S&P: Republicans Almost Entirely To Blame For Downgrade?

[theyounghistorian77]

Even though there is blame to go around on this on both sides for this, it is still my opinion the Republicans with their artificial debt-limit ceiling crisis and they way they have acted in Congress deserve more of it. But nonetheless im sure the GOP finger-pointing games at the democrats will now commence, oh wait they already have

 

[televator]

I'm guessing the whole thing about not paying the FAA and not collecting airline tax didn't inspire confidence either. Pretty much any agency outside of defense is hurting and it makes us look like we're running a third world operation now.

I'm glad that they specified the revenue issue in the reasoning. Progressives pretty much made this a point, but the Dems were too busy letting the republicans walk all over them.

I hope Obama is enjoying this fresh made shit sandwich.

 

[ArthurWilborn]

http://www.ft.com/intl/cms/af2c4fac-bfc2-11e0-90d5-00144feabdc0.pdf

The primary concern cited is "progress containing the growth in public spending, especially on entitlements".

Spending on entitlements has risen sharply in the past three years.

Essentially, the downgrade was because the government couldn't agree on spending cuts fast enough. Raising revenue was also mentioned as a concern, but clearly a secondary one.

 

[ImprobableJoe]

S&P is a fucking fraud, just like the Republicans. They were going to do this no matter what deal was struck.

Spending cuts during a recession is stupid and wrong anyways. We need tax increases, and we need them NOW. Anyone who says different is an idiot... or is planning on profiting from the coming depression that they helped cause.

 

[Dean]

I often see a lot of hypocrisy in the Republicans these days, what with their pontificating about so-called "free markets", and the somewhat reactionary attitude their most extreme conservatives seem to have towards government... :|

 

[kenandkids]

The teapublicans are lying, conniving, pieces of crap. Constant complaints of entitlements ring through the air, yet the overwhelming number and amounts of entitlements are given to millionaires and billionaires. Their insistence that only poor people suffer losses is entirely to blame for this recent debacle.

 

[kenandkids]

 

[Arcus]

"S&P is a fucking fraud"
Any evidence of this claim? I work as a sr credit analyst, though for trade and not debt credit, and I occasionally talk to the agency raters. They tend to be highly knowledgeable and of high integrity, their only aim is to be as accurate as possible. How many years of experience in a relevant field has led you to your conclusion that S&P is 'a fraud'?

 

[ImprobableJoe]

"S&P is a fucking fraud"
Any evidence of this claim? I work as a sr credit analyst, though for trade and not debt credit, and I occasionally talk to the agency raters. They tend to be highly knowledgeable and of high integrity, their only aim is to be as accurate as possible. How many years of experience in a relevant field has led you to your conclusion that S&P is 'a fraud'?

You're so ADORABLE!!

Here'sa clue for you:

*It was S&P that had Lehman Brothers rated AAA just a month before they went bankrupt.

*It was S&P that rated AIG's credit default swaps as rock solid investments

*It was S&P that admitted to making a $2 trillion accounting error (remember, playing with numbers is their core business and reason for being) in advance of the downgrade of U.S. debt.

*A downgrade in U.S. debt means functionally that U.S. treasury bills are, in S&P's oh-so-wise opinion, less trustworthy and a greater credit risk to investors. This comes only a day after investors fled the DOW and S&P500 into the safe and waiting hands of"¦you guessed it: U.S. treasuries. The same treasuries that S&P suddenly finds a more dangerous buy. So what does that say about the stock market, and the S&P500? Perhaps S&P might wish to re-evaluate the credibility of its own market index.

*None of the other ratings agencies are taking the drastic step that S&P has. S&P is all alone in their move to downgrade U.S. credit.

When all is said and done, U.S. treasuries are still the safest investment in the world, and it would take either an idiot or someone with a strong political agenda to contend otherwise.

They're a fraud, either intentionally manipulating the situation for political gain, or claiming to be WAY more competent than they are. Then again, most of the financial world are a bunch of dishonest bullshitters who make themselves wealthy whether their predictions are right or wrong in the long term... and recently, made MORE money by steering investors wrong than by making accurate predictions, and then betting against their clients.

