S&P Assholes

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I am tired of hearing about these power hungry rich assholes in the news. They just want to hurt an already unstable Economy even more since their Credit down grade didn't get enough attention. I say we need to put a foot to their asses...

S&P: Local And State Credit Downgrades To Come After Budget Finalization

http://www.huffingtonpost.com/2011/0..._n_931307.html

Standard and Poor's decision to downgrade the United States' sovereign credit rating has already sent shock waves through the stock market and worsened fears of a double-dip recession. But for local and state governments, the worst may be yet to come.

State and local governments are likely to face credit downgrades following a finalization of the U.S. budget, Standard and Poor's said in a report Thursday.

The threat to governments at the state and local level is only the latest shot fired in an ongoing battle between the public sector and S&P and the other major rating agencies. Earlier this month, Standard & Poor's became the first agency in history to lower the nation's sovereign debt rating to AA+, one notch below a perfect triple-A.

Then, following two weeks of unpredictable market volatility, it was reported that the Justice Department was going ahead with a probe into the agency's activities in the years preceding the financial crisis, particularly its habit of endorsing mortgage securities that later turned out to be toxic. S&P and the rating agencies Moody's and Fitch are believed to have played an instrumental role in setting up the conditions for the financial panic of 2008.

Despite a growing number of people calling the credibility of these agencies into question, S&P warned this week that it's considering further revisions to governments below the national level.

While the the U.S. Budget Control Act of 2011 already includes at least $2.1 trillion in deficit reductions over the next decade, further cuts to be determined by a bipartisan "super committee" by late November will largely inform S&P's decisions over which state and local governments do or don't get downgraded.

Credit ratings vary by state, and "differing levels of reliance on federal funding, and varying management capabilities” will play a significant role in determining which ratings change, S&P says.


"In our opinion, the longer-term deficit reduction framework adopted as part of the Budget Control Act of 2011 (BCA) could undermine the already fragile economic recovery and complicate aspects of state and local government fiscal management," Gabriel Petek, an S&P analyst, said in a statement.

Already this year, S&P has revised the credit ratings for several state governments. Six states have received upgrades, including South Dakota and Wyoming, while New Jersey and Nevada have both had their ratings lowered.

Meanwhile, many counties and municipalities have also fared poorly, experiencing "super-downgrades," a fall of three or more notches on the rating scale. Manassas Park, Va., for example, was downgraded a full five notches on Standard and Poor's scale, from AA- to BBB, due to "significant and rapid deteriorations of the city's financial position," the WSJ reports.

Despite the grim outlook, S&P says that since budget cuts would not take effect until 2013, state and local governments have time "to implement budget adjustments that, in our view, could prove important in the maintenance of their credit quality." Likewise, the agency said that it was possible that the highest-rated local and state governments could maintain their AAA rating.

[Black4DrEK]

Man, Im SOOOOOO TIRED of it ALL!!!! Everything is just straight BULLSHIT!

[Browning151]

Yep, it's all S&P's fault. Damn those assholes for downgrading our governments credit rating based on the ridiculous levels of spending and debt.

Let's not look back at where all this started back in '94 with Clinton and his administrations push for home ownership, continued by Bush and then when it all collapsed the insane amount of spending that the gov't has done to basically prop up the economy.

Let's not look at the Fed keeping interest rates artificially low for far too long, or mortgage qualifications being so low that people who shouldn't even be buying $25k cars were buying $250k homes on interest only ARMs, or the people who knew they could never afford those homes when their ARM reset but bought them anyway, or Fannie and Freddie for packaging and selling sub-prime mortgages as good investments.

Let's not take into account that our gov't is spending hand over fist and incurring debt at an exponential rate, all the while pushing for expansion of entitlement programs, health care takeover, increased energy costs in the name of "green energy" and about a billion other ridiculous things that our gov't just continues to spend and expand while the economy continues to tank.

The president, congress, the fed and the treasury all continue whistling past the graveyard like spending money is magically just going to fix everything one day. It hasn't yet, and it's not going to. It's only going to continue to compound the situation.

[bu villain]

I don't know why anyone gives a shit what the ratings agencies say anyways. They were the ones who stamped AAA on the CDOs that exploded and helped send us into this recession in the first place.

[ek forever]

Who cares what the ratings agencies say? They're well within their rights to say whatever they want to about a country, business, etcs financial merits. Every opinion should be taken with a grain of salt. Don't get mad at S&P. They can do what they want.

What does S&P stand to gain from downgrading the economy and destabilizing the market?

A lot of people would tell you right now the markets are already inflated, but I don't see you condemning the fed for that, just quoting huff-po and yelling loudly.

