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Varchild2008 (84.02)

They Don't Have the GUTS to lower America's Credit Rating



June 22, 2010 – Comments (15) | RELATED TICKERS: FNMA , GE

How many times this year and last year as a credit agency *threatend* to lower America's credit rating?  Countless!!!   From Moody's to you name it....

But...None of them have the SPINE and fortitude to actually do it.  Not 1 notch....not even half of 1.

Am I rooting here for America's credit rating to slip?  You bet.....  But, before you accuse me then of rooting for America's demise....  Here's my reasoning..

Some one such as Moody's or Fitch or S&P gets off their behinds and lowers America's credit rating, especially on the grounds that America DOES NOT HAVE A BUDGET and is spending gobs and gobs of more money trying to incorporate Doctor Fix + Obamacare Benefits earlier than they were written in the law CBO scored....... 

Remember the $120 Billion dollar  yet another Stimulus Package that just recently got shot down by the Republican Filibuster?

That's good news..... shutting down the insane spending.....

But that is paultry compared to what will happen when Insurance Company's are forced to accept people nearly 30 as "CHILDREN" that are entitled to their Mommies and daddies health care insurance policy.

All of this....Doctor Fix + this Obamacare Benefits EARLY business going on well after the most recent MOODY's threat to lower America's credit score.... All of this going on.. No Budget..... No Responsibility..... No Accountability.....

And the Credit Agencies just sit there and DAWDLE????

The only way I firmly believe America will get their senses back is if they get a Massive Wakeup call from all 3 Credit Agencies lowering America's Credit Score..

Knock the Score down...... force America to cut spending....and exercise SMART FISCAL budgeting.

Right now we are on a Roller Coaster Ride to Insolvency.    Much like (GE) (FNM)  and (FME) before they were all bailed out.   Except.... There is no BAIL OUT other than the Credit Agencies pulling the trigger here and getting the FEDs to React.

15 Comments – Post Your Own

#1) On June 22, 2010 at 9:32 PM, atarigod (< 20) wrote:

You are 100% correct. No one has the stones to set off that epic panic.

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#2) On June 22, 2010 at 9:42 PM, Varchild2008 (84.02) wrote:

It would be Flash Crash to the 10th degree.....  Might have ourselves a "Wall Street Holiday" as the circuit breakers kick into gear shutting down the trading and no one wants to turn them back on.

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#3) On June 22, 2010 at 10:13 PM, ozzfan1317 (68.94) wrote:

We need to do the unthinkable actually have a budget and cut out wasteful spending unfortunately both parties are too busy sneaking their buddys payoffs to do anything about that. I bought into the change speeches this isnt the change I though I was voting for.

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#4) On June 22, 2010 at 11:45 PM, bigcat1969 (80.77) wrote:

Why would they?  What other reserve currency is better right now?  The Euro is shot, Japan has been stringing itself along for two decades and China cares only for itself.  Lets face it the world is in a depression and there aren't exactly a lot of options.  America can pay its debts by opening the printing presses if it must, the Euro can't really be printed on that scale, Japan wouldn't dare and who knows what China wants to do.  Of the giants America has a tradition dating back really to the last depression, while Japan and China might go back a couple decades at most in a reserve role and the Euro is an infant.

There is no better reserve currency and for now that is why America survives in its current role as mega-country.

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#5) On June 23, 2010 at 1:12 AM, SnapDave (48.38) wrote:

Not sure if that's why they won't do it.  Remember recently when Germany decided naked shorts were a bad thing.  It was the right move at exactly the wrong, most obviously self serving time.  Imagine the US government pulling a similarly embarrasing move by suddenly deciding ratings agencies need serious reform - right after such a downgrade.  
I don't know if I should laugh or cry. 

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#6) On June 23, 2010 at 6:28 AM, cthomas1017 (98.52) wrote:

No offense, but I'm constantly amazed when people say "this isnt the change I though I was voting for".  I hear that a couple of times a week now, and too often it's people that I tried to warn what was coming.  The scariest part is that some of them don't remember our conversations and my warnings.

I've taught my children to listen with their eyes.  Every indication was that this president was going to do exactly what he's done and exactly what he will continue to do.  When one watches what a person does rather than what they say they are going to do, the truth is so very apparent.  Golf anyone?

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#7) On June 23, 2010 at 6:37 AM, cthomas1017 (98.52) wrote:

Oh, and a credit rating should be given because of its merits and its risks.  It's not there to teach a lesson or to encourage some particular fiscal policy.  From the standpoint of what the credit agencies rate, the US debt is easily secured as long as Treasury can print and the Fed can regulate reserves.

