$189,000 That’s the astounding amount each of us owes for our national debt and unfunded entitlements
That’s the astounding amount each of us owes for our national doubt and unfunded entitlements
“Forget President Obama’s speech on Tuesday night, the current state of our union can be summed up in just two words: We’re broke.
The president devoted just 189 words to the deficit and our growing national debt, but the fact is that once again this year we will borrow 32 cents out of every dollar we spend. Overall, our national debt now tops $15.2 trillion (with Congress raising the debt ceiling to $16.4 trillion last week). And that doesn’t count the unfunded liabilities of Social Security and Medicare. Throw those in, and our total indebtedness exceeds $120 trillion.”
Via NY Post
“Following years of pandering to client demands, and assigning trillions of dollars in fixed income securities with whatever rating money bought (among other things, a factor to the credit bubble and its subsequent implosion) S&P finally tried to do the right thing and tell the truth. However in this case it picked if not the worst, then certainly the most hypocriticial credit in the world to expose – the US itself. Sure enough two weeks after the downgrade, someone made the phone call and the CEO Deven Sharma is no more. As for the kick square in the gonads: Sherma will be replaced with the COO of…you know it… the bank which demanded tens of billions in secret Fed bailout loans itself, Citibank, and whose existence is inextricably tied to America not seeing any more downgrades ever again.
As the FT reports, “The McGraw-Hill board made the decision to replace Mr Sharma at a meeting on Monday, where it also discussed an ongoing strategic review.” Alas, this is nothing but a case study of modern corporate reality in America: if you are not with the status quo, you are against it, and you are promptly booted out of it: anyone who does not share the visions of one glorious future built on ponzi schemes, houses of cards, and games of three card monte, will be promptly suicided, either physically or professionally.”
Via Zero Hedge
“The ridiculous war between Obama and S&P, which escalated last night following disclosure by the NYT that S&P was being investigated for its muni ratings, has just taken another turn for ths surreal after S&P announced that it would most likely downgrade munis as soon as the final US budget is finalized. Granted that could very well mean never. To quote S&P: “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. Either of these outcomes could potentially weaken our view of certain individual credit profiles of obligors across the sector.” “
Via Zero Hedge
“The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews. “
One criminal organization investigates another the second criminal organization downgraded the first
“In the wake of the stock-market plunge and S&P downgrade, economic pundits of all stripes are rushing to explain events. But as so often happens in economics, “believing is seeing.” Keynesians, monetarists, and Austrians can all look at the slow-motion train wreck and feel vindicated by the data.
Of the major schools of economic thought, the Austrians have been the best guides through the crisis. But the champion Keynesian, Paul Krugman, has been running victory laps for a long time now, claiming that he has been right while the free-market folks have been dead wrong. His column late last week beautifully illustrates that the facts can always be molded to fit a preconceived narrative.”
A 634 Point Stock Market Crash And 8 More Reasons Why You Should Be Deeply Concerned That The U.S. Government Has Lost Its AAA Credit Rating
“Are you ready for part two of the global financial collapse? Many now fear that we may be on the verge of a repeat of 2008 after the events of the last several days. On Friday, Standard & Poor’s stripped the U.S. government of its AAA credit rating for the first time in history. World financial markets had been anticipating a potential downgrade, but that still didn’t stop panic from ensuing as this week began. On Monday, the Dow Jones Industrial Average dropped 634.76 points, which represented a 5.5 percent plunge. It was the largest one day point decline and the largest one day percentage decline since December 1, 2008. Overall, stocks have fallen by about 15 percent over the past two weeks. When Standard & Poor’s downgraded long-term U.S. government debt from AAA to AA+, it was just one more indication that faith in the U.S. financial system is faltering. Previously, U.S. government debt had a AAA rating from S&P continuously since 1941, but now that streak is over. Nobody is quite sure what comes next. We truly are in unprecedented territory. But one thing is for sure – there is a lot of fear in the air right now.”
“Anyone just waking up and noticing futures trading just barely below the closing print may get the impression that things are fine. They are not. Here is what has happened overnight as the global central planning cartel does everything in its power to prevent the global market rout, which has so far wiped out $7.8 trillion in market value around the world, from morphing into the catalyst that ends the status quo. To wit: ECB resumes buying Italian and Spanish bonds (UniCredit says the bank is losing a “game of chicken” with lawmakers by not holding out for budget cuts and higher taxes, and may eventually need to print money), the G-20 is prepared to take joint measures to stem a global crisis, Brazilian Finance Minister Guido Mantega said. Greece’s securities regulator banned all short-selling on the Athens exchange for two months starting today. Taiwan’s government bought stocks yesterday and this morning through four funds it controls. South Korea’s regulator asked pension funds, brokerages and asset-management companies to step up efforts to stabilize the market. South Korea also bans short selling for three months starting August 10. And lastly, rumors of an emergency Fed announcement are ripe. So… after all this global cartel intervention, is it any wonder that futures staged a near vertical move up overnight?”
Via Zero Hedge
“America’s credit rating was punished by S&P because US politicians failed to reach an adequate solution to the country’s massive debt woes which are nearing 100% of GDP. Investors reacted by buying the Japanese yen– a country whose sovereign debt rating is two steps below the US, and at 220% of GDP, over twice as indebted!
Not to mention, Japan has burned through 4 prime ministers and 8 finance ministers just in the last four years. This is not exactly a country whose government has a successful track record of dealing with its problems.
How does this make any sense? That’s like firing an employee who gets drunk on the job and replacing him with a gun-toting heroin addict. Yet faced with a universe of bad choices, investors will pick the one which appears to be the ‘least worse’.”
Via Sovereign Man
“The US Federal Reserve’s meeting on Tuesday is likely to be one of its most difficult and divisive since, well, last August.
Sharply weaker economic data in recent weeks, a new peak in the eurozone debt crisis, and a downgrade to the triple A credit rating of the US have shaken confidence in a way that could spiral towards a new recession. The Fed will be forced to consider fresh stimulus in response.”
“But, despite those recent shocks, Fed policymakers still have reasons to think that growth should pick up later in the year. Oil prices are now about $25 a barrel below their springtime peak; supply chain disruption from the Japanese tsunami should fade; and, unlike last summer, inflation is close to target and has been rising, not falling. “
Via Financial Times
“Officials at Standard & Poor’s are downgrading the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt.
The agency says it has also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options.
All the downgrades were from AAA to AA+. S&P says the agencies and banks all have debt that is exposed to economic volatility and a further downgrade of long-term U.S. debt.”