 

[Arcus]

You neither know how credit rating works, or anything about finance, or economics in general. Your opinion on the matter is thus inconsequential.

 

[ImprobableJoe]

You neither know how credit rating works, or anything about finance, or economics in general. Your opinion on the matter is thus inconsequential.

Wow, that was such a strong presentation of evidence that clearly, you're full of sour owl poop.

Is this a formal logical fallacy? Argumentum ad barely clever image from Internet-um?

 

[Arcus]

What are your credentials for holding a valid opinion?

 

[ImprobableJoe]

What are your credentials for holding a valid opinion?

I'm smart, well-read, and can face reality on its own terms. That puts me one step above most economists, as near as I can see. I could lie about credentials... but so can you.

More importantly, where's your evidence that anything I said was wrong, besides your cute little picture and your pissy little attitude?

BTW, trotting out that sort of nonsense on post #16 is certainly an inauspicious start to what looks like a quick trip to nowhere.

 

[Arcus]

So, self taught. Sounds familiar. You can find my credentials in my profile info.
Evidence that you are wrong? The ignorance you spout. It's like hearing creationists "debate" biology.

 

[ImprobableJoe]

So, self taught. Sounds familiar. You can find my credentials in my profile info.
Evidence that you are wrong? The ignorance you spout. It's like hearing creationists "debate" biology.

So you don't have anything to contradict anything I said, and you were just whining like a baby because the truth hurts. Why didn't you just tell me you were talking out of your ass, and save me 10 minutes of my life?

 

[ImprobableJoe]

For instance, Arcy-poo...

I made the claim that S&P made a 2 TRILLION DOLLAR MATH ERROR, and even though they had based their downgrade on that error, when they had their mistake pointed out to them they said "fuck it" and stuck to their guns. They didn't put a hold on it, or stop everything and recheck all their math. They just continued on like the mistake never happened.

http://www.cnbc.com/id/44043459

I guess everyone at CNBC is self-taught like me.

 

[Arcus]

I would have to start with middle school level economics, which I find rather humiliating for you. I would suggest you watch through the Khan Academy videos on economics before you post as these give a good introduction to the subject. At least I must assume you have read S&Ps full analysis and have access to a Bloomberg terminal at work.

Otherwise you can ask me questions and I can explain. A debate seems futile, and I won't bother reasoning if you do not bother educating yourself.

2 trillion error over 10 years is quite acceptable when talking about around 150-200 trillion economy in the same timeframe, it's within 95% error margin. In addition, even without the calculation error the rating downgrade still stands. In fact, it's on negative watch for further downgrade. As long as it doesn't hit BBB- (OL-) the situation is salvageable. But, of course, blame the rater and not the inept politicians leading a country of inept people who can't handle their money.

 

[ImprobableJoe]

I would have to start with middle school level economics, which I find rather humiliating for you. I would suggest you watch through the Khan Academy videos on economics before you post as these give a good introduction to the subject. At least I must assume you have read S&Ps full analysis and have access to a Bloomberg terminal at work.

Otherwise you can ask me questions and I can explain. A debate seems futile, and I won't bother reasoning if you do not bother educating yourself.

2 trillion error over 10 years is quite acceptable when talking about around 150-200 trillion economy in the same timeframe, it's within 95% error margin. In addition, even without the calculation error the rating downgrade still stands. In fact, it's on negative watch for further downgrade. As long as it doesn't hit BBB- (OL-) the situation is salvageable. But, of course, blame the rater and not the inept politicians leading a country of inept people who can't handle their money.

Link?

So... you can insult, and you can rationalize. You can't show that I'm wrong. Fair enough. You think that errors are fine, and that rating a bankrupt company as AAA is a sign of competence. The rating groups gave similar marks to Enron while it was cheating people for years, but I'm sure you're fine with that too.

S&P is a fraud. Until you provide something a bit stronger, my guess is that you are too. Run back to your Heritage Foundation or other BS think tank and try again.

In the meanwhile, chew on theNobel Prize, OK? I guess Paul Krugman is self taught too.

