by now we know the feeling of smoke being blown up our asses,it is all bullshit it dont fucking matter ,these are the same mutherfuckers that nearly bankrupt the country with the lies about the derivitives a bunch of fucking crooks that should be in jail along with the rest of the rotten fucking bankers greedy scum.

YES! None of these “financial” people are worth listening to. Their “jobs” are entirely manufactured. The FIRE sector is nothing more than an old, stinking cigarette butt.

There’s a new film about a government that colluded with banksters and lawyers to move the private gambling debts of the banksters onto the backs of the people of that country. Sound familiar?

I have a question, if anyone knows the answer offhand. When credit rating agencies predict the likelihood of “default,” do they only define default as failing to pay an obligation as it comes due? Is there a definition of default that would reach a country’s decision to voluntarily inflate its way out of debt?

I’m not suggesting the U.S. is anywhere near hyperinflation etc…, I’m just trying to understand what it means when the S&P warns of a potential default.

If default only means failure to pay, it seems silly for rating agencies to even rate the default risk of nations that issue fiat currency.

Japan has more debt then us but they pay less interest on their debt then us.

Well after all, the appropriate response to clowns is to laugh at them.

If default only means failure to pay, it seems silly for rating agencies to even rate the default risk of nations that issue fiat currency.

There you go. (Not tied to another major currency, that is.)

You beat me to it, David. I was going to tack on Dave Lindorff’s comment from Prof. Galbraith to Selise’s post of his January speech. (Well worth a thoughtful read.) Lindorff gives a different motive behind the skulduggery though, seeing it as an attack of rightwing persuasion on social security, medicare and the like – article can be read at commondreams.org.

I am finding this a bit more persuasive than the objection to the Franken amendment. It doesn’t have to make sense for the media to make much of it, and they did. And the medium is the message.

seeing it as an attack of rightwing persuasion on social security, medicare and the like

Yes, kills two birds with one stone — from the finance industry perspective. (Three, counting David’s)

I would raise a more nefarious possibility, namely that the downgrade will be one of the prime propaganda points in the rush to cut SS, Medicare, Medicaid. You’ll see this downgrade referred to over & over & over again as a reason why USG is tottering on the brink of financial collapse.

I owe you a drink.

This should raise the obvious question: does S&P hope to influence the final resolution of the Franken amendment with its negative outlook on U.S. debt? It’s a terrible thing that we have to ask if the umpire is taking payoffs, but we do have to ask.

Asked and Answered S&P should get a call from the Justice Dept regarding causing the banking crisis and be told that their assets have been frozen.
Obama can’t rule by turing the other cheek all the time he is going to have to be mean to his banker friends who are abusing his generosity.
Obama likes to think he is a Chicago Pol, a Machiavelli type etc but no ruler is effective if their friends like the banks abuse his generosity.
No ruler will ever find it easier to rule if the people know that his friends are taking advantage of his generosity…at their expense.
A reputation for fairness is essential to a ruler everyone must be scared of breaking the law equally.

“I don’t think you can discount this possibility.”

One cannot engage proper consideration AND reason without including such a “possibility”.

I do appreciate your dry and subtle nuance, your gut-busting humor (truth to tell), David.

‘Tis a Poor Standard to which the “scum”, as commenter number one has correctly and honestly identified the Financial Wizards, those who can take life and turn it to dead … and pat themselves on the back for doing Gawd’s Work, while the Serious People sing their praises from on high.

Thanks, DDay, for keeping us abreast of the doings of the brightest and best. It is much appreciated at a time when most purveyors of the “news” just want us to lay back and … comfortably snooze.

DW

How about “feed two birds with one scone.”

OT – Alan Grayson was interviewed on WMNF last evening. Interesting. Dude may, repeat may, run next year. Click in the “Select a Date” box, choose 18 Apr from the calendar, click “Go” button. About 55 minutes.

It’s simply a monetary psy-ops war to try to make the marks– the people that have nothing to do with the debts (the new designates for theft)– knuckle under and accept the ball and chain burden.

Also helps Barry shift attention from the unemployed.

Check.

