And Standard & Poor's Opinion Matters, Why...?

[filkertom]

Steve Benen, with a nod to Joe Klein at Time, reminds us why our moneyed masters really suck:

... S&P prepared an analysis to justify a specific conclusion. The analysis was off by $2 trillion. Treasury explained to S&P that the analysis wasn’t even close to being accurate, which led the ratings agency to concede they’d made a mistake.

And a few hours later, S&P decided to reach the same conclusion anyway. The agency wanted to proceed with a downgrade; whether its numbers added up was irrelevant.

That certainly inspires confidence in the integrity of Standard & Poor’s decision making, doesn’t it?

All that these ratbastards obsess about is getting a high score. Unfortunately, their little game affects our very existence.

Comments

[kirylyn.livejournal.com]

so basically S&P just wanted to grab the glory headlines of being the first to have the "stones" of *downgrading the US*?? so they fudged the numbers, got called on it but went ahead and did it anyway?

[filkertom.livejournal.com]

A-yup.

Do you really think any of them involved can be trusted now?

[nimitzbrood.livejournal.com]

I can't even possibly think of one person in Washington or at the top of any Fortune 500 or even Fortune 1000 companies that I'd care to trust any more. S&P is just one of the more recent ones to take off the mask.

It's like we are sinking as a country into a massive whirlpool and the people at the top are scrambling to collect all the lifeboats for themselves.

It's been literally years since I've been proud of my country. I mean I've talked with people in other countries regularly through the course of my work and just friendships in general and without fail every one of them told me the same thing. "American politics and business are the most corrupt on the planet."

For years I disagreed with them but in recent times I've accepted that what my friends across the world have been telling me is true.

It's not about partisanship or pride or anything else but greed. Greedy bastards getting rich at the expense of others.

Sorry if I'm a bit ranty on the subject. My wife works in the library/textbook industry and just got her hours cut...again... And likely with the downgrade _somebody_ will raise taxes locally which means out bills will go up.

It just never seems to get any better! B-(

[nagasvoice.livejournal.com]

I understand every time somebody threatened to look at S & P's involvement in the bank meltdown, they threatened to downgrade the government's credit ratings. I understand investigators backed off several times, and came on again anyway. So it's been retaliatory threats. Whoops, now they've done it anyway. Whose credibility is in question now, given the way they went about this?

[louisadkins.livejournal.com]

My first cynical response was "Oh, so someone at S/P is a Tea Bagger?"

[kengr]

Maybe they should go ahead with the investigations now. And threaten to bring charges if S&P even *hints* at dropping the rating again because of the investigation.

[nagasvoice.livejournal.com]

Sorry I don't have the link at my fingertips--I think it was off a post by twistedchick on DW, but all her links are good info and scarey as hell anyway.

[sdelmonte]

Another reminder of why no one really trusts any corner of Big Business now.

[filkertom.livejournal.com]

Oh, but we're supposed to consider it a feature, rather than a bug, that so many politicians have "run businesses" (some ran them right into the ground). Never mind that running a not-for-profit governmental body takes a rather different set of assumptions from running a for-profit business.

[tcgtrf.livejournal.com]

To quote Vox: "S&P's worst-case scenario is far too optimistic to be credible."

This is just the first of a series of downgrades that the US will experience over the next five years, as it becomes more and more apparent that the nation will not be able to pay off the money that it owes...ever.

Tom Trumpinski

[peachtales.livejournal.com]

I do want to point out that it's not just the numbers that go into a credit rating, it's everything about the money and the politics and the likelihood that some people in that system will make it impossible for a country to meet its obligations.
On that note, heck, I'm not too convinced of the US's political stability right about now either.
Beyond those, there is the express certainty that we would raise taxes in order to make monies available to pay our obligations. In the current political climate, that is far from certain, and that also makes a huge dent in confidence.

So yes, I understand where you're coming from, but there is worse to come.

[teddywolf.livejournal.com]

I am not actually surprised at the S&P change to the US credit rating.

The largest power bloc in the majority party of the House of Representatives played chicken with the debt ceiling. Leaving aside the August 2 drop-dead date, it had really gone past time several months before but was buoyed by very creative accounting. This power bloc seriously talked about the US not paying its debts on time.

i am not saying I am happy about the change to the US government's score; but I am not surprised by it, especially since the Tea Party bloc has indicated they will fight this same battle again and again.

Vox, however, is not correct. The S&P does not have accountants and forecasters as good as the ones the government employs in the CBO. If we ever get grown-ups running the show and not afraid of standing up to bullies, we will be fine dealing with our debt.

[tcgtrf.livejournal.com]

To quote the Miz...."Really?" "Really?" "Reeee-ly."

If the accountants and forecasters are so good, why did none of them predict the 2008 economic collapse, while Vox and I did as far back as 2006?

If the accountants and forecasters are so good, then why have the unemployment figures exceeded what they predicted in their worst-case scenario (where there was no stimulus passed at all) and why has the unemployment then continued, not dropped, as they predicted even though several stimulus packages were implemented?

You, teddy, are trusting the same damn people who got us into this mess by pure stupidity to get us out again, while I am simply expecting large-scale idiocy to continue.

Keep watching. In two years, I'll be expecting you to tell me, (as others have who doubted me five years ago), that I am AWWW-SOME (to again paraphrase The Miz).

Tom Trumpinski

[teddywolf.livejournal.com]

Tom, I was predicting a bubble far before 2006. You seem to not be calling me awesome.

Regarding the tactical forecasters at the CBO, they were not asked to look at what would happen if a major commercial bank went under. They were not asked what would happen if the bottom fell out of the housing market. They are probably short-staffed, like most government organizations. You don't run time-consuming what-if scenarios at work if you are being told to work on other things.

I am not trusting the deregulated banks who got us into this, nor am I trusting the policymakers who cut taxes on the people most able to afford paying them, added an expensive unfunded mandate that did not have a tax to pay for it, and got us into 2 wars. I *am* trusting the one nonpartisan government department whose job it is to give the best projections they can and who are right considerably more often than they are wrong.

I am also trusting the people who said that deregulating the banks was a bad idea, and stated the right reasons.

Unemployment has continued because we as a country have been dropping people from government payrolls. Unemployment has continued because the stimulus package passed was far too weak, relying mostly on tax cuts instead of putting people to work. Unemployment has continued because businesses are facing weak demand.
Demand for products and services was previously driven by the vast majority of the consumer sector having some form of disposable income. Now that most of the consumer sector is completely tapped out, and the private sector won't pay wages good enough for the consumer sector to consume, and the public sector is shedding jobs, we are facing unemployment of disastrous proportions. I have called it The New Depression before and I will call it that again.

The businesses have cash they are sitting on. They are not growing.

And a few days later, we find out nobody cares

[writer-jack.livejournal.com]

US Treasury bonds are faster than ever with the market declines and at a higher premium, meaning that nobody gives two hoots about the S&P rating, the full faith and credit of the USA is still as strong in the marketplace as it's even been. Ultimately, its the buyers, not the rating agencies which decide what is trustworthy, and the buyers have spoken. The USA is still triple A with them, no matter what S&P says, and the USA has no trouble selling it's debt. The big money is lined up and bidding high for the right to buy it.