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Triple A? Not no more

Ore_Ele
Posts: 25,980
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8/5/2011 7:29:12 PM
Posted: 5 years ago
http://money.cnn.com...

It's not our bra size, nor our favorite minor leauge baseball team. And now, it's not our credit score.

It may have been our credit score at one time, but it is looking like it might not be no more (screw the double negative, since we're going down to double A). S&P told the white house that it plans on taking away our AAA status credit score today, however they haven't made anything official and the white house is probably looking at how they can buy their way out of this (though if spending wasn't cut, we could have paid more to get out of it).

Of course, both sides politically have already begun blaming each other for it. But, did anyone really think anything different was going to happen with politicans?

Anyway, should S&P hold to their intent, that could mean big things for everyone. Everyone that has debt, that is. Some people might think that that won't matter as you shouldn't have debt to begin with and this is only teaching those people a lesson, etc. But, everyone should know, that most businesses operate using debt (based on the idea that if they can get $10 million at 4% interest, but make 7% profit, that is a net gain for them), so this down grade will raise their rates and cut, the already tiny, investments made by companies to expand themselves.
"Wanting Red Rhino Pill to have gender"
Wnope
Posts: 6,924
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8/5/2011 7:43:37 PM
Posted: 5 years ago
At 8/5/2011 7:29:12 PM, Ore_Ele wrote:
http://money.cnn.com...

It's not our bra size, nor our favorite minor leauge baseball team. And now, it's not our credit score.

It may have been our credit score at one time, but it is looking like it might not be no more (screw the double negative, since we're going down to double A). S&P told the white house that it plans on taking away our AAA status credit score today, however they haven't made anything official and the white house is probably looking at how they can buy their way out of this (though if spending wasn't cut, we could have paid more to get out of it).

Of course, both sides politically have already begun blaming each other for it. But, did anyone really think anything different was going to happen with politicans?

Anyway, should S&P hold to their intent, that could mean big things for everyone. Everyone that has debt, that is. Some people might think that that won't matter as you shouldn't have debt to begin with and this is only teaching those people a lesson, etc. But, everyone should know, that most businesses operate using debt (based on the idea that if they can get $10 million at 4% interest, but make 7% profit, that is a net gain for them), so this down grade will raise their rates and cut, the already tiny, investments made by companies to expand themselves.

Next time a foreign country invades S&P, they've got their own backs.
Wnope
Posts: 6,924
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8/5/2011 8:12:41 PM
Posted: 5 years ago
At 8/5/2011 8:10:06 PM, Wnope wrote:
Go figure, turns out S and P might be working the numbers wrong. If they back off from this downgrade, they'll be a joke forever.

http://www.theatlanticwire.com...

Nevermind. Seems they admit to the wrong numbers but downgraded us anyways.

I'm upgrading them to triple A-hole for that.
Danielle
Posts: 21,330
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8/7/2011 6:30:49 AM
Posted: 5 years ago
My question is why anyone gives a FLYING FVCK what a group like S&P (or Moody's) has to say. If I remember correctly, S&P gave undeserved, top ratings to very risky financial schemes, such as collateralized debt obligations [CDOs] and sub-prime, mortgage-backed securities [MBSs]. These agencies had a variety of conflicts of interest that drove them to endorse financial instruments that they knew to be riskier than the ratings indicated.

Economist Robert Reich says, "Who is Standard & Poor's to tell America how much debt it has to shed in order to keep its credit rating? ... Until the eve of the collapse, it gave triple-A ratings to some of the Street's riskiest packages of mortgage-backed securities and collateralized debt obligations." Economist Joseph Stiglitz agrees, "They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies."

Indeed, S&P's credit ratings (i.e., lies) were largely responsible for the latest financial crisis. These credit rating agencies are completely unreliable, and various conflicts of interest will probably mean that they can easily be manipulated (bought) to say whatever it is that people with $$$ want them to say.
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darkkermit
Posts: 11,204
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8/8/2011 1:29:42 AM
Posted: 5 years ago
It's true that S&P is a sh!tty bond rater, however its not as If there is any other sources of reliable information on bond rating, since the marketplace is too regulated and government-backed licensing crates a cartel in the system. If you buy bonds, are you really going to invest in the time to figure out whether the rating is "correct" or not? No, of course not. So, you pretty much realize that S&P is a better judge then yourself.

It's quite amazing that S&P actually downgraded the US, considering that there is a huge special interest for it to keep its rating high.
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