How about “feed two birds with one scone.”

Better.

Oil_Bummer is as brittle and transparent as the rock candy “glass” used in Hollywood stunts.

“It’s a terrible thing that we have to ask if the umpire is taking payoffs, but we do have to ask.”

Actually we don’t have to ask. We already know that the rating agencies are thieves in league with our Fascist Overlords. They are doing their part to destroy the New Deal as several feedbackers have already indicated.

I am just so done with these bullies and thieves! The couldn’t do an honest day’s work if their lives depended upon it.

By the way. A “proper reaction” would be to throw these mother fuckers in prison!

Don’t look back. /s

Thanks David.

Caught about 45 seconds of Morning JOkE on my way out the door this morning. He was hysterical about S&P’s bullshit . Claimed it proves that we better get serious about our debt. He is such a sad, sad idiot. My response was “wait a minute, aren’t these the same assholes….” Never mind.

Just a drive by. Good monring all.

He is such a sad, sad idiot.

He’s a dangerous guy. Much more dangerous than your run-of-the-mill Repug.

Japan has a nuclear disaster hundreds of thousands of refugees but they are paying less interest on their ten year treasury note than us? S&P cares to explain that?

I’d like us not only to stand up to the lying liars at S&P but to the whole industry as their business is nothing but theft, fraud and black mail. Caste out the money changers, their con man partners in crime, their hack publicists who call themselves “media” and their assassins.

They would say (cynically) that’s where we’re headed.

1) why did this get such notoriety yesterday, and 2) why did S&P even bother?

It got attention yesterday because people like Obama’s buddy Short Ride used it as a justification in the continued calls for austerity and cuts to social programs.

Looks like S&P did its part to advance the interests of the MOTU back when it helped create the mortgage debacle a few years ago and like it is doing its part to advance the interests of the MOTU now.

x2

Barry loves him some S&P downgrading. Creates a “problem” that he can fix by doing what he and the Rs want to do anyway. And distracts from the true problems — which he can’t, or won’t, try to solve.

I think the main reason for this press release was to give the republicans more fuel to eliminate programs and government jobs

NPR had clips of Lieberman yesterday evening talking about how this is another wake up call telling us that it’s time to get serious about the debt.

Didn’t these assholes just extend the Bush tax cuts for the rich a couple of months ago?

seems I owe you a beverage econobuzz, you beat me by one post.

let me know what’s your pleasure and I’ll send the waitress there pronto

Pointing, laughing, and heaping ridicule and derision seems like the right way to go:

S&P Can Call Bond Vigilantes From The Vasty Deep

Can we start using scarequotes to call S&P a “Bond Rating Agency”?

MOTU thinks about many more angles & ways to advance their side than we do. We’re always stuck reacting to their latest attack. They’re dancing circles around us.

Notice how the author in his own words – not quoting others – isn’t saying it is impossible to default:

In addition, as long as debt is issued in US dollars, and as long as the US prints its own currency, the government has a pretty good shot at paying off debt.

I don’t think it is politically likely to happen, but to say that it is “impossible” for any country that has its own currency to default is just not true.

DING!

In case you haven’t seen this (a click through from this post at The Automatic Earth): FRAUD: Federal Reserve Is Selling Put Options On Treasury Bonds To Drive Down Yields (Apr. 17, 2011)

Shot glasses of Столичная (Stolichnaya) for everyone.

Vodka on the rocks — a double with anchovy-stuffed olives, please.

“Didn’t these assholes just extend the Bush tax cuts for the rich a couple of months ago?”

Surprisingly enough on FDL of all places, I’ve been told that the Bush tax cuts were basically harmless.

Musta been a troll.

Didn’t these assholes just extend the Bush tax cuts for the rich a couple of months ago?

by “these ass holes”, the only one responsible for that was obama

and yes, he did extend the bush re-distribution of middle class assets scheme, he was warned that would cost jobs, he was warned it would create more debt problems and he did know it would cause the problems congress is facing now

so he created the problem in order to complain about it and shed even more programs and jobs

blame obama here not the republicans, they are his tool right now

k…do you want it dirty?

