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Another Credit Agency Downgrades US


By Dan8267   Follow   Tue, 10 Apr 2012, 10:28pm   1,348 views   13 comments
In Boca Raton FL 33433   Watch (0)   Share   Quote   Permalink   Like   Dislike  

This time from AA+ to AA.

http://www.breitbart.com/Big-Government/2012/04/06/USA-Credit-Rating-Downgraded

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  1. APOCALYPSEFUCKisShostikovitch


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    1   11:26pm Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Obviously, it's because housing is underpriced!

  2. TMAC54


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    2   7:01am Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    APOCALYPSEFUCK is Tony Manero says

    Obviously, it's because housing is underpriced!

    That's Right ! I was just on my way out the door to make several offers at twice the asking price.
    Welcome back.

    It is beginning to appear the banks did not generate the confidence needed to keep the stock market rolling. They had hoped to sneak out the back door and simultaneously begin reinvesting in real property. Is this their last thread without the bernanke addiction ?

  3. tdeloco


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    3   2:48pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    They added that there was a 1.2% probability of U.S default in the next 12 months.

    It's still waaay too early to call US default, but we're getting there, unless things change.

    This time, treasury yields are up a few basis points.

  4. Dan8267


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    4   4:37pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    The US won't default honestly. It will partially default through inflation. The question is how much.

    Already treasures have a negative real interest rate return. Why would I give my money to the U.S. government at -3% interest?

  5. tdeloco


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    5   5:46pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Dan8267 says

    The US won't default honestly. It will partially default through inflation. The question is how much.

    Already treasures have a negative real interest rate return. Why would I give my money to the U.S. government at -3% interest?

    Yep, fiscal repression is probable, but we're just not there yet. Our debt is still increasing rapidly (annual increase is approx 10% nominal). GDP/inflation is supposed to be only 2-3% at this point.

    We can jump through hoops just to avoid a default. Either way, it's not gonna be pretty.

    I also read articles that suggest we'll stop borrowing and just print money to directly fund our financial obligations.

  6. Dan8267


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    6   6:12pm Wed 11 Apr 2012   Share   Quote   Permalink   Like (1)   Dislike  

    tdeloco says

    I also read articles that suggest we'll stop borrowing and just print money to directly fund our financial obligations.

    And history repeats itself like a broken record.

  7. Vicente


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    7   8:42pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Who gives a crap? These credit agencies are completely worthless and discredited anyhow.

    Your personal "credit rating" is a load of bunk and hokum too.

  8. Dan8267


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    8   9:09pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Vicente says

    Who gives a crap? These credit agencies are completely worthless and discredited anyhow.

    True. But even crap opinions can have huge effects on the economy if enough people buy into them or are afraid that other people will.

  9. drtor


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    9   9:20pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Vicente says

    Who gives a crap? These credit agencies are completely worthless and discredited anyhow.


    Your personal "credit rating" is a load of bunk and hokum too.


    “Eagles are dandified vultures” - Teddy Roosevelt

    Actually this was from Egan Jones - they are pretty credible (no pun intendend). Unlike the major credit rating agencies, EJ make a living collecting fees from investors, not from the entities being rated. They downgraded US way before S&P the first time, now they did it again.

    However the US government only endorses corrupted credit rating agencies that are paid for by those who are being rated, hence, nobody paid attention when EJ downrated the US the first time.

  10. Dan8267


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    10   10:58pm Wed 11 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    So, can I trust EJ to rate stocks and bonds accurately?

  11. drtor


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    11   2:44pm Thu 12 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Dan8267 says

    So, can I trust EJ to rate stocks and bonds accurately?

    "Trust" is a pretty big word. I would like to think they can provide useful information, yes. There are some academic papers showing that paid-by-investor ratings are more accurate than paid-by-the-rated ratings (quelle surprise!).

  12. Bellingham Bill


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    12   3:54pm Thu 12 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    tdeloco says

    I also read articles that suggest we'll stop borrowing and just print money to directly fund our financial obligations.

    This will work well for social security's needs -- just monetize the $2.5T in the SSTF over the next 25 years. We're already doing that with the 2% payroll tax cut, Congress is just printing the bonds to pay for this and stuffing them in the SSTF (to go with the $1T+ in printed accrued interest, 1985-now).

    The inflation this printing will produce should be counter-acted by the 'deflationary balance-sheet recession' spiral everyone else is in.

  13. tdeloco


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    13   7:35pm Thu 12 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Delurking says

    This will work well for social security's needs -- just monetize the $2.5T in the SSTF over the next 25 years. We're already doing that with the 2% payroll tax cut, Congress is just printing the bonds to pay for this and stuffing them in the SSTF (to go with the $1T+ in printed accrued interest, 1985-now).

    The inflation this printing will produce should be counter-acted by the 'deflationary balance-sheet recession' spiral everyone else is in.

    Oh, we're monetizing debt at an even greater pace than that: In 2011, the Fed purchased 61% of U.S. Treasuries. The deflation will only counter-act the printing for so long. After several years, it's gonna be like comparing a mouse to an elephant.

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