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Thread: US Economy continues to slump

  1. #1
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    Default Standard and Poors Downgrade US from AAA to AA+ : Treasuries Downgraded

    http://www.marketwatch.com/story/sp-...1-04-18-910460

    The US economy has looked overextended for years and the problem of rocketing national, state and personal debt won't go away.

    WASHINGTON (MarketWatch) -- Standard & Poor's cut its ratings outlook on the U.S. to negative from stable while keeping its Triple-A rating on the world's largest economy. "More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures," said Standard & Poor's credit analyst Nikola G. Swann. U.S. stock futures plunged on the news, with Dow industrial futures falling 167 points.
    Does anyone remember when we were AAA + ?
    Last edited by C. Flower; 06-08-2011 at 07:24 AM.

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    I do not accept that Ireland, Anglo, AIB and Bank of Ireland are not at least AAA

    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    The US will have to come up with a very good recovery plan to fight this and again it is long overdue. Let's hope China doesn't decide to release a few dollars into the market.

    From a European point of view France and Germany will be shaken by this. I wonder how much money they can get through the back door to aid Spain. The front door doesn't seem like an option anymore.

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    A bit of music is appropriate here I think...cos there is no way they'll ever be able to pay the debt and even a slight increase in the interest rate will ***** them...


    [ame="http://www.youtube.com/watch?v=aGmAmJFUvzM"]http://www.youtube.com/watch?v=aGmAmJFUvzM[/ame]
    Нооруз пиээ пурылыа выиттыа


    'Our goal is to conquer state power for the Irish working class'
    Pat Rabitte, 1987

    "Can I ask whether this is what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side?"
    Michael Noonan, November 2010

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    Quote Originally Posted by ang View Post
    The US will have to come up with a very good recovery plan to fight this and again it is long overdue. Let's hope China doesn't decide to release a few dollars into the market.
    The US is finished. A country can only exist to feed an army for so long before it collapses. We should be shifting our economic focus to the East to avoid being dragged down with it.

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    We agree on this Biffo. China was playing monopoly around the world while the US started believing its own hype and played Risk- badly.

    The only thing that can stop the Chinese making this century the first of the Dragon Centuries is if they take their eye off the steam gauge on their economy. I note lately there was a significant drop in Beijing property prices (something like 25% or more in one month) but that could just as easily be the Chinese themselves applying the brakes.

    Overall since the fall of the Berlin Wall the Chinese have been playing a magnificent strategic game while the Americans were trying to use their military to steal access to resources out of which they are running pretty quickly.

    The classic Moscow problem is now in evidence where the US is stretched everywhere and the resources to continue military adventurism are gutting the US economy.

    If the Chinese can maintain what they are doing they will be able to apply the political coup de grace within the next couple of years I reckon.
    Think National. Act Local. Oh- and superstition is just the dark matter of human history.

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    Quote Originally Posted by Baron von Biffo View Post
    The US is finished. A country can only exist to feed an army for so long before it collapses. We should be shifting our economic focus to the East to avoid being dragged down with it.
    I think FG or FF (they are the same) are backing the wrong horse alright



    Also, we need to consider just how desperate the Fed is. QE 1 saw the Fed pumping $50 billion per month into the financial system. QE 2 saw $100 billion. Now we’re at $200 billion per month.



    And people are even debating whether the Fed can tackle the Crisis? Folks, the Fed is losing control by the month (QE 1 lasted over a year). QE 2 has only been going five months and already the Fed is DOUBLING the amount of money it puts into the system!?!?



    In plain terms, the Fed is losing its grip on the markets. I don’t know when the currency markets will say “enough” but when they do the collapse of the US Dollar will be rapid and violent. This is not conjecture, this is FACT: Weimar Germany’s hyperinflation exploded onto the scene .
    http://www.zerohedge.com/article/fed...-billion-month
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    Quote Originally Posted by Baron von Biffo View Post
    The US is finished. A country can only exist to feed an army for so long before it collapses. We should be shifting our economic focus to the East to avoid being dragged down with it.
    Wouldn't disagree with that Baron.

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    Default Re: Moodys Downgrade US to Negative - http://www.marketwatch.com/story/sp-cuts-us-ratings-outlook-to-negative-2011-04-18-9104

    Quote Originally Posted by Baron von Biffo View Post
    The US is finished. A country can only exist to feed an army for so long before it collapses. We should be shifting our economic focus to the East to avoid being dragged down with it.
    But 'trading' on the 'plutonium standard' does have its advantages. It requires a world war to make them plain though. Look at what WWII did for the economic dominance of the United States post-war. We are only coming to the end of that era now.
    "It is we the workers who built these palaces and cities here in Spain and in America and everywhere. We, the workers, can build others to take their place. And better ones! We are not in the least afraid of ruins. We are going to inherit the earth; there is not the slightest doubt about that. The bourgeoisie might blast and ruin its own world before it leaves the stage of history. We carry a new world here, in our hearts."
    — Buenaventura Durruti

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    Default Re: Moodys Downgrade US to Negative

    Note, the Thread Title says Moodys downgrades, wrong, they did no such thing. It was S&P who issued the “alert”. Moodys in fact said the opposite. Minor error, could happen to a bishop.