Of course, the U.S. can default if we want to — if we insist on doing so. But that’s different from claiming that we will find ourselves in the near term in a position where that is our only option.

What’s even funnier is Greece having to pay 4% on 13-week paper, almost 20% on two-year paper, and 60% or above for long bonds.

Please.

Yes. This is something we need to start getting really loud about – we demand equality under the law, even for the rich and powerful and past/current presidents.

In all fairness, the Bush tax cuts were harmless–to the plutocracy.

The problem, of course, is from whom do we demand it? The PTB say we already have it.

blame obama here not the republicans, they are his tool right now

he did extend the bush re-distribution of middle class assets scheme, he was warned that would cost jobs, he was warned it would create more debt problems and he did know it would cause the problems congress is facing now

Agree 100%. Other than noting the fact that they are part of the kabuki, Republicans should be mostly ignored. Obama and the sellout Democrats, who pretend to be champions of liberal and progressive positions on issues – though they are not – are the biggest political problem for the American people by far.

Ha ha. Like we’re going to stop printing up all the money we feel like having around.

Dumbasses.

I don’t recall ever reading that at FDL. Was it in a front page post, or was it in a comment of a paid troll?

k, on it’s way

Two or three weeks ago I received an email request to take a survey regarding Alan Grayson (I’m in his district, gave money). My take on the survey questions is that he is debating between the house and senate. One question specifically asked if I would vote for him if he ran for congress again. A few more questions pertained to my thoughts on Bill Nelson.

I think it’s safe to say he’s got something up his sleeve. I still get regular emails from him regarding his thoughts on current issues and, of course, he’s still on the teebee.

The PTB only fear our size, our sheer number and only fear will motivate them to do what is right. They will not fear anything until there are massive demonstrations and walk-outs/work stoppage and I just don’t know if the citizens are up to that. I think we have to force them out of their complacency first.

It could have been a comment from an unpaid troll, even. LOL. Spanishinquisition seems to be busy this morning digging up comments and quotes from old FDL threads to “prove” his/her point. (Hint: they don’t.)

EDIT: that may have been someone else. If so, my apologies.

Hey you guys, it is too early to be drinking dirty Martinis. Isn’t even quite lunchtime yet (here).

West Coast?

Fair point.

From a link provided by EmptyWheel in “DOJ Points to David Passaro’s Trial as Proof We Investigate Torture, But It Actually Proves John Yoo Should Be Tried” (Apr. 13, 2011):

A Spanish court is also investigating a complaint by a Moroccan who said he was tortured while at Guantanamo.

The National Court said in February it was competent to take the case as the complainant, Lahcen Ikassrien, has been living in Spain for 13 years.

I think he’s referring to MMT’s line – “The government doesn’t need taxes to function.” (paraphrasing)

Indiana. But it’s not even noon yet.

No, it wasn’t someone else.

http://firedoglake.com/2011/04/19/early-morning-swim-359/#comment-2354011

In the interview he said he received over $38K Jan – Mar, unsolicited. Webster has gotten around $30K from PACs but Grayson’s money came from individual, low dough folks.

An actual rule of law, rather than rule by men of wealth and power, will ONLY come about when the overwhelming majority of “the people” INSIST upon it.

As long as most people do not even understand the principle and BELIEVE that, if they are good little consumers and don’t do anything “wrong”, then justice will take care of itself, nothing can or will “change”.

As long as those in the judiciary cannot perceive when the “law” is being used to destroy the law, as clearly, most cannot or will not, because those doing the destroying are their fellow haves and have-mores, the rule of law will remain a sorry joke in this nation.

When how much money and connection one has decides how much “justice” one will receive and whether one even has the “standing” to be heard, then we are all Dred Scott – which is just the way the current Supreme Court intends it to be.

The rule of law died with Bush v Gore.

And Obama (as a “Constitutional Scholar) claims the right and power to kill anyone he chooses anywhere or at any time … thereby putting ALL of international law on the endangered species list.

Frankly, RoyalOak, much, much more painful education will be required … until the American people, generally, realize that there just might be something of value in an actual rule of law … say another twenty years or so.

