Moody's Downgrade
David John ·
Jul 14, 2011 at 4:29am
The Moody's threat of downgrade a few minutes ago makes me fret.
Every year the debt limit is routinely raised. What is different this time around? It's the Tea Party that's new. Anything bad that comes out of confrontation will be laid at the feet of the Tea Party.
Let's cool it, for now. Let's be vocal, very vocal, that's all. This is a time to roll with the punches.
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Comments :
Jul '10
Re: Moody's Downgrade
The debt, and the spending, is at historic levels. The only comparison is with the end of World War II, when we actually accomplished something in exchange for the debt, and we reduced spending drastically and managed the debt responsibly, at least by comparison.
When you have 53% of voters against raising the ceiling and 37% for, It's a great idea to leave the Tea Party framed as the only political force willing to finally address the problem. Greece, Portugal, Ireland, Spain, and Italy are toast, and the UK has been past the tipping point for awhile now, but no one wants to admit the problem extends to one of the EU's big three. The Economist "knows" maxed out credit cards are the new prosperity. Here, try some of this kool-aid.
Edited on Jul 13, 2011 at 6:03pmJul '11
Re: Moody's Downgrade
Sisyphus:
When you have 53% of voters against raising the ceiling and 37% for, It's a great idea to leave the Tea Party framed as the only political force willing to finally address the problem.
Edited on Jul 13 at 06:03 pm
I hope you're right about that.
Sep '10
Re: Moody's Downgrade
Why does a Moody's downgrade cause you to fret?
Apr '11
Re: Moody's Downgrade
Higher interest rates during the worst long-term unemployment since the Great Depression are a self-evident cause for alarm. (While acknowledging that funding giveaways on debt wasn't a very bright idea, either.)
Sep '10
Re: Moody's Downgrade
Higher interest rates during the worst long-term unemployment since the Great Depression are a self-evident cause for alarm.
I think cutting the principal would make the interest payments easier to take.
Apr '11
Re: Moody's Downgrade
Pseudodionysius: Higher interest rates during the worst long-term unemployment since the Great Depression are a self-evident cause for alarm.
I think cutting the principal would make the interest payments easier to take. · Jul 13 at 7:21pm
#HarvardStudyConfirms that that is so. What that has to do with my answer to your question is frankly baffling me.
Sep '10
Re: Moody's Downgrade
Michael Patrick Tracy
Pseudodionysius: Higher interest rates during the worst long-term unemployment since the Great Depression are a self-evident cause for alarm.
I think cutting the principal would make the interest payments easier to take. · Jul 13 at 7:21pm
#HarvardStudyConfirms that that is so. What that has to do with my answer to your question is frankly baffling me. · Jul 13 at 7:32pm
You're assuming that a credit downgrade and higher interest rates will be made on a principal that doesn't go down. In other words, the credit downgrade can work to force cuts. Does that make sense?
Apr '11
Re: Moody's Downgrade
Pseudodionysius
Michael Patrick Tracy
Pseudodionysius: Higher interest rates during the worst long-term unemployment since the Great Depression are a self-evident cause for alarm.
I think cutting the principal would make the interest payments easier to take. · Jul 13 at 7:21pm
#HarvardStudyConfirms that that is so. What that has to do with my answer to your question is frankly baffling me. · Jul 13 at 7:32pm
You're assuming that a credit downgrade and higher interest rates will be made on a principal that doesn't go down. In other words, the credit downgrade can work to force cuts. Does that make sense? · Jul 13 at 7:49pm
If we were dealing with a rational politician like Bubba, it would.
But we're not. He'll bring it all crashing down in the service of his bad ideas. I don't want to give him the gun to shoot us with.
Oct '10
Re: Moody's Downgrade
Moody's is simply another group of cookie cutter interchangeable paper dolls. If you think that anybody at that level in the financial world is a conservative, you are living a dream.
Their pronouncements are a calculated support effort for the "progressives". So they downgrade our credit worthiness... wow, why would that be??? Perhaps being the biggest Greek immatator out there might have something to do with it.
