credit downgrade

[josh7328]

What is the significance of this new credit rating downgrade and stock market fall?

[UberTong]

The start of a new age. Lock and load.

[ShooterJM]

Generally it increases the borrowing costs of the entity that's been downgraded. That actually hasn't happened yet because bond rates are also viewed through a sort of relative strength prism. Because of the debt crisis in europe there is still a very high demand for US bonds thereby keeping the price and interest rates down.

Now that the US has been downgraded you'll see a waterfall of downgrades started with GSA's, States, Muni's, etc.

[Ronin13]

I just read that now that the downgrade has happened it'll open doors for Obama to raise taxes... truth to this?

[UberTong]

That would be nynco's dream if he did raise taxes Ronin. But according to Obama, it just don't matter what S&P says...

http://www.msnbc.msn.com/id/44059948/ns/business-stocks_and_economy/#.TkBQfFt6B5Z

[ShooterJM]

Well, given that the downgrade was driven by the overall debt situtation, it could. It definately highlights that the debt situtation needs to be addressed either by real spending cuts or additional revenues.

I'm guessing the pub's will spin this as their plan didn't go far enough and the dems will spin this as "see I told you we needed revenue". I'd expect a lot more grandstanding, but little action until the US markets start looking worse then the European markets.

[Ronin13]

Just saw this:
http://www.facebook.com/l.php?u=http%3A%2F%2Fwww.michelebachmann.com%2F201 1%2F08%2Fbachmann-responds-to-president-obamas-statement-on-the-sps-downgrade-of-the-credit-rating%2F&h=RAQBOG69mAQACPRj1BYt4x4IM1v6hJJEkR_H_nGudeVxHBg

[mutt]

The start of a new age. Lock and load.

Really? A downgrade hardly represents a collapse of American society. China is rated AA-, Japan is AA-, Russia is BBB+. I don't see those countries embroiled in chaos and economic collapse and they're ranked less than our now tarnished AA+ score. This is more of a rating on our political gridlock than our economic issues. And Standard and Poors were the ones giving AAA ratings to all those mortgage backed securities that turned out to be worthless and started this death spiral. Take what they have to say with a huge grain of salt.



I'm guessing the pub's will spin this as their plan didn't go far enough and the dems will spin this as "see I told you we needed revenue". I'd expect a lot more grandstanding, but little action until the US markets start looking worse then the European markets.

And this is exactly why we were downgraded. If our polarised political system can't reach a simple compromise on something a mundane as a 'debt ceiling', then it can't be expected to compromise on solutions to real problems. This has people nervous. Investors who buy sovereign debt don't like unpredictable and ineffectual political systems.

[ShooterJM]

Tomorrow will be interesting. Let's see if the Spanish and Itallian 5 years can stay under 5%....

[mutt]

Tomorrow will be interesting. Let's see if the Spanish and Itallian 5 years can stay under 5%....

Italy is the next great sucking sound you're going to hear from the EU. I believe they're the 3rd largest bond market in the world? If they go the way of Greece, I don't think the EU has the funds or the political will to bail them out.

[UberTong]

Really? A downgrade hardly represents a collapse of American society. China is rated AA-, Japan is AA-, Russia is BBB+. I don't see those countries embroiled in chaos and economic collapse and they're ranked less than our now tarnished AA+ score. This is more of a rating on our political gridlock than our economic issues. And Standard and Poors were the ones giving AAA ratings to all those mortgage backed securities that turned out to be worthless and started this death spiral. Take what they have to say with a huge grain of salt.


Ya Mutt, I realize it's not fighting on the streets and apocalypse action in my street. But...I do think its the dawn of a new era. We are being/ have been passed and are no longer the super power we once were or even the same nation we once were. Oh and I really don't want to live in any of those countries you mentioned, so if it gets to that I revert to my first statement.