DW

Now it is :-)

“I’d like us not only to stand up to the lying liars at S&P but to the whole industry as their business is nothing but theft, fraud and black mail.”

You hit that nail head so hard, a conversion from mass to energy occurred.

S&P….. Moody’s…. CDOs/MBS “AAA” $147.50 p/b Meltdowns…..

http://www.poclad.org/?pg=About_Us

“We the people and our federal and state officials have long been giving giant business corporations illegitimate authority. Today, a minority directing giant corporations and backed by police, courts, and the military, define our culture, govern our nation, and plunder the earth. By What Authority reflects an unabashed assertion of the right of the sovereign people to govern themselves.”

http://www.poclad.org/?pg=Articles

http://www.poclad.org/?pg=Articles&show=b110314.txt

“That means something more than fixing the wrongs. It means making the rules, defining the terms, running the show — in a word: governing ourselves. I believe the messages of the Program on Corporations, Law and Democracy (POCLAD) and Move to Amend, arguing the case for a self-governing citizenry, make good sense, no matter the audience.”

“It is because our lives are governed by powerful elites that this better life for the many eludes us. Instead, people’s lives are shaped by systems — economic, transportation, education, healthcare, agriculture, etc. — that make the most money for the people running them — to hell with what makes a better life for all. The wants of the few continue to trump the needs of the many … for now.”
“It is precisely when we learn how to gain the power to govern ourselves — not just the power to fix the wrongs — that we will be able to reorder these systems to serve the common interest and create a better life. And not coincidentally, it is when we begin to take organizing seriously that we will begin this journey.”

Let the journey begin and end the people’s leveraged servitude to the corporate entity, a creation of law, protected now by Citizens United, surely as the slave was liberated from his master by war and law, to correct the injustice of a legal decision which protected the interests of slave-owner’s and firmly planted the seeds of America’s civil war. To life not corporate servitude, leveraged under the color of law!

If the Obama Administration is really upset with S&P for downgraded our nation’s debt, then they should go after this rating agency for deliberately keeping the mortgage market artificially inflated by continuing to give mortgage-backed securities a AAA rating when they should have been rating them as junk. But the Obama Administration won’t do this because if they did, then they would also have to go after Goldman Sachs for lying to their investors about how mortgage-backed securities were a safe and secure investment.

And we know that Goldman was lying about this because there is no other way to explain how they made enormous profits by making side bets that the mortgage market would collapse. But with a presidential election just around the corner, the Obama Administration can’t afford to expose the fact that their largest campaign donor should be put behind bars. And Obama is too consumed by greed to ever turn down any of the lucrative deals that awaits him when he leaves public office, courtesy of Goldman Sachs.

In order for Obama to maximize his own personal wealth, he knows, as any aider and abettor of financial crimes would know, that he must protect Goldman at all costs.

Two strikes in a row! Where is the third “strike” to throw the corporate batterers out!

” go after Goldman Sachs for lying to their investors about how mortgage-backed securities were a safe and secure investment.” SOB’s

Bravo! Well said.

I am totally happy to just end the corporate entity at this point. Think of all the rogue, cancerous entities we can get rid of. Read more at MoveToAmend.Org.

I completely agree. I just hope I’m alive to see it.

Galbraith and Baker are two of my favorite economists, but I must respectfully disagree with them on this matter. If I were thinking of loaning money to a government and learned that they were about to cutting on their wealthy (with a multiplier of -0.3) and cut social-services (with its multiplier of +1.5), I’d doubt their economic sanity and expect greater risk.

And, it wouldn’t reassure me that they could pay be off in debased currency as long as they had diesel fuel to run their printing presses.

Clockwatching again. LOL.

that they were about to cutting on their wealthy (with a multiplier of -0.3) and cut social-services (with its multiplier of +1.5),

I don’t understand “cutting on their wealthy.” Is that a typo?

Beowulf and letsgetitdone have been taking that line regarding the debt limit, and presumably have done so regarding the tax cuts. Their basic point is that we can print (or stamp) as many dollars as we need to.

