S&P Cuts U.S. Outlook

Discussion in 'Politics' started by boedicca, Apr 18, 2011.

  1. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Finally getting around to acknowledging the obvious, the S&P has reduced it's outlook for the U.S. to NEGATIVE.

    Get ready for higher interest rates on the debt, and an even bigger (Unexpected!) Obama deficit as a result.

    As Paul Ryan noted, this is the most obvious financial crisis we have ever faced. Spending and debt are out of control. The official financial report from the U.S. Treasury (based on GAAP accounting, instead of cash accounting) shows a net present value of ($30T) on unfunded entitlement liabilities. 60% of current federal spending is on these programs, and it's going to get worse.

    We either fix this now - or watch the destruction of the dollar, and a permanent shift to a moribund low growth, high unemployment Euro-Socialst style economy.

    Standard & Poor's Ratings Services Inc. cut its outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating, as the path from large budget deficits and rising government debt remains unclear.

    "More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures," S&P credit analyst Nikola G. Swann said. He said the rating agency puts the chance of a U.S. downgrade within two years at least one-in-three.

    The move comes amid continued hand-wringing over the balance sheet of the world's largest economy and disagreement among politicians on how to address fiscal woes as economic growth remains tepid.


    S&P Cuts U.S. Ratings Outlook to Negative - WSJ.com
     
    Last edited: Apr 18, 2011
  2. Twofox
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    Twofox Active Member

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    Here it comes. Keep pointing fingers across the isle folks, and nothing gets done. When will everyone realize it's both parites and the "Political class" that's caused this over the years?
     
  3. VaYank5150
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    VaYank5150 Gold Member

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    This is actually a GOOD thing, right? Soon, we will not be able to borrow anymore money to fund the wars in Iraq and Afghanistan. Right?
     
  4. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Please explain how your comment relates to the Obama Administration's desire to increase the Debt Ceiling, and how much a downgrade will affect the cost of doing so.
     
  5. uscitizen
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    uscitizen Senior Member

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    S&P also rated the junk NINJA mortgage packeges as low risk.
    So why should we believe them now?
     
  6. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Go ahead and ignore this if you wish.

    The markets don't like it. And buyers of U.S. debt will certainly use this to demand higher interest rates, which will worsen the deficit.
     
  7. Robert
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    Robert Really nice Guy

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    Gee lets see hmmm I don't know how about this

    BRICS

    Man oh man that's going to be some legacy fitting of the 'ONE'
     
  8. Toro
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    Toro Diamond Member

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    This is why they will raise the debt ceiling. Not doing so could precipitate a crisis that would make 2008 look like a cakewalk.

    Perversely, investors are buying US bonds. 0-5 year debt is trading 3-7 higher, the 10 year is flat while the 30 year is off 18.
     
  9. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    100 years of progressive nanny statism.. and here we are. It's over folks. It's collapsing under it's own weight.
     
  10. expat_panama
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    expat_panama Silver Member

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    Thanks for the post, I was wondering why the markets are crashing.
     

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