[Ronin13]

Ya Mutt, I realize it's not fighting on the streets and apocalypse action in my street. But...I do think its the dawn of a new era. We are being/ have been passed and are no longer the super power we once were or even the same nation we once were. Oh and I really don't want to live in any of those countries you mentioned, so if it gets to that I revert to my first statement.

And Mutt, along with this ^^ I think the more likely is that Uber was talking about the sentiment: "Oh great, another straw to add to the camels back... when's it gonna break?"
Tried to find the actual clip but no vid so this is what I think of when things start to get grim with .gov pooling more and more power:
"Assume they got our phones, assume they got our houses, assume they got us, right here, right now as we sit, everything. Assume it all." Robert DeNiro "Neil McCauley" in Heat.

[mutt]

Ya Mutt, I realize it's not fighting on the streets and apocalypse action in my street. But...I do think its the dawn of a new era. We are being/ have been passed and are no longer the super power we once were or even the same nation we once were. Oh and I really don't want to live in any of those countries you mentioned, so if it gets to that I revert to my first statement.

I hear ya UberTong. We definitely have serious issues and as a country we need to address them. I just don't buy into all the fear mongering and doom and gloom. We've endured and prevailed over darker times - The Civil War. The Great Depression. The early years of WWII where it looked as if we just might loose. The Vietnam War and the resulting civil turmoil. And then there's the long laundry list of lesser challenges in our history. We Americans seem to have a habit of pulling our asses out the fire before it gets burned too badly. We'll see.

[UberTong]

I hear ya UberTong. We definitely have serious issues and as a country we need to address them. I just don't buy into all the fear mongering and doom and gloom. We've endured and prevailed over darker times - The Civil War. The Great Depression. The early years of WWII where it looked as if we just might loose. The Vietnam War and the resulting civil turmoil. And then there's the long laundry list of lesser challenges in our history. We Americans seem to have a habit of pulling our asses out the fire before it gets burned too badly. We'll see.

Ya I hear ya on that too, just having a crappy day here...one where I welcome the revolution you know. See my 'fed up rant' thread from earlier and you will know where the comment came from. But yes Ronin, you are spot on...I'm thinking it just keeps coming, when will it stop. And mutt you're right too, we have proven to be resilient and I don't buy into the doom and gloom all the time, but today I'm just kinda over it all. I need a beer.

[mutt]

Ya I hear ya on that too, just having a crappy day here...one where I welcome the revolution you know. See my 'fed up rant' thread from earlier and you will know where the comment came from.

I have my days too were I'd welcome a second revolution. Send some lead downrange and then have a beer. It'll make it all better for a little while =)

[UberTong]

I have my days too were I'd welcome a second revolution. Send some lead downrange and then have a beer. It'll make it all better for a little while =)
Amen to that, cheers man. Wifey stocked the mini fridge by the tv with Busch light, it looks like a white trash Snoop dogg video. Uhhhhhh!

[Beer]

[jmg8550]

Holy crap! 16 posts and not a peep from nynco-mpoop. [Wow2]

[Irving]

So is this going to make it more difficult for me to refinance my car? I had considered doing it before all this happened, but wanted to wait a little.

[josh7328]

So is this going to make it more difficult for me to refinance my car? I had considered doing it before all this happened, but wanted to wait a little.
^this. I was wondering what the little people effects will be.

[DFBrews]

^this. I was wondering what the little people effects will be.

I am in the infant stages of repairing my horrible credit and am curious as well.

[ShooterJM]

The prime rate is what will change the average consumer rate for credit cards and financing. As long as US bonds are, at least relatively, in demand then the US will be able to keep interest rates low. Personally, I'd lock in now if you can.

[hatidua]

I suspect that the level of downgrade was less than it could have been. Some politicians were advocating that the U.S. simply default, which I doubt would have had the three main rating firms thinking very highly of U.S. paper.

[Mazin]

You guys heard the fed was suppose to announce that they are fixing the rates until mid-late 2013, wonder if this is just a feable attempt at trying to act like things are under control.