To capitalize on what Browning said:

Precisely, spending didn't work for Wilson, FDR, Hoover, Carter, etc and it isn't going to work for this president. Keynesian-ism doesn't work. You can't seize money/wealth from economic producers and let politicians spend it. Remember, they are politicians spending money. Republican or Democrat they will spend it where it benefits them the most.

Read up a bit on Calvin Coolidge. Good lesson in economic kick-assery. He made "draconian" cuts to the federal government and handed us the roaring 20's. Don't for a minute thing Hoover was laissez faire either. He's portrayed that way but he was as interventionist as they come. Then FDR grew the government by leaps and bounds and the guy dragged the economy through the mud while the rest of the world recovered from the great depression. Most industrialized countries were out of the depression in 3-5 years and we saw 15% unemployment in FDR's 3rd term.

Take a look at the stimulus. It cost over $1 Trillion after it was adjusted for inflation for the years it took to spend. An alternative would have been to completely suspend the income and payroll taxes for 6+ months and it would have cost about the same. Which do you think would have had a bigger economic impact? Over half of the stimulus went to bailing out state and local governments and tax breaks for people who never earned enough income to justify them. The "so-called" tax cuts were wealth transfer in the form of credits to people who don't pay taxes. They simply fill out a 1040 to get a check from Uncle Sam.

[bu villain]

Over half of the stimulus went to bailing out state and local governments and tax breaks for people who never earned enough income to justify them. The "so-called" tax cuts were wealth transfer in the form of credits to people who don't pay taxes. They simply fill out a 1040 to get a check from Uncle Sam.

I'm not arguing for bailing out state and local governments but wouldn't giving checks to the poorest people be one of the most effective forms of stimulus? It seems that people who are living relatively lean would be more likely to spend every dollar they got. I am firmly in the middle class and I remember when I got that check, it went straight to savings since I didn't need the cash.

[ek forever]

I'm not arguing for bailing out state and local governments but wouldn't giving checks to the poorest people be one of the most effective forms of stimulus? It seems that people who are living relatively lean would be more likely to spend every dollar they got. I am firmly in the middle class and I remember when I got that check, it went straight to savings since I didn't need the cash.

Why would giving money to the poorest people be the best form of stimulus?

Like I said, Why not have a 6 month long tax holiday? Everyone pays no taxes for 6 months.

Giving tax breaks to people who don't pay any taxes doesn't do any stimulating. It's redistribution. Something that the government should not do.

The idea that money needs to be spent immediately to fix the economy is misled too. Money invested and saved does a lot more for the economy than someone buying groceries. Money is multiplied very quickly by banks and lending institutions.

[bu villain]

Why would giving money to the poorest people be the best form of stimulus?

I don't think we know what the "best" form of stimulus is. I said I think it would be one of the most effective because poorer people would be more likely to spend extra income than wealthier people. The increased demand in goods would drive growth.

Like I said, Why not have a 6 month long tax holiday? Everyone pays no taxes for 6 months.

This would help but not as much as putting the money in the hands of the poor for same reason I stated above. Poorer people would likely to spend a larger percentage of any extra income than wealthier people.

Giving tax breaks to people who don't pay any taxes doesn't do any stimulating. It's redistribution. Something that the government should not do.

First of all money is redistributed by the government all the time. Taxes pay for many programs that not every tax payer uses. For example, I pay thousands of dollars in taxes that fund public schools but I don't have any kids. This is not to say redistribution is always a good thing by any means.

Second, everyone in this country pays taxes (just because they aren't income taxes doesn't mean they don't pay taxes). Why should stimulus money be tied to income taxes and not gas taxes, or sales taxes? Why should stimulus money be tied to any tax anyways? Stimulus money should be used to stimulate the economy, not to reward people for paying taxes?

The idea that money needs to be spent immediately to fix the economy is misled too. Money invested and saved does a lot more for the economy than someone buying groceries. Money is multiplied very quickly by banks and lending institutions.

Money invested is important for economies but tha't not the problem we have right now. Business are sitting on unprecedented levels of cash right now. Giving them more cash won't stimulate anything. Banks have plenty of money to lend right now too so that's not an issue either.

[BanginJimmy]

I'm not arguing for bailing out state and local governments but wouldn't giving checks to the poorest people be one of the most effective forms of stimulus? It seems that people who are living relatively lean would be more likely to spend every dollar they got. I am firmly in the middle class and I remember when I got that check, it went straight to savings since I didn't need the cash.

Giving people and corporations checks they didnt earn is what got us here to start with. Why would doing what put you in a horrible situation all the sudden get you out of it?

[BanginJimmy]

Money invested is important for economies but tha't not the problem we have right now. Business are sitting on unprecedented levels of cash right now. Giving them more cash won't stimulate anything. Banks have plenty of money to lend right now too so that's not an issue either.

