The Tea Party downgrade

[eavesdropper]

[quote=svelte]Back on topic, it looks like many are coming to the conclusion that S&P lacks credibility and has less than pure motivations:

http://finance.yahoo.com/blogs/daily-ticker/p-slammed-u-downgrade-174205361.html

“S&P is the world’s largest ratings agency. In most cases, its business model is based on charging the issuers of debt–private corporations, local and state governments, for instance–in exchange for a rating. The issuer then uses a positive rating to give investors confidence in the solidity of the investment. But S&P also rates the debt of 126 countries. And, like many of the countries whose debt is rated by S&P, the United States neither requests nor pays for its rating.”

They get their income from the companies they rate. Yeah, no incentive to shade the grades there…[/quote]

Even if S & P went ahead and did this as as an ethical and moral obligation to their clients (as they claim), the risk of post-downgrade fallout was tremendous. Even if their reasoning is sound, and within the parameters of their professional duty (which I seriously question), there was NO need to downgrade at this point in time. S & P supposedly follows a list of 5 considerations in grading, and they obviously did not do so. If they had, they could have only come to the conclusion that the likelihood of U.S. default in the foreseeable future is less than miniscule.

It’s apparent that they did not recognize the potential of repercussions of enormous international impact. Or they did recognize it, and chose to go ahead and downgrade anyway.

Either one is not a quality that I would include in my firm’s marketing materials.

Entrepreneurs, take heed. Business start-up opportunity in Aisle 6 (aka 55 Water Street, New York). Doesn’t require intellect, but believing your own bullshit is a must.

[briansd1]

eavesdropper, I agree that S&P should not have downgraded out debt. They should have weighted their 5 criteria more judiciously.

S&P downgraded our debt because of lack of political predictability, not because they question our ability to pay.

They said so themselves.

[briansd1]

eavesdropper, I agree that S&P should not have downgraded out debt. They should have weighted their 5 criteria more judiciously.

S&P downgraded our debt because of lack of political predictability, not because they question our ability to pay.

They said so themselves.

[briansd1]

eavesdropper, I agree that S&P should not have downgraded out debt. They should have weighted their 5 criteria more judiciously.

S&P downgraded our debt because of lack of political predictability, not because they question our ability to pay.

They said so themselves.

[briansd1]

eavesdropper, I agree that S&P should not have downgraded out debt. They should have weighted their 5 criteria more judiciously.

S&P downgraded our debt because of lack of political predictability, not because they question our ability to pay.

They said so themselves.

[briansd1]

eavesdropper, I agree that S&P should not have downgraded out debt. They should have weighted their 5 criteria more judiciously.

S&P downgraded our debt because of lack of political predictability, not because they question our ability to pay.

They said so themselves.

[aldante]

Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?

[aldante]

Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?

[aldante]

Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?

[aldante]

Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?

[aldante]

Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?

[briansd1]

[quote=aldante]Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
[/quote]

S&P did not downgrade us because we are in bad financial shape (in relation to other countries S&P rates AAA). It’s all relative.

The “terrible shape” it the political brinkmanship the Tea Party created what will require a flight every time a debt limit rise is necessary.

S&P said the downgrade “reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.

[quote=aldante]
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?[/quote]

No I don’t blame the market. The market and government are joined at the hips. Ratings are important because they affect portfolio management.

I don’t blame the markets either for jumping when the Fed announces Quantitative Easing, low interest rates or other beneficial intervention . The markets look to government for guidance. Moreover, the markets expect the government to intervene to improve economic performance.

[briansd1]

[quote=aldante]Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
[/quote]

S&P did not downgrade us because we are in bad financial shape (in relation to other countries S&P rates AAA). It’s all relative.

The “terrible shape” it the political brinkmanship the Tea Party created what will require a flight every time a debt limit rise is necessary.

S&P said the downgrade “reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.

[quote=aldante]
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?[/quote]

No I don’t blame the market. The market and government are joined at the hips. Ratings are important because they affect portfolio management.

I don’t blame the markets either for jumping when the Fed announces Quantitative Easing, low interest rates or other beneficial intervention . The markets look to government for guidance. Moreover, the markets expect the government to intervene to improve economic performance.

[briansd1]

[quote=aldante]Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
[/quote]

S&P did not downgrade us because we are in bad financial shape (in relation to other countries S&P rates AAA). It’s all relative.

The “terrible shape” it the political brinkmanship the Tea Party created what will require a flight every time a debt limit rise is necessary.

S&P said the downgrade “reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.

[quote=aldante]
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?[/quote]

No I don’t blame the market. The market and government are joined at the hips. Ratings are important because they affect portfolio management.

I don’t blame the markets either for jumping when the Fed announces Quantitative Easing, low interest rates or other beneficial intervention . The markets look to government for guidance. Moreover, the markets expect the government to intervene to improve economic performance.

[briansd1]

[quote=aldante]Brian
S&P can downgrade us anytime. They are their own company. Your arguement all along has been so annoying.
*******If the country was not in such a terrible situation it never would have been faced with a downgrade. ********
[/quote]

S&P did not downgrade us because we are in bad financial shape (in relation to other countries S&P rates AAA). It’s all relative.

The “terrible shape” it the political brinkmanship the Tea Party created what will require a flight every time a debt limit rise is necessary.

S&P said the downgrade “reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.

[quote=aldante]
If the market did not have at least some recognition that S&P has some reason for the downgrade the market would not have reacted.
Now do you want to blame the “market”?[/quote]

No I don’t blame the market. The market and government are joined at the hips. Ratings are important because they affect portfolio management.

I don’t blame the markets either for jumping when the Fed announces Quantitative Easing, low interest rates or other beneficial intervention . The markets look to government for guidance. Moreover, the markets expect the government to intervene to improve economic performance.

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