Every Major Credit Agency Prepares to Downgrade U.S.

http://prospect.org/csnc/blogs/tapped_archive?month=07&year=2011&base_name=every_major_credit_agency_prep

Every Major Credit Agency Prepares to Downgrade U.S.
By Patrick Caldwell | Posted 07/18/2011 at 03:30 PM


Just in case Moody's and S&P didn't frighten you enough, Fitch credit agency has added itself to the list of groups planning to downgrade the United State's triple-A rating if the debt ceiling is not raised by August 2. Per The Hill:



Despite warnings, a segment of Republican politicians insist no harm will come if August 2 goes without raising the debt ceiling. Serious presidential contender Michele Bachmann used her first campaign ad to promise that she will not vote to raise the debt ceiling. Bond markets remain stable, but the deadline to reach a deal is fast approaching. On Friday, Ezra Klein detailed how the Treasury Department defaulting on its obligations would trickle down to the rest of the country. If the U.S. loses its triple-A rating, interest on Treasury notes will rise. "Mortgages rates will jump, car loans will be harder to come by, universities won’t be able to float bonds, cities won’t be able to fund themselves," Ezra wrote. The Republicans who believe a temporary default is without consequences are in for a rude awakening if Fitch, Moody's, and S&P are forced to follow through on their word.

That they are positioned to make a killing, thats when they will all act in unison.

Everyone now knows what his motivations are for seeing a default on Aug. 2.

at the thought of all that money he can make off of his short positions on the dollar.

more are in Cantor's same game wanting the nation to fail for a personal profit?

http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

When people find out the he made a killing by trashing the USA he's going to need lots of protection.

Are they going to quit buying bonds, or are they going to listen to the bozos that gave AAA rating to junk mutual funds these same ratings agencies said were AAA?

and stop any recovery we still had?

There are days.

I was just pointing out that these are the same rating agencies that called detritus AAA securities when they were clearly junk. It's rather ludicrous that anyone, banks included, trust them to set interest rates. Of course, the banks profited from the entire credit default swap circus, so naturally, to them they were AAA securities - they just weren't to ordinary investors or the taxpayers.

Instead, he made them stronger.

Key Provisions in the Act Regarding Credit Rating Agencies.

The Act significantly increases the regulation of NRSROs in an attempt to avert further adverse consequences of the mortgage-backed securities crisis that led to the economic crisis and recognize the value of transparent and reliable ratings in the financial system. The major components of the regulation are

(1) the creation of a new "Office of Credit Ratings" at the SEC to oversee NRSROs and enforce the rules and regulations concerning NRSROs,

(2) the creation of new disclosure requirements that attempt to make ratings and the process of determining ratings more transparent to the public and users of the ratings

(3) provisions that require the implementation of internal controls in the formulation of ratings by NRSROs,

(4) provisions that address conflicts of interest inherent in the current business model of NRSROs, and

(5) provisions that make it easier for plaintiffs to sue credit rating agencies in certain circumstances. The following paragraphs summarize the key provisions and requirements of the Act relating to NRSROs.

http://www.duanemorris.com/alerts/credit_rating_agencies_3768.html

a segment of Republican politicians insist no harm will come if August 2

A large segment of the democratic base thinks all this is scare mongering too. While some of it is the case, there will be great damage.

Folks, it could range form just much higher interest rates to a rank depression.

Enjoy.

Gold is up to 1605
silver up to 40.25

Treasuries are NOT selling, so their interest rate went up.

That is bad news, treasuries not selling, instead investors are buying metal.
Bad indeed.
Usually when stocks get hit, people buy bonds.
but now they do not trust debt ( which is what bonds are).

Only way to attract buyers of Treasuries ( our debt) is to raise rates.

Obama either does not give them what they want, or not enough to make them happy, and the GOP lets defualt happen? Is there anything that could be done to force the GOP to agree?

like the proverbial walk in the park... let's worst this absolutely worst case it.

IMF gets involved with the proverbial "rescue package"

You will see things privatized as far as the eye can see.

Government workers will be furloughed\ fired, cut their salaries, you mention it. Not good.

Subsidies... while some of them should go away, blunt instruments are not good.

Poverty will go up.

Depression comes to mind.

In the us well we are no longer a reserve currency and a hard landing for the Empire... I much prefer a soft landing.

That is absolute worst case... short of it... people will starve.

We don't need no fucking furriners to boss us around. We're speshul. And besides, God is on our side.

:sarcasm:

this might be a de facto debt ceiling as investors no longer wish to buy American debt.

The fact that we're actually debating whether or not to extend the debt ceiling... that we're talking about defaulting... they'd be crazy not to downgrade us and they totally should.

There should be some real consequences of this political gamesmanship.