Downgrading of credit rating not credible

[BlindBoo]

And this goofy screed is supposed to lead us to believe you are one of the smart ones?

Better stick to your non-approved recreational herbs.

BTW oh smarter than everybody else... the word you are searching for is rescinding and persecution.

Go do some more bong hits.

No it's just an opinion, oh spealling natzi!

What's a spealling natzi?

Ewe

 

[TruthSeeker56]

Americans are not very smart these days but I believe they are starting to come around.
T Party leveraged the fact that the news was before the debt deal that the credit rating would be downgraded by Stand and Poors. No problem with that as that is politics.
But anyone, including members of the T Party, that believes that has any credibility whatsoever is ignorant.
Folks, Standard and Poors are the same clowns that gave AAA ratings to all of those bundled mortgages that were toxic loans from the start and they also gave an A rating to Lehman Brothers, the company that filed the largest bankruptcy in American history.
Yes, most Americans do no research whatsoever and will jump on any bandwagon with a seat be it socialist, liberal, far right, religous right or T Party ideologue gone whacky.
However, my bet is that this will be good for the T Party long term. I fully support their core beliefs. If anything, this will awaken their base and continue to weed out the kooks in their midst which EVERY political entity, namely Democrat and Republican, always have.

So, now that Standard & Poors decided to be HONEST and non-political by lowering the United States credit rating, what does that say for Moody's, and Fitch, who are both still giving the United States AAA credit ratings?

S&P warned Congress and Obama that unless at least $4 trillion in CUTS were made during the debt ceiling negotiations, they were going to lower the credit rating. They did what they warned they do. It's that simple.

Blame the "T" Party all you want. That's always the end game of the leftists. Point fingers. Assign blame. Promote class warfare. Promote racial unrest. Scare senior citizens. The list goes on and on and on.

 

[Gadawg73]

Americans are not very smart these days but I believe they are starting to come around.
T Party leveraged the fact that the news was before the debt deal that the credit rating would be downgraded by Stand and Poors. No problem with that as that is politics.
But anyone, including members of the T Party, that believes that has any credibility whatsoever is ignorant.
Folks, Standard and Poors are the same clowns that gave AAA ratings to all of those bundled mortgages that were toxic loans from the start and they also gave an A rating to Lehman Brothers, the company that filed the largest bankruptcy in American history.
Yes, most Americans do no research whatsoever and will jump on any bandwagon with a seat be it socialist, liberal, far right, religous right or T Party ideologue gone whacky.
However, my bet is that this will be good for the T Party long term. I fully support their core beliefs. If anything, this will awaken their base and continue to weed out the kooks in their midst which EVERY political entity, namely Democrat and Republican, always have.

So, now that Standard & Poors decided to be HONEST and non-political by lowering the United States credit rating, what does that say for Moody's, and Fitch, who are both still giving the United States AAA credit ratings?

S&P warned Congress and Obama that unless at least $4 trillion in CUTS were made during the debt ceiling negotiations, they were going to lower the credit rating. They did what they warned they do. It's that simple.

Blame the "T" Party all you want. That's always the end game of the leftists. Point fingers. Assign blame. Promote class warfare. Promote racial unrest. Scare senior citizens. The list goes on and on and on.

Me, a leftist?
Promote class warfare, me?
Promote racial unrest?
Son, I vote Republican for 40 years, own 3 corporations and make payroll every two weeks.
I am not leftist. Funny shit though so thanks for the laugh.

 

[ShackledNation]

You can believe all you want that those bundled mortgages and Lehman Brothers' books were worthy of a AAA rating and Standard and Poors were credible in believing their books were not cooked.
I don't.
I pay cash for everything.

They were not worthy of those ratings, correct. But the reason the ratings were given anyway is because of government.

First of all, the handful of approved ratings agencies are actually just an SEC-created cartel protected from competition.

