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Another Credit Agency Downgrades US

By Dan8267 (51/52 = 98% civil)   2012 Apr 10, 3:28pm   ↑ like   ↓ dislike   2,785 views   13 comments   watch (0)   share   quote  

This time from AA+ to AA.

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

Comments 1-13 of 13     Last »

1   APOCALYPSEFUCKisShostikovitch   2012 Apr 10, 4:26pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Obviously, it's because housing is underpriced!

2   TMAC54   2012 Apr 11, 12:01am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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   2012 Apr 11, 7:48am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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 (51/52 = 98% civil)   2012 Apr 11, 9:37am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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   2012 Apr 11, 10:46am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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 (51/52 = 98% civil)   2012 Apr 11, 11:12am  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

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   2012 Apr 11, 1:42pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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 (51/52 = 98% civil)   2012 Apr 11, 2:09pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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   2012 Apr 11, 2:20pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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 (51/52 = 98% civil)   2012 Apr 11, 3:58pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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

11   drtor   2012 Apr 12, 7:44am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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 (5/5 = 100% civil)   2012 Apr 12, 8:54am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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   2012 Apr 12, 12:35pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

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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