Here’s what S&P said: “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” S&P also blames what it considers to be weakened “effectiveness, stability, and predictability” of U.S. policy making and political institutions.
Pardon me for asking, but who gave Standard & Poor’s the authority to tell America how much debt it has to shed, and how?
If we pay our bills, we’re a good credit risk. If we don’t, or aren’t likely to, we’re a bad credit risk. When, how, and by how much we bring down the long term debt — or, more accurately, the ratio of debt to GDP — is none of S&P’s business.
S&P’s intrusion into American politics is also ironic because, as I pointed out recently, much of our current debt is directly or indirectly due to S&P’s failures (along with the failures of the two other major credit-rating agencies — Fitch and Moody’s) to do their jobs before the financial meltdown. Until the eve of the collapse S&P gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.
Had S&P done its job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn’t have become so large – and their bursts wouldn’t have brought down much of the economy. You and I and other taxpayers wouldn’t have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn’t have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.
NOW FROM JAYWIZ
MONDAY promises a DAY OF HOPE & WISHFUL thinking
NOW THAT THE DOWNGRADE IS out of the bag - WHAT WILL THE FED be EXPECTED TO DO
When they MEET on Tuesday
ITS POSSIBLE FED RESERVE CHAIRMAN BEN BERNANKE MIGHT CALL an EMERGENCY meeting on SUNDAY FOR MONDAY Afternoon which STEPS up their Scheduled meeting for Tuesday.
That would give the markets another day to BREATHE easy HOPING for a QE3 to COUNTERACT
the SERIOUS effects of the S&P downgrade
BUT COME TUESDAY, the OBVIOUS wont be A HAPPY OCCASION FOR ANYONE INVESTED IN STOCKS
MONDAY"S WARNING is - DONT BE MISLED or Gullible - in other words, BE SKEPTICAL
Tuesday calls for VOLATILE MONEY Issues