And they are going to continue to sit on that cash until there is some type of stability in Congress. If I'm a business owner and I know my taxes are going up, even though I'm not sure when, then I'm not going to buy that bigger building that I could really use to expand my business. Because I'm not buying that new building, I dont have room to effectively use those new employees I need either. So for now, I will continue to sit on the cash I have, and am making, so that when the time is right to expand, maybe I can do it more with cash, instead of credit.


As a regular person, I'm also saving cash. I'm not buying that new house I want, even at these prices and low rates, because I dont know if the bottom is going to fall out again. I'm probably going to wait on that new car too because I can still get by with what I have and I have no clue what Congress is going to do in the coming years.

[.blank cd]

Why would giving money to the poorest people be the best form of stimulus?

Why wouldnt it? Poorer people would spend it on real goods, right now. Rich people would just save it. Money saved does nothing for the economy but make banks richer. Poor people buying more real goods will create jobs

[bu villain]

Giving people and corporations checks they didnt earn is what got us here to start with. Why would doing what put you in a horrible situation all the sudden get you out of it?

The problem wasn't that people didn't earn the money, it was that the money didn't really exist in the first place (i.e., it was on credit and largely based on false home values).

[bu villain]

And they are going to continue to sit on that cash until there is some type of stability in Congress. If I'm a business owner and I know my taxes are going up, even though I'm not sure when, then I'm not going to buy that bigger building that I could really use to expand my business. Because I'm not buying that new building, I dont have room to effectively use those new employees I need either. So for now, I will continue to sit on the cash I have, and am making, so that when the time is right to expand, maybe I can do it more with cash, instead of credit.

I agree that businesses being unsure of the operating environment is an issue, but it's not one that will be solved with a stimulus check.

As a regular person, I'm also saving cash. I'm not buying that new house I want, even at these prices and low rates, because I dont know if the bottom is going to fall out again. I'm probably going to wait on that new car too because I can still get by with what I have and I have no clue what Congress is going to do in the coming years.

Then you are part of the middle class and wouldn't be an effective way to use stimulus money. I said giving it to the poor would be effective. Their dilemma isn't to buy a new car or not, it's whether to fix the old beater they already have so they can get to the grocery store or their minimum wage job or to replace their kids shoes which are falling apart. They don't have the luxury of saving their money.

[BanginJimmy]

The problem wasn't that people didn't earn the money, it was that the money didn't really exist in the first place (i.e., it was on credit and largely based on false home values).

The govt gave corporations checks in the form of purchasing mortgage backed securities. The govt is giving people checks more directly in the form of larger tax refunds than the taxes paid to start with.


You are right though, the housing bubble inflated a lot of people's net worth with nothing more significant than numbers on a computer screen or piece of paper.

[BanginJimmy]

I agree that businesses being unsure of the operating environment is an issue, but it's not one that will be solved with a stimulus check.

Nothing is solved with a stimulus check. That has been proven already by several programs tried by the govt over the last 2 years. It may cause a temporary bump in spending, but as cash for clunkers proved, it is temporary and likely to result in a massive drop in spending the second the money runs out. Businesses are not going to hire more based on a bump they know is temporary.

Then you are part of the middle class and wouldn't be an effective way to use stimulus money. I said giving it to the poor would be effective. Their dilemma isn't to buy a new car or not, it's whether to fix the old beater they already have so they can get to the grocery store or their minimum wage job or to replace their kids shoes which are falling apart. They don't have the luxury of saving their money.

So you are saying that being part of the middle class means I'm not important enough to have some of the money I earned, but the HS dropout with 3 kids and a part time, minimum wage job IS important enough to have my money? Lenin would be proud.

[bu villain]

Nothing is solved with a stimulus check. That has been proven already by several programs tried by the govt over the last 2 years. It may cause a temporary bump in spending, but as cash for clunkers proved, it is temporary and likely to result in a massive drop in spending the second the money runs out. Businesses are not going to hire more based on a bump they know is temporary.

That is debateable. I agree much of the stimulus money was not used effectively (including cash for clunkers), but I wouldn't say that it hasn't helped at all. It's hard to argue that the world we live in is better or worse than the theoretical world that would have existed without that stimulus spending.

The economy is a cycle right? If people don't have money to buy, companies downsize and wages drop, which in turn makes it harder for people to buy, which in turn forces companies to downsize and wages drop, ad infinitum. In a good economy, it runs the opposite way. You say businesses won't hire more based on temporary bumps in spending but what is the alternative? You have to get the cycle going in the right way somehow.

So you are saying that being part of the middle class means I'm not important enough to have some of the money I earned, but the HS dropout with 3 kids and a part time, minimum wage job IS important enough to have my money? Lenin would be proud.