If you still trust the feral government to honor it's promises, you are a dreamer.
Apr '11
Re: Moody's Downgrade
Whether you approve of it of not, a Moody's downgrade matters. Trying to wish it away by blustering comments, and a 'couple-few bucks, will get you three things: 1) Diddly, 2) Squat, and 3) a small drip, no-room at Starbucks.
May '10
Re: Moody's Downgrade
Is it political? Of course. Does it matter anyway? Of course.
But are they bluffing? Couldn't it be an empty threat (strictly referring to a ratings change in response to the current debt ceiling impasse)?
Sep '10
Re: Moody's Downgrade
But are they bluffing?
The ratings agencies were utterly clueless on: the Dot com bubble, housing crash, Greece cratering etc.
They don't have an impressive track record.
Sep '10
Re: Moody's Downgrade
But we're not. He'll bring it all crashing down in the service of his bad ideas. I don't want to give him the gun to shoot us with.
Now's not the time to wobble.
Jul '11
Re: Moody's Downgrade
When you live in a fiat world where every dollar printed represents debt and opportunity to the quants then somehow more debt means more money for someone. This is why the money people feel all OK with our massive debt and thinking taxpayers feel queasy.
This whole discussion the president is having feels like the last best effort of a crack addict to score again before court ordered rehab.
I am curious how this announcement and the QE3 hint from Bernanke tie together?
Sep '10
Re: Moody's Downgrade
There's a reason the Washington establishment is panicking about the threatened ratings downgrade (and, no, it wouldn't surprise me if the ruling class is protecting their own and using a little double obfuscation to force a deal). Obama's drunken spending binge has only attracted the wrath of the Tea Party and people who pay taxes, a shrinking constituency in America today. Oh, and people who are looking for work. And, people who are working. Well, okay, just about everyone.
But a ratings downgrade is the international equivalent of chasing Obama around the schoolyard, tackling him and then running his underwear up the nation's flagpole as a permanent sign of fiscal turpitude, and, hence, moral turpitude.
The message: If you run a Triple Alinsky economy, you don't get to keep your Triple A bond rating. Hard to stomach, even on Mount Olympus. But then, its all Greek to me.
Jun '10
Re: Moody's Downgrade
Assuming the interest on the debt is paid, which the Constitution, I believe, requires, and which our tax revenues are large enough to accommodate, does anyone find it strange that a ratings agency would downgrade our debt because we refuse to borrow more? I would be curious as to who is wanting to buy this extra debt anyway? Is the Bernanke just going to print money so that the USA buys its own bonds? Would that make Mr Moody feel all warm and fuzzy, or would it give him a huge case of ulcers? If it were me, it would be the latter. So my curiosity begs, why make these headlines, Mr. Moody? What's your angle? Perhaps someone here can explain how owing the Chinese or whoever another 3 to 4 trillion dollars is sound policy.
Jun '11
Re: Moody's Downgrade
In the real world, however, money is still cheap, meaning that the Treasury market still is trading with very low rates.
One would expect the opposite if we were about to fall from a cliff.
Aug '10
Re: Moody's Downgrade
Just watch and see what happens after the downgrade. The media will say "it doesn't make any difference at all". Obama will blithely ignore it and press on with his fundraising, castigating the Republicans as usual, demagoguing and scaring the old folks, racist this-racist that, same old/same old.
These guys have very short attention spans, their friends swoop in to make prepositioned transactions, fresh money comes in to swell the coffers of the K Street troops like SKDKnickerbocker, and on to the next "crisis".
Hopefully the spending on the top line ,interest and constitutionally required stuff, will start to crowd out the discretionary payoffs to the street soliders, the faux stimulus packages, and the Goldman Bernanke deals.
Jan '11
Re: Moody's Downgrade
We're already at 14 and one half times this particular picture so what's wrong with tacking two more pictures onto it‽
Those are Benjamin Franklins in stack.
Edited on Jul 14, 2011 at 7:45am