 

[ArthurWilborn]

The teapublicans are lying, conniving, pieces of crap. Constant complaints of entitlements ring through the air, yet the overwhelming number and amounts of entitlements are given to millionaires and billionaires. Their insistence that only poor people suffer losses is entirely to blame for this recent debacle.

The plurality (in number and amount) goes to medicare, medicaid, and social security - nearly all of which goes to people who are NOT millionaires. Tax breaks (which I think you're referring to) are not entitlements.

 

[Arcus]

I would have to start with middle school level economics, which I find rather humiliating for you. I would suggest you watch through the Khan Academy videos on economics before you post as these give a good introduction to the subject. At least I must assume you have read S&Ps full analysis and have access to a Bloomberg terminal at work.

Otherwise you can ask me questions and I can explain. A debate seems futile, and I won't bother reasoning if you do not bother educating yourself.

2 trillion error over 10 years is quite acceptable when talking about around 150-200 trillion economy in the same timeframe, it's within 95% error margin. In addition, even without the calculation error the rating downgrade still stands. In fact, it's on negative watch for further downgrade. As long as it doesn't hit BBB- (OL-) the situation is salvageable. But, of course, blame the rater and not the inept politicians leading a country of inept people who can't handle their money.

Link?

So... you can insult, and you can rationalize. You can't show that I'm wrong. Fair enough. You think that errors are fine, and that rating a bankrupt company as AAA is a sign of competence. The rating groups gave similar marks to Enron while it was cheating people for years, but I'm sure you're fine with that too.

S&P is a fraud. Until you provide something a bit stronger, my guess is that you are too. Run back to your Heritage Foundation or other BS think tank and try again.

In the meanwhile, chew on theNobel Prize, OK? I guess Paul Krugman is self taught too.

The US economy is around 14 trillion dollars per year and will (presumably) grow. Over 10 years the US economy thus produce at least 140 trillion, probably closer to 150-200 trillion unless it stagnates completely. A calculating error of 2 trillion over 10 years is therefore at most 2/140=1.4%, probably closer to 1%.
BBB- (OL-) is the lowest possible investment grade rating, BB+ is junk status. However, an OL- is usually treated as a lower grade since credit analysts look at downside risk and are conservative.

As for the rest, this is supposed to be the League of Reason. I therefore assume you are willing to do your homework before posting without the need for me to source every immediately obvious bit of knowledge to anyone with some Google-fu. If you have issues with the maths or concepts I have offered a link to intro economics (Khan Academy). TTC also have a lot of great stuff. Or you can just spend a few months reading the Wiki articles about finance. Krugman is always interesting, but it's a bit funny to see a New Keynesian hailing a econo-political system which hasn't done anything about job creation. I think he is shocked and angry, and will moderate his statements somewhat at a later point. It should be noted that he is not a credit analyst nor has he a strong reputation of predicting recessions. You might want to check out the interview with Dr. Doom, a man who at least has been proven correct, in Foreign Policy magazine. You might also want to check out the works by Robert Lucas and Nassim Taleb which criticize both leading schools from a micro-economic standpoint.

One of the main reasons for the downgrade was that keeping the US as AAA ration country is unfair to the other AAA countries which have vastly stronger fundamentals. The US willingness to pay it's bondholders after the debt ceiling debate would get a CCC-. The ability still remains AAA with negative outlook.

As for the claim that S&P is a fraud, it will have to stand to the detriment of the validity of your opinions specifically and generally. Shooting the messenger does not solve the structural issues in the US such as a check based banking system, poor educational system, a manufacturing sector in tatters, inability to export services, lack of a VAT system, political ineptitude on both sides, a massive public debt, a vastly underfunded retirement system, unsustainable negative balance of trade, social inequality, and so forth. Instead of yelling "America's Number 1" you might check the stats and whisper "America's number 25". And even that's giving it a lot of credit.

Put your money where your mouth is. Invest all your savings into US Treasuries maturing a few days after the next time the debt ceiling must be raised (and don't bother to insure it!). Do you dare to take the logical action of your statements? Do you trust that you'll be paid in full in around 1.5-2 years?