No I'm not saying that at all. I'm firmly in the middle class as well. You are making a moral argument, I am making an economic one. "Stimulus" refers to stimulating the economy and giving money to poor people will stimulate the economy more than giving it to the middle and upper classes. It isn't about who is more important than who.

[BanginJimmy]

That is debateable. I agree much of the stimulus money was not used effectively (including cash for clunkers), but I wouldn't say that it hasn't helped at all. It's hard to argue that the world we live in is better or worse than the theoretical world that would have existed without that stimulus spending.

It isnt debatable, its a fact. Cash for clunkers resulted in a massive uptick in new vehicle sales but the second the money ran out, so did the sales.

Here is the most unbiased article I can find.

http://www.edmunds.com/about/press/c...icleid=159446&

The economy is a cycle right? If people don't have money to buy, companies downsize and wages drop, which in turn makes it harder for people to buy, which in turn forces companies to downsize and wages drop, ad infinitum. In a good economy, it runs the opposite way. You say businesses won't hire more based on temporary bumps in spending but what is the alternative? You have to get the cycle going in the right way somehow.

This would be true if we lived in a word devoid of outside influences. Everything from the wildfires in Texas to the random govt programs add very different influences on the markets that will raise or lower demand for a product or service.

The cycle does have to turn, but there is no evidence that the govt can be the factor that turns the entire economy. This is why small businesses are where economies turn, whether up or down, because they have to be more reactionary to markets, whether they are temporary or not. Right now, there is no incentive for small businesses to expand because of the looming threat of tax hikes, obamacare, increased regulation, and increased oversight, especially in the manufacturing and financial sectors. Look at what the NRLB is doing to Bowing right now for all the proof you need on that.

No I'm not saying that at all. I'm firmly in the middle class as well. You are making a moral argument, I am making an economic one. "Stimulus" refers to stimulating the economy and giving money to poor people will stimulate the economy more than giving it to the middle and upper classes. It isn't about who is more important than who.

Again, there is absolutely ZERO proof that handing money to people will stimulate anything. As I have already stated, passing out a check may result in a temporary bump sales, but it will not result in a relevant bump in employment. Maybe you will see a small bump in temporary positions, but there will be nothing significant in long term, full time hiring.

[bu villain]

It isnt debatable, its a fact. Cash for clunkers resulted in a massive uptick in new vehicle sales but the second the money ran out, so did the sales.

Here is the most unbiased article I can find.

http://www.edmunds.com/about/press/c...icleid=159446&

Did you really read my response? I explicitly agreed with you that cash for clunkers was not an effective stimulus and yet you are still arguing as if I said it was.

This would be true if we lived in a word devoid of outside influences. Everything from the wildfires in Texas to the random govt programs add very different influences on the markets that will raise or lower demand for a product or service.

The cycle does have to turn, but there is no evidence that the govt can be the factor that turns the entire economy. This is why small businesses are where economies turn, whether up or down, because they have to be more reactionary to markets, whether they are temporary or not. Right now, there is no incentive for small businesses to expand because of the looming threat of tax hikes, obamacare, increased regulation, and increased oversight, especially in the manufacturing and financial sectors. Look at what the NRLB is doing to Bowing right now for all the proof you need on that.

I already agreed with you on the necessity of a stable business environment.

Again, there is absolutely ZERO proof that handing money to people will stimulate anything. As I have already stated, passing out a check may result in a temporary bump sales, but it will not result in a relevant bump in employment. Maybe you will see a small bump in temporary positions, but there will be nothing significant in long term, full time hiring.

So then why are you arguing about who should get "stimulus" money that won't stimulate the economy no matter where it goes?

[BanginJimmy]

So then why are you arguing about who should get "stimulus" money that won't stimulate the economy no matter where it goes?

I never said anyone should get any 'stimulus'. I'm to the point where I think govt handouts are a luxury this country cannot afford.

[bu villain]

I never said anyone should get any 'stimulus'. I'm to the point where I think govt handouts are a luxury this country cannot afford.

Stimulus programs are definitely risky. However doing nothing has its own risks (the economy could remain stagnant indefinitely). I don't think anyone knows for sure what is the best thing to do because it all depends on a number of subjective assumptions (effectiveness of stimulus, inflationary outcome, other market factors, etc). Of course we should still continue to debate it and use the data we do have to make our best judgements.

[BanginJimmy]

Of course we should still continue to debate it and use the data we do have to make our best judgements.

This is why I am against any type of stimulus. We have seen 3, I think, stimulus packages come out of DC in the last years and none of them have had any affect. At this point, I believe that cash flow isnt the reason the economy is stagnant. IMO, the problem at this point is all of the uncertainty. Until we get a clear, long term plan out of DC stagnation will continue. Add to that all of the concerns coming out of Europe and I completely understand why expansion has been basicly nonexistant.