U.S. loses AAA credit rating from S&P

goingbroke

NEW YORK (Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday in an unprecedented reversal of fortune for the world's largest economy.

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renman95

It's going to be a long and crazy weekend.

OnlyGoldIsMoney

It could be interesting when the Asian markets open.

OzzyAndy

I guess it was a matter of when, not if.

roadrunner

Seems to me that it was already common knowledge that the US was not AAA regardless of a rating assignment. Aren't these the same guys that said everything was AAA
back in 2006-2007?

roadrunner

CaptHenway

Nice of them to wait till after closing on Friday.........

secondrepublic

gold is still AAA rated.

storm888

Maybe, the debt ceiling should not have been raised.

OnlyGoldIsMoney

<< <i>Maybe, the debt ceiling should not have been raised. >>



Indeed. They fretted about default and earned a downgrade with their "spend more now and talk cuts later" plan.

roadrunner

<< <i>Maybe, the debt ceiling should not have been raised. >>



Raising the debt ceiling was fine. But doing nothing along with it except to plan on spending a lot more $$ was not so good.

roadrunner

CaptHenway

<< <i>Maybe, the debt ceiling should not have been raised. >>



T'was too little, too late!

AUandAG

We kept our AAA rating through the Great Depression.

What's that say of today?

I think that there will be little, if any moves in any markets as this was anticipated
thanks to Congress's recent debacle. Certainly the stock market made a huge
correction. Metals may not be as affected as we think.

But, my Sterling has not arrived at Midwest yet, so a nice pop in silver would be very nice, indeed!

bob

cohodk

<< <i>Maybe, the debt ceiling should not have been raised. >>



The only way to have acheived a balanced budget was to have not raised the limit.

stevek

This is shameful receiving a downgrade like this, and it would be more shameful still if we in our country don't accept this as a huge wakeup call, and do something about it...sooner not later.

pmcollectour

I'm guessing we see a little more market instability short term, and then a slow climb in our market because no matter how bad Washington tries to mess it up, our companies are still doing well, which should propel certain companies stocks higher. If Europe begins to implode, then it's a whole new ballgame.

jmski52

What debt ceiling? I don't see no stinkin' debt ceiling. There is no debt ceiling. I've never seen it, have you?

piecesofme

I guess it was a matter of when, not if.
I agree, the damage has been done. It's almost old news and was to be expected.

Nice of them to wait till after closing on Friday........
Not arguing, but you don't think this whole thing is being choreographed? Word of this leaked on Thursday obviously to insiders that it was going to be done after the close Friday, so they simply covered their arse with the priviledged info. they get/got. It's built in. I expect some drop Monday, but not like Thursday because that was the reaction of this "new" info. to us peasants.

Spooly

Dow down 699 points this week...... the insiders have already sold!

derryb

I will be watching TBT in premarket on Monday.

percyb

Too many inept politicians starting with the man at the top who are not up to the economic challenges of the day, to be sure.
How can a country with so many vibrant companies making money go broke? Wouldn't you think that the gov would emulate
cos like Apple or IBM of CF or countless others in the SP 500? WTF??

RedTiger

I posted my rants in my blog (see signature link).

I heard there was a $2 trillion math error in calculations in a preliminary summary given by S&P to the White House so the release was delayed from the middle of the day until after the market close. Think of that, a $2 trillion dollar math error. Wowee.

For those citing strong earnings, in my blog I mention the growing gap between U.S. wages and corporate earnings. While earnings are decent and the PE is in line with historic averages, the U.S. wage to stock price ratio is near historic lows. At some point that is unsustainable, because U.S. consumers get money to spend from wages. As for Apple, don't get me started, that is a U.S. company mostly in name. There are a few high level elite jobs, a bunch of low level retail store jobs, while all the manufacturing is done overseas.

What is galling, is that Socialist Italy with one of the most fractious political systems in Europe can agree to balance their budget. Unbelievable. The execution may not match reality, but at least in theory they are plotting the course.

As for market reactions, watch the bond market. It often drives the bus. The nearly $2 trillion in QE programs and threat of more have artificially kept interest rates low. The U.S. ten year bond is yielding 2.58%. Does that make any sense to anyone? At some point the jig will be up, but the Fed stands ready to throw more money into the QE pot to keep the bond market at manipulated record low yields, so short bonds at your own risk.

57loaded

one of RedTiger's link in his blog

add up those who pay no federal taxes and federal workers and a few other wing nuts sorta seals "their" vote for 11/2012.

if i read it correctly (not in this link) the federal budget defecit balancing act with regards to raising (actually not raising the ceiling) is not on the table until after the '12 elections?

i wanted to add, good posts here and your blog is well thought out. the "Vanguard" post is very interseting regarding "Boglehead" and permanent ratios especially today and the foreseeable future.

...but on topic i think the rating change was inevitable and factored last week. S&P may have followed along years back but are not afraid to calling a spade a spade.

BigE

<< <i>gold is still AAA rated. >>




I nominate for POTD-------------------BigE

vann

Geithner: No Risk U.S. Will Lose AAA Credit Rating

stuckonnights

Not arguing, but you don't think this whole thing is being choreographed? Word of this leaked on Thursday obviously to insiders that it was going to be done after the close Friday, so they simply covered their arse with the priviledged info. they get/got. It's built in. I expect some drop Monday, but not like Thursday because that was the reaction of this "new" info. to us peasants.

I sadly .

roadrunner

Martin Armstrong web page

Armstrong is puzzled by the downgrade saying that that the raters tend to be followers rather than leaders. This just doesn't happen until
money flows shift direction. And based on what's been happening in USTBonds lately, the money flow is strongly into them, not out of them.
Maybe S&P read one too many Jim Willie article and decided to try and atone for their all their botched ratings from the 2007-2008 crisis.

The US is still the go to guy when it comes to liquid bonds and currency. No one else can handle it and the US dollar will be the last
currency to go. After all it's the world's reserve currency. He suggests that all the S&P did was highlight the sovereign debt crisis
with more light. But the FED has already said it will accept US Bonds as AAA so nothing changes among the banks. Interesting read from
an insider who had to be put in jail to keep him and his economic models out of the hands of J6P.

roadrunner

vann

Buffet says in Omaha, US is still AAA - Still worried about inflation

vann

<< <i>Too many inept politicians starting with the man at the top who are not up to the economic challenges of the day, to be sure.
How can a country with so many vibrant companies making money go broke? Wouldn't you think that the gov would emulate
cos like Apple or IBM of CF or countless others in the SP 500? WTF?? >>


Unfortunately, for the government, they can't move overseas to China!

jmski52

The US is still the go to guy when it comes to liquid bonds and currency. No one else can handle it and the US dollar will be the last
currency to go. After all it's the world's reserve currency. He suggests that all the S&P did was highlight the sovereign debt crisis
with more light. But the FED has already said it will accept US Bonds as AAA so nothing changes among the banks.

HEADLINE: S&P DOWNGRADES WORLD RESERVE CURRENCIES; ALL FIAT DOWNGRADED.