Nation Credit Downgrade

[Guest gcursor]

So I was up all night watching the credit downgrade which happened to the United States. I wonder if this will be one of those "where were you when this happened?" 9/11 attack, JFK assassinated, credit rating of the US downgraded.

I heard the White House press secretary say when they were trying to prevent this (and everybody was arguing)that this would be something VERY bad if it happened. He said that's why everybody was trying to avoid it (well TRYING is the operative word). Anyway it happened.

So my question is this: what do you think will happen as a result of the credit downgrade? (I'm pretty sure I won't want to be anywhere near the Stock Market on Monday) Whose fault do you think it is? The President? The legislators? Global warming?

gcursor

[Guest hitoallusa]

It depends on China now. As long as China, the largest creditor of the world's sole superpower, doesn't panic, the market will not face a catastrophic event. We need escorts aggressively go to China and bring dollar back to the US and we need young hard working smart people who can stand against the rising China. GO MER!

[Guest Allessio77]

I don't want to hazard a guess as to what will happen, but what should happen is that we get out of the 5 wars ( Iraq, Afghanistan, Libya, Pakistan and Yemen...and the costly "War on Drugs" too) that have bankrupted the nation; we let the tax cut for the rich (I am impressed with how many jobs they have created...In china) expire; and that we concentrate on creating good paying jobs (that generate tax revenues), with an Industrial Policy that encourages domestic manufacturing instead of the Free Trade fiasco.

[Guest gcursor]

You know...something is being sorely missed in all this economic jumble/news/etc that is going on now...

there is ONE person that is VERY happy that this scandal is going on because it's overshadowing his scandal and that would be Rupert Murdoch. He is sighing a big sigh of relief right now while the country focuses on something more juicy than his collapse

don't worry Rupert...we'll get back to you eventually

[TampaYankee]

So my question is this: what do you think will happen as a result of the credit downgrade? (I'm pretty sure I won't want to be anywhere near the Stock Market on Monday)

Probably initial hysterics in the market that will smooth out and recover in days. I do not believe that anyone really believes that the dollar is not the safest currency in the world. the two other credit mavens have held their water.

The world is astonished at the GOP publicly stated insanity and histrionics toward governing and the inability of our divided government to address debt problems, but then look at Europe. China is a paper tiger to steal a phrase. We are their biggest customer. If we go down the tubes then they have a really bad decade. They will not pull the legs out from under their best customer.

Whose fault do you think it is? The President? The legislators? Global warming?

gcursor

My reply won't come as a surprise to anyone, I'm sure.

The President and Sen. Reid called for a clean Debt Ceiling bill way back when. That would have avoided the three ring circus that went on the last few months. (S&P stated that perception was a significant part of the basis for their action -- inability for our government to come together to address a crisis.) Without it I suspect sleeping dogs would continue to lie for a while longer -- probably through the next election.

Also, I'm not sure I would have been happy with it but Obama proposed and Boehner seemed onboard with a grand $4 Trillion bargain but Boehner couldn't sell it to his membership. S&P also stated that a major factor was that the final agreement really did little to address the long term debt outlook, i.e. no targeted entitlement cuts and NO revenues. The Grand Bargain would have set targets on both.

You do the math as to who is at fault.

I'll let someone for the other team place predominant blame on how the Dems did caused this, short of totally rolling over and playing dead. They came damn near that as it is.

[Guest Allessio77]

Tea Party downgrade.....

[Guest hitoallusa]

Exactly what Chinese emperor and his subjects had in their mind in the 19th century when they faced foreign powers. I don't think we can underestimate China now unfortunately. Your assessment about close ties between the US and China, I strongly agree. China being a paper tiger I don't. The US needs China now and their support ever more.

China is a paper tiger to steal a phrase. We are their biggest customer. If we go down the tubes then they have a really bad decade. They will not pull the legs out from under their best customer.

[Guest DarnTop82]

Oh, I am sorry. So was that the plan? Obama spends himself silly, BLOWING through trillions of dollars then suddenly SURPRISE! debt ceiling hit! SO, what are the choices we have. Just let you pass whatever increase to keep the insane spending going without any sort of limits? or say here and now, it stops. Conveniently, just in time to blame it on the "Tea Party".

It all boils down to this- America does NOT HAVE A REVENUE PROBLEM. IT has a spending problem. Always has. From Bush 1 and 2, to this terrible affirmative action guy sitting in the office of the President.

Regardless, even if the Tea Party gets shut down, they served their purpose. They have put the breaks on the kind of Pelosi, Reid and Nobama.

Oh, and for those of you who say that the rich don't pay enough taxes? Tell you what. Why don't you go take what they government forces from you, double it and send it in. The thing is, even if they got rid of all the "Bush Tax Breaks" and tripled the taxes on the top 2%, it still couldn't cover the debt, much less the spending that is coming in the next 10 years. YOU CANT TAX YOUR WAY OUT OF THIS DEBT PROBLEM.

Plain and simple.

The end.

When 58% of this country do not pay any income taxes at all, and not only that, but TAKE from the system, it is unbalanced.

[Guest DarnTop82]

Tea Party downgrade.....

really? Tea Part downgrade? Where did you get that, MSNBC?

Last I checked, the Tea Party just wanted to save money(Cut), stop spending (cap) and Balance the Checkbook.(Amendment.)