I partially agree, but what can’t go on forever won’t. There’s a limit to how much signorage a government can indulge in before inflation takes over. However, I don’t think we are anywhere near that limit right now.

“And we know that Goldman was lying about this because there is no other way to explain how they made enormous profits by making side bets that the mortgage market would collapse.”

By futures traders driving the price of energy up! A fraud of monumental proportions which has extracted billions $$$, deprived people of property and decimated a standard of living. http://www.ricoact.com/

Deja Vu! Now here comes round two. This is nothing to laugh about anymore!

Yup. That was supposed to be “cutting the taxes on their wealthy”.

Their CEOs also have more honor and patriotic feeling than ours. They try to make sure their people don’t starve and they don’t pay themselves five hundred times what their lowest-paid workers make.

Of course. The timing hits just as the mainstream press was picking up on what David here was telling us last week: Wall Street’s telling Boehner to quit screwing around and raise the debt limit already, whilst Boehner’s trying to screw around a bit longer to see what more he can screw out of the Democrats. Boehner and Co. couldn’t risk seeing this migrating from the papers to hit the evening TV newscasts, so S&P stepped up to the plate for them to try and smother the news that Boehner and Co. are bluffing like all get out.

“Their CEOs also have more honor and patriotic feeling than ours.”

Got that right! To many amoral CEO’s here in America, using that corporate shell to Shield themselves and protect profit, at America’s expense. Now we know why it is called Blue Cross Blue Shield. A Public Charity and $11 million dollar CEO “chute rides.” No problem here? In how many other states do these “chute rides” happen?

The reason why the rating agencies get their business is that insurance companies and other institutions whose portfolios are required to carry securities of a certain quality need to show the regulators that what they are holding meets the quality standard. It’s less about risk assessment (the private owners can do their own research) than it is about certification. When a particular bond is down-rated (say Ecuadorian bonds), the insurance companies and pension funds holding it have to sell it. In a worst-case scenario the market for such bonds can freeze up, which is why the rating agencies send ‘signals’ ahead of time.

As to how they decide to rate, one my ex-students used to manage the sovereign debt division of Moody’s. I once asked him how they went about downgrading a country like Japan (which he did). He said that normally they don’t review every country on a continuous basis, but if something comes up they call a meeting and discuss it. It wasn’t clear that any quantitative criteria are imposed. People go around the table and they try to reach a consensus. Experience shows that people with strong opinions in such situations tend to get their way. Galbraith is right. The whole process is laughable.

At 10 to 15 percent true unemployment, the odds of domestic inflationary pressure driving up the US price level are about zero. The only way you could get inflation out of a monetization of the debt at this stage in the game is if foreign holders of dollars were to dump them all at once and cause a drastic decline in the real exchange rate, which would drive up the price of everything we import whether or not the economy is anywhere close to full employment.
The odds of this happening are also next door to zero, because holders of dollars don’t have a lot of options for placing large amounts of cash elsewhere, and the big holders like China and the Arab States would suffer huge capital losses from any devaluation.

Short and simple: for some time to come there is no impediment to monetizing the debt as is presently being done by the Federal Reserve. We can worry about the Second Coming when it is about to happen, which looks like a long time away.

Thanks for this and your @ 82 as well.

If the US Gov purchased all those S&P AAA rated sub-prime liar loan backed securities from the banks around the world, perhaps we could strengthen our US country credit rating – at least in the eyes of S&P and Moody’s and Fitch?

/s

S&P = Shit&Piss.

:D

Every quarter I also receive reports about dire financial constraints and their singular solution. Almost all of the reports originate from Nigeria.

Is the issue here really S&P? How about the fact that Barney Frank, such a man of the people, is a hack for the ratings agencies — I mean seriously, getting the conflict of interest rule delayed by 2 years? What a fraud!

I think your view was best expressed by Machiavelli, something to the effect that The Prince can be loved or feared, but for his interests it is better to be feared.

In fact, “quantitative easing” is simply an exercise in paying off national debt with printed money. Granted, the Treasury then owes the Fed, but there’s no danger that the Fed will refuse to roll that debt over, or whatever else it is that we fear China might do to us if we owe them too much.