Given that these agencies were protected from free competition by government, it can easily be objected that these agencies would not want to create political waves by rocking the mortgage boat, endangering a potential loss of their protected profits. Given the Federal Reserve's statement that the investments were sound, and government policy and rhetoric encouraging such policies, these agencies may have lost their status had they rocked that boat.

For the same reason, the US government is rated higher than it should be. It makes no sense to embarrass the hand that feeds you.

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

 

[BlindBoo]

They were not worthy of those ratings, correct. But the reason the ratings were given anyway is because of government.

First of all, the handful of approved ratings agencies are actually just an SEC-created cartel protected from competition.

Given that these agencies were protected from free competition by government, it can easily be objected that these agencies would not want to create political waves by rocking the mortgage boat, endangering a potential loss of their protected profits. Given the Federal Reserve's statement that the investments were sound, and government policy and rhetoric encouraging such policies, these agencies may have lost their status had they rocked that boat.

For the same reason, the US government is rated higher than it should be. It makes no sense to embarrass the hand that feeds you.

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Now could you please explain how Banks were force to make risky loans specifically?

 

[ShackledNation]

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Now could you please explain how Banks were force to make risky loans specifically?

So basically you are arguing most unsound mortgage lending took place outside such institutions affected by the CRA. That is probably correct, and there is likely nothing wrong with that statement. But who says the CRA is the only thing that matters? The same approach to risk assessment that informed the CRA pervaded the whole mortgage lending arena, thanks to other agencies that pushed the same destructive loose-lending strategy on all American financial institutions: Fannie and Freddie, the Department of Housing and Urban Development, the Federal Reserve, and further legislative acts like the Equal Credit Opportunity Act.

Fannie and Freddie were massive players. Just before the government takeover of the institutions in 2008 they had a hand in about 50% of all mortgages, and 75% of new mortgages.

Furthermore, foreclosures primarily came about because of adjustable-rate mortgages, not subprime mortgages. There was a larger percentage increase in adjustable-rate prime mortgages than in subprime mortgages. Government was continually pressuring lenders into making riskier loans in the name of "racial equality." These banks made risky loans because they did not want to be sued for racism. The CRA also opened banks up to crushing discrimination suits if they did not lend to minorities enough, even if these minorities had bad credit. The entire political establishment was pushing for lower lending standards, not just the CRA.

ACORN, often ignored, made business virtually impossible for banks until they gave into its demands and made billions of loans they would have never made. One of their tactics was to block drive in lanes for banks until they gave into demands, crushing their ability to do business at all. This private intimidation, coupled with political campaigns to lower lending standards at all levels of government, helped to steer the newly created money by the Federal Reserve into the housing market, thus creating and feeding the housing bubble.

With that said, yes, it is quite clear government and interest groups basically forced banks to make such loans.

 

[ShackledNation]

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

So nobody was forced but the banks where forced...

Nice...hack but nice.

I was referring to ratings agencies, which was the topic of discussion. The point about banks was a separate argument. Nice try, though.

 

[auditor0007]

Are you fucking serious? We're 14.5 trillion or nearing 100 percent of gdp in federal debt and with over 100 something trillion in overall liabilities that we can't possibly pay back. The entire freaking world couldn't bail our asses out if it tried, and we're spending 1.5 trillion over what our tax base can support each and every year.

Truth is S&P downgraded us to little as there is NO chance in hell that we're AA+ right now...In fact we're worst off then Greece that has a CC rating. The sad truth is they are scared to down grade us through the fact that if they do our whole world is at risk of sliding into the crapper. In for reasons of being raided by police and other organizations for reasons of such.

Also, we're not some small nation that can easily be bailed out of a mess like Greece, ect. Ask your self what is more risk at the end of the day? Greece that can be bailed out(And fully backed by the central Bank of the european union) or the United states that can't.

The european union can't even bail out a Spain size nation there selfs. It would break the back of the world to try bailing out the US.