The downgrade was inevitable. It wasn't just in the last 6 months that this happened. This has been coming for YEARS. The Trillions and Trillions of dollars Obama has spent while in office, which the vast majority of it is still to come in the coming years. You can't spend your way out of a depression. America doesn't have a revenue problem, it has a spending problem. From the military, to Medicare to WELFARE and on. And since when was Social Security an entitlement? Last I checked, it was mandatory that you pay into it with the promise of a safe return when you got older.

Education? We spend enough for education. It is not the governments job to ensure a healthy meal for kids, raise them, and care for them. Yet, this is what is happening. The parent's aren't there. Black, White and everyone has this problem.

Military? The soldiers do not get paid enough, but we have more than enough money for useless, never used weapons systems costing BILLIONS.

The tax system IS broken. Half of those living in country DO NOT PAY INCOME TAXES. Sure, they pay sales taxes, but after you take out welfare, foodstamps, electricity subsidies, CELL PHONE subsidies, jail costs ect ect ect, and not to mention TAX REFUNDS they really don't pay anything. Then, you have the super rich, who can afford to pay attorneys to find loopholes, and more importantly, corporations that literally pay NO TAXES skating by more and more. Meanwhile, your "middle class" is more and more burdened and shrinking every day.

On top of all that, you have a literal invasion of illegal immigrants, who the Republicans complain about, but hire non stop, and Democrats fake caring about unless a vote is needed....

Face it, no matter who you elect, its useless. America goes from one extreme to another, each time forgetting what happened the last time. From Obama to Michelle Bachman...its disgusting really. And all the meanwhile, the people are arguing about "Bush was worse" or "Obama isn't a citizen" and all the time, they are getting fucked in the ass with no lube. This country has been looted by both sides, and sold down the River. Democrat or Republican, doesn't matter.

Fuck it man, this is why Revolutions happen. Once the people truly feel hopeless and nothing to do lose, mark my words. There will be blood. On all sides, of all colors, race and religions.

I would hate for that to happen, but one cannot ignore history, or do so at their own risk. In that case, sexuality, color, beliefs and all that shit goes away and madness happens.

[TampaYankee]

Probably initial hysterics in the market that will smooth out and recover in days. I do not believe that anyone really believes that the dollar is not the safest currency in the world. the two other credit mavens have held their water.

It went pretty much as I expected with mad swings, up and down like a toilet seat in a urologist's office, that damped off after a week. Maybe a bit more dramatic but not much. The long term effect was a loss of a thousand points give or take, no doubt also partly caused by renewed worries in Europe. It avoided the multi-thousand point loss seen in 2008 which was never really in the cards based on the S&P downgrade. Watch for this to play out again around November when the Super Committee reports or fails to. It has been much less stressful watching all of this from the sidelines, thankfully.

The ride ain't over yet though. The EU is teetering on the brink with no real leadership showing the way to the tough measures needed. The only way to save the current configuration is for Germany and France to write most of the EU debt off. Merkel and Sarkozy continue to demur.

The EU may go up in a puff of smoke or it may throw out the Mediterranean tier, maybe with Ireland for good measure. I do not think they can't do nothing. (How's that for a string of negatives. )

Anything bad that happens will hit us with a jolt too. The EU is a big trading partner.

Britain, although it has its own serious problems, is looking pretty now with the refusal to opt in on the Euro dollar.

[TampaYankee]

The ride ain't over yet though. The EU is teetering on the brink with no real leadership showing the way to the tough measures needed. The only way to save the current configuration is for Germany and France to write most of the EU debt off. Merkel and Sarkozy continue to demur.

The EU may go up in a puff of smoke or it may throw out the Mediterranean tier, maybe with Ireland for good measure. I do not think they can't do nothing. (How's that for a string of negatives. )

Anything bad that happens will hit us with a jolt too. The EU is a big trading partner.

Britain, although it has its own serious problems, is looking pretty now with the refusal to opt in on the Euro dollar.

I really should have played the lottery today. I had no idea when I posted this AM that another eruption in markets due to the EU crisis would happen today. It was a safe bet it would happen near term but not today. Hence the lottery comment.

It was drama on CNBC this AM when Cramer remarked that it was a potential European Bear-Stearns moment and the British CNBC analyst crawled up his ass denying it and demanding Cramer take back his words, which he eventually did, tepidly. There is no telling how many shares of European Banks stocks were dumped on Cramer's words but apparently the tepid retraction was enough to contain the damage... for today.

This is what German and French inaction will invite -- chaotic failure of the EU banking system rather than a structured write-down passing out measured hair-cuts to everyone and pumping money into the system to keep it upright.

It is hard to find fault with the Europeans because I doubt we could address another meltdown with this Congress should it materialize. The Fed and probably Obama would do all that the law allows but he would be rewarded by being shown the door at the next election and we might well lose the independence of the Fed depending on how the next Congress turns out.

Our nation, and Europe it seems, have forgotten the lessons of the Great Depression or just do not believe them. It certainly is the case that those who do not remember history are destined to repeat it. Unfortunately, if they prevail they take everyone else with them.

[Lucky]

"Our nation, and Europe it seems, have forgotten the lessons of the Great Depression or just do not believe them. It certainly is the case that those who do not remember history are destined to repeat it. Unfortunately, if they prevail they take everyone else with them."

It doesn't look good, does it?