

Or when the gave a triple A+ rating to credit default swaps?

HEY!

We all know the problem with that was the lazy Americans who refused to pay their bills!!

And, who are they to think they can pay $300,000 mortgage on a $25,000 salary?!

Are they some sort of financial lending institution that does an adequate credit report check to ensure the money they are lending WILL get paid back?!

Are they lending professionals, who ensure the money they lend out WILL be paid back and aren't lending it JUST to get the commission?!

Are they professional investment managers and investment product developers who look at the legitimacy of the investment vehicle to ensure it is of a sound state, and not built on something that no hope of ever gaining value?!

Are they the same professional investment managers who sold this product to people and institutions looking for stability and assured growth?!

Are they professional investment firms who clearly understand the implications of selling something that has a legitimate and sound foundation, to ensure their well being, existence and reputation goes un harmed?!

Are they former professional investment managers who have gained government positions, in order to ensure their past buddies get the biggest and best chunk of bail out cash - while competitors go under?!?

No.

They are not.

So, therefore, the dead beat mortgage payment dodgers are at fault for all of this!!

Leave TEH SnPz alone!!!shift+1!!!!

Oh, and of course the government is at fault – the Obama administration. Not the Bush admin when all of this boiled, bubbled and burst.

 

[sactoking]

Umm, isn't the danger of that one of the reasons for the downgrade? I thought the ratings were to protect and inform lenders, if you just print money doesn't it devalue their investment?

IIRC the value of the investment isn't supposed to be considered in the sovereign debt rating. The debt rating is supposed to consider only the country's ability/likelihood to repay.

 

[WelshBloke]

IIRC the value of the investment isn't supposed to be considered in the sovereign debt rating. The debt rating is supposed to consider only the country's ability/likelihood to repay.

Yeah you could well be right, high finance is all a bit cryptic to me.

I did think the part of their function was to help assess what was a fair price to charge for debt.