If we would quit the stupid fighting and use some common sense, we could get the budget close enough to balanced that we could easily deal with the debt. To do so we need to cut some spending and raise taxes enough to cover the rest. It really is not as bad as it looks if we do something about it now. It's like buying a house. If you bought a house 20 years ago, the payment was $1000 per month, which at the time may have seemed like a lot but today is a very reasonable payment because your earnings have increased substantially since then. Same with our debt. As the economy grows, the debt will become a much smaller portion of the government's total revenue making it much easier to either pay off or at least service. All it would take is a bit of level headedness. Unfortunately, based on the evidence, there isn't much of that out there at the moment, and that is why everyone is running scared.

 

[Gadawg73]

They were not worthy of those ratings, correct. But the reason the ratings were given anyway is because of government.

First of all, the handful of approved ratings agencies are actually just an SEC-created cartel protected from competition.

Given that these agencies were protected from free competition by government, it can easily be objected that these agencies would not want to create political waves by rocking the mortgage boat, endangering a potential loss of their protected profits. Given the Federal Reserve's statement that the investments were sound, and government policy and rhetoric encouraging such policies, these agencies may have lost their status had they rocked that boat.

For the same reason, the US government is rated higher than it should be. It makes no sense to embarrass the hand that feeds you.

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

The forced loans that were risky were about 7% of the total $$$ amount loaned out.
Lower middle income risky loans for $140K to buy a home had little or no effect.
Speculative upping on high end 700K+ homes and the speculative pre-sale appraisals is what sunk the ship.
And no one forced the banks or mortgage companies to make any of those loans.
And how much $$ for lots to bedeveloped loaned out? None of that government had any involvement in. That was 50% of the topple. Speculative investing run amuk.
No one forced a 2 income couple in California refying every two years to pay off the 30K in credit card bills.
We fucked ourselves. The dog does not eat homework. Responsible citizens pay their bills. No one forced them to take out loans they could not pay for.
And many of the high end foreclosures, as high as 50%, are walkaways. They have the $$ but see no future and live in a state where you can not file a deficiency to satisfy the difference on an auction bid sale.

 

[ShackledNation]

The private sector NEVER OBJECTED to those ratings.
Government was involved but $$$$$ driven by the private sector was the motivation.
No one twisted anyone's arm and forced them to take out a mortgage at the point of a gun.
It is our fault, not the government.

Did I ever say anyone was forced to do anything? No. And people did object to the ratings, namely Austrian economists and people like Ron Paul who said the market was unsustainable. Your assertion is false.

You also missed the larger point. These ratings agencies aren't really "free market" at all. They are creations of our corporatist system. They are protected by government from competition of other agencies that might actually be honest and trustworthy. Government gave them a cartel.

Banks were basically forced to make risky loans however. Government policy heavily pushed for this. Everyone was doing exactly what the government wanted. Everyone was believing the lies of the Federal Reserve. That is what a bubble economy is like. People have a deep-seated belief for something, and government encourages the belief and pumps resources into it to make it last. The belief recently was that housing prices could never fall. But reality overcomes the beliefs eventually, and you get a recession to correct the misallocation of resources.

Rather than let the free market heal, government interferes again and tries to perpetuate another false belief, or the same one, attempting in vain to "fix" reality so it becomes fantasy again.

The forced loans that were risky were about 7% of the total $$$ amount loaned out.
Lower middle income risky loans for $140K to buy a home had little or no effect.
Speculative upping on high end 700K+ homes and the speculative pre-sale appraisals is what sunk the ship.
And no one forced the banks or mortgage companies to make any of those loans.
And how much $$ for lots to bedeveloped loaned out? None of that government had any involvement in. That was 50% of the topple. Speculative investing run amuk.
No one forced a 2 income couple in California refying every two years to pay off the 30K in credit card bills.
We fucked ourselves. The dog does not eat homework. Responsible citizens pay their bills. No one forced them to take out loans they could not pay for.
And many of the high end foreclosures, as high as 50%, are walkaways. They have the $$ but see no future and live in a state where you can not file a deficiency to satisfy the difference on an auction bid sale.

I addressed that same argument in post number 27.

 

[Soggy in NOLA]

It happened, therefore it is very credible.