There's a more fundamental way to change and that comes in November - and thereafter when we suffer the consequences of the decisions of a few.  Fundamental change will come about because of the principles & values written into the Constitution which is at the mercy of a self-absorbed and consumer driven society.  The outcome, the so called end-game, depends on the innate goodness of the American people.  And I have a fundamental belief in us.

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#8) On June 23, 2010 at 4:09 PM, Varchild2008 (84.02) wrote:

Without a Credit Score lowering we will only be able to print up to the point at which printing can not help us anymore.

At some point America's debt will grow on a monthly obligation basis so big that there's no realistic way to print enough money to make the payments.

The Credit Agencies can dawdle and dawdle along refusing to lower the credit score until America reaches this abysmmal state of finance..... Or they can get the GUTS to lower the score (NOW) in anticipation that we will reach this level of crisis if we continue to do nothing about it for the next 5 years.

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#9) On June 23, 2010 at 5:53 PM, bigcat1969 (80.77) wrote:

There has to be a top rating.  If you don't want the US to have it who should have it.  Its kind of like grading on a curve, who is the A+?  For now there is NO safer investment than US T-bills.  So we are the top rating.

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#10) On June 23, 2010 at 6:34 PM, Varchild2008 (84.02) wrote:

Why does there have to be a TOP Rating assigned automatically to a country?

A+ should be a *GOAL* that ALL countries should be held accountable to achieve...  All Countries should want to aspire to become an A+ credit country.

No country deserves an A+ just cause you want 1 country to have that rating.  If you use that logic then what meaning does A+ credit rating have?

What does A+ mean..... if Credit Agencies are reduced to assigning that top rating to basically the "Best WORST" country in the World that has historically done "Least bad?"

I don't want A+ to equal =  LEAST BAD

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#11) On June 24, 2010 at 12:33 AM, bigcat1969 (80.77) wrote:

Because you can't downgrade everybody.  How many countries are more viable investments in isolation than they were 2 years ago?  How many companies and really how many banks?  Almost everyone is a 'worse' investment today than they were before the crash.  Still many fund managers have to invest in certain quality or above sorts of securities.  If everybody got knocked down to what the debt versus worth ratio should be based on real value (not mark to market), the whole bleeding system would fall apart.  How many companies and countries should be rated junk on a long term outlook?  Who would buy the junk bonds?  The Euro bank folks had to suspend the rules to take first Greece and then who knows whos IOUs because the ratings had slipped so far.  Unless the ratings folks want to admit that they are completely wrong and watch interest rates skyrocket to reflect real world default rates in the next decade, things have to stay somewhat stable.  Housing fell 33% month over month to the lowest numbers ever after the government covering your down payment program expired, can you imagine what they would do based on a rate of 15% versus 5%?  California, New York and others are trash, but they cannot function without the ability to borrow, the governments would shut down.  Borrowing from banks is virtually still frozen even with interest rates as low as they can go, crank up the rates and it all falls apart into a worldwide crises that makes the 30s look like nothing.

Sorry for the rambling post, I'm a bit tired.  Yeah I wish we all had good fiscal policy and yes the US may be in long term trouble, but downgrading the credit rating of the whole world is not the place to start.

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#12) On June 24, 2010 at 6:29 PM, Varchild2008 (84.02) wrote:

Of course you can downgrade everyone if everyone is in serious debt!!!!

That is if you want to be a serious.....resonsible....Credit Agency with a Credit System that treats everyone equally based on a standard that is easy to understand and contains no biases.

You throw the whole credit system out of whack by refusing to downgrade everyone at a time in which everyone deserves to be downgraded.

What is the problem with downgrading everyone anyhow? Where's the panic?  Where's the hair pulling?

If a baseball team fails to win the World Series we don't hand a World Series ring to the Pitcher of the Losing Team just cause

"You have to give a ring to someone on the team!"

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#13) On June 24, 2010 at 10:30 PM, bigcat1969 (80.77) wrote:

Err under your theory they call the World Series on account of terrible play, don't have a winner and pawn the rings.

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#14) On June 25, 2010 at 4:45 PM, Varchild2008 (84.02) wrote:

Err that would be YOUR theory.  I was making an anology based on your belief that we should keep on trucking with a dysfunctional credit ratings system in which the LOSER gets an A+ rating despite being deeply in Debt  (just cause someone has to have a A+ rating).

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#15) On June 25, 2010 at 4:47 PM, Varchild2008 (84.02) wrote:

Consider my anology....

You have a Pitcher who LOST but because his performance was better than every other teammate, he gets a A+ rating / World Series Ring..... anyhow..... despite still being a loser...

That is what is going on with America.....  We have a backbreaking debt and piles of Interest Payments on the debt that America couldn't possibly pay off.....

And yet we still are given an A+ rating?  Despite being LOSERS in the game of Financial Health?  (which is what I thought Credit Ratings were about)?

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