    More significantly, I always have a chuckle when I see CF quoting WSJ. Granted, WSJ has a fine reputation in its news division, while its editorial pages have always been hard right wing. Now that it’s owned by Rupert Murdoch, I avoid it as much as possible, in favor of Bloomberg or IBD. I wish others would do likewise.

    To the larger point, that seems to have been missing in some of the “uninformed” commentary that followed the OP. Nothing was officially downgraded. In moving from stable to negative all S&P were saying is that they had increased the likelihood, (perhaps to one in three), that they would downgrade in the future. The issue is considered as much a political problem as a financial/economic one. If the politicians change the direction of the trends, the issue will recede. S&P said they did not believe that would happen until after the 2012 elections. Nothing extraordinary there. Dow initially opened 2% down, but finished 1% down. Markets calm.

    http://www.washingtonpost.com/busine...y.html?hpid=z2

    Not to minimize the fiscal and budgetary problems facing the US, they are very significant, but only a fool would suggest that military spending cuts alone, would solve the problem. Military spending is about 20% of budget, and 4% of GDP. Medicare, Medicaid, and Social Security account for 60%. Transport, Education, Agriculture etc. the remaining 20%. To understand why the rest is so small, remember the, Fed Dept. of Ed. employs no teachers, that is left to the states. The alternative, would be like having Irish Primary School teachers paid by Brussels.

    US policy makers have recognized since about 1995 that on current trends China will overtake the US as the world’s largest economy sometime around 2030. It’s already the largest car market. The debate in the US, is how to remain the world’s smartest economy. It’s not going very well.

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    Default Re: Standard and Poors Downgrade US to Negative

    Dead on Count B. I've changed the thread title and now everyone will think that the US has been "not downgraded" again today. But it had to be done.

    We've heard that "smart economy" line here in Ireland. It is meaningless. The Chinese economy, based on new generation technology and plant, and many millions more graduates, will be smarter.

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    Default Re: Standard and Poors Downgrade US to Negative

    2030? Ha ha ha .... agree on the WSJ comments it is a decent investigative paper when it wants to be but is not above propogandising for the Street and for Washington politically and is commonly used by AIPAC for propaganda purposes.

    I'm aware that it was S&P rather than Moodys but equally the announcement wouldn't have been made at all if there wasn't an underlying point to make so the difference between downgrading and preparing to downgrade means little as the discounting for that event will happen anyway.

    I think the Americans are talking '2030' on the basis of believing their own official hype about the remarkable wheat harvests they are having ... it isn't an issue that is in American hands anyway. Effectively the Chinese can dump dollars onto the world's currency market anytime they like or a simple announcement like pegging the yuan to either the euro or deutschmarkII would send the US into a tailspin.

    Same as Reagan did to the Soviet economy. Not much the Americans can do about it either as the timing is in China's hands. Its only really dawned on US policymakers in Washington during the second Bush pregnancy and is only beginning to impinge on the general US consciousness in the last two years.

    Most Americans are under the misguided notion that China is learning capitalism- the Chinese were expert at least domestically in economics when buffalo and native Americans roamed across where St Louis is now.
    Last edited by Captain Con O'Sullivan; 19-04-2011 at 08:11 AM.
    Think National. Act Local. Oh- and superstition is just the dark matter of human history.

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    Default Re: Standard and Poors Downgrade US to Negative

    Quote Originally Posted by Captain Con O'Sullivan View Post
    2030? Ha ha ha .... agree on the WSJ comments it is a decent investigative paper when it wants to be but is not above propogandising for the Street and for Washington politically and is commonly used by AIPAC for propaganda purposes.

    I'm aware that it was S&P rather than Moodys but equally the announcement wouldn't have been made at all if there wasn't an underlying point to make so the difference between downgrading and preparing to downgrade means little as the discounting for that event will happen anyway.

    I think the Americans are talking '2030' on the basis of believing their own official hype about the remarkable wheat harvests they are having ... it isn't an issue that is in American hands anyway. Effectively the Chinese can dump dollars onto the world's currency market anytime they like or a simple announcement like pegging the yuan to either the euro or deutschmarkII would send the US into a tailspin.

    Same as Reagan did to the Soviet economy. Not much the Americans can do about it either as the timing is in China's hands. Its only really dawned on US policymakers in Washington during the second Bush pregnancy and is only beginning to impinge on the general US consciousness in the last two years.

    Most Americans are under the misguided notion that China is learning capitalism- the Chinese were expert at least domestically in economics when buffalo and native Americans roamed across where St Louis is now.
    GDP per capita has gone up steadily (leaving aside the current recession) but in the last 30 years the incomes of the average American have flat lined. The IMF and pretty well everyone else in economics knows that this increasing inequality, with the rich minority owning capital and getting richer, is one of the main reasons for the crash, but they're not going to do anything about it, as that rich minority runs everything, including the IMF.



    Last edited by C. Flower; 19-04-2011 at 09:28 AM.

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    Default Re: Standard and Poors Downgrade US to Negative

    The long term trend is interesting.






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    Default Re: Standard and Poors Downgrade US to Negative

    The US burst onto the scene and pretty well was a quarrying out exercise of resources from 1800 on - vast supplies of timber and oil and virgin top soil.

    That advantage is (literally) burning off now, although they still get about 50% of their oil at home. On present trends, it won't be too long before India and China produce 50% of the world's GDP.

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