Discussion
WASHINGTON (Reuters) - Ratings agency S&P's decision to downgrade its credit outlook for the United States was a political judgement, White House economic adviser Austan Goolsbee said Monday.
Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision. He said the United States would achieve a long-term agreement on reducing the U.S. budget deficit."
So rating agency or government? Not sure I'd want to trust either of them!
Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision. He said the United States would achieve a long-term agreement on reducing the U.S. budget deficit."
So rating agency or government? Not sure I'd want to trust either of them!
Fittster said:
WASHINGTON (Reuters) - Ratings agency S&P's decision to downgrade its credit outlook for the United States was a political judgement, White House economic adviser Austan Goolsbee said Monday.
Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision.
The US can't bomb/attack S & P Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision.
.So what happening with China's ratings?
Mermaid said:
Fittster said:
WASHINGTON (Reuters) - Ratings agency S&P's decision to downgrade its credit outlook for the United States was a political judgement, White House economic adviser Austan Goolsbee said Monday.
Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision.
The US can't bomb/attack S & P Speaking on MSNBC and CNBC television, Goolsbee said the White House did not agree with the S&P decision.
.So what happening with China's ratings?
Puggit said:
Looking at the GBP:EUR conversion rate, it appears the market isn't convinced about the UK either. Last week saw Portugal in trouble and better than expected UK inflation figures, and the pound still lost ground!
Are you sure that wasn't to do with lower than inflation figures meaning that rate rises are less likely?Fittster said:
"NEW YORK (AP) -- Stocks are falling sharply lower after Standard & Poor's dropped its outlook on U.S debt quality to negative.
Even as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
That takes big ballsEven as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
NoelWatson said:
Fittster said:
"NEW YORK (AP) -- Stocks are falling sharply lower after Standard & Poor's dropped its outlook on U.S debt quality to negative.
Even as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
That takes big ballsEven as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
I thought the Chinese rating agency had downgraded the US a while ago. I don't know how much credibility the Chinese rating agency has in the wider world but considering that a lot of US bonds are bought by the Chinese I thought they may have some influence.
"One of China’s leading credit rating agencies has downgraded United States of America government debt in response to what it sees as deliberate devaluation of the dollar by quantitative easing and other means.
If China, now the second biggest economy in the world, stops buying US government bonds this could have a very negative effect on the global recovery. The Dagong Global Credit Rating Company analysis is highly critical of American attempts to borrow their way out of debt. It criticises competitive currency devaluation and predicts a “long-term recession”.
Dagong Global Credit says: “In order to rescue the national crisis, the US government resorted to the extreme economic policy of depreciating the U.S. dollar at all costs and this fully exposes the deep-rooted problem in the development and the management model of national economy."
http://blogs.telegraph.co.uk/finance/ianmcowie/100...
NoelWatson said:
Puggit said:
Looking at the GBP:EUR conversion rate, it appears the market isn't convinced about the UK either. Last week saw Portugal in trouble and better than expected UK inflation figures, and the pound still lost ground!
Are you sure that wasn't to do with lower than inflation figures meaning that rate rises are less likely?HMG seem hell-bent on finding any 'excuse' to keep rates low and avoid the very distinct hazard of a second dip.
Fittster said:
NoelWatson said:
Fittster said:
"NEW YORK (AP) -- Stocks are falling sharply lower after Standard & Poor's dropped its outlook on U.S debt quality to negative.
Even as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
That takes big ballsEven as it cut its outlook, the agency reaffirmed the U.S. debt rating itself at AAA."
So maybe we won't just see small European countries get in trouble.
I thought the Chinese rating agency had downgraded the US a while ago. I don't know how much credibility the Chinese rating agency has in the wider world but considering that a lot of US bonds are bought by the Chinese I thought they may have some influence.
"One of China’s leading credit rating agencies has downgraded United States of America government debt in response to what it sees as deliberate devaluation of the dollar by quantitative easing and other means.
If China, now the second biggest economy in the world, stops buying US government bonds this could have a very negative effect on the global recovery. The Dagong Global Credit Rating Company analysis is highly critical of American attempts to borrow their way out of debt. It criticises competitive currency devaluation and predicts a “long-term recession”.
Dagong Global Credit says: “In order to rescue the national crisis, the US government resorted to the extreme economic policy of depreciating the U.S. dollar at all costs and this fully exposes the deep-rooted problem in the development and the management model of national economy."
http://blogs.telegraph.co.uk/finance/ianmcowie/100...
It's beautiful man, beautiful.
The apes in DC are hoist by their own petard.
They could, in defense of their policy, point out how useless and corrupt S&P have been over the past decade when it came to giving junk bonds from Goldmans and Citi and Merrill etc AAA+ gold star quality ratings. Therefore their opinion today is of no consequence.
However, it would mean them effectively admitting that the basis of the last decade or two's wealth and success is without any doubt a complete and utter sham/ponzi/fraud perpetrated by the financial system on the American public.
Or, the politicians could sit down and start to impose some real austerity measures on the US - something that they are desperate to avoid as it most likely kills any chance of recovery this side of 2030.
Check f
king mate !
We could be in for an interesting month or two.
I wonder if the CME Euro oil contracts were set up with foreknowledge of this coming and how will this accelerate the decline of the petrodollar?
The apes in DC are hoist by their own petard.
They could, in defense of their policy, point out how useless and corrupt S&P have been over the past decade when it came to giving junk bonds from Goldmans and Citi and Merrill etc AAA+ gold star quality ratings. Therefore their opinion today is of no consequence.
However, it would mean them effectively admitting that the basis of the last decade or two's wealth and success is without any doubt a complete and utter sham/ponzi/fraud perpetrated by the financial system on the American public.
Or, the politicians could sit down and start to impose some real austerity measures on the US - something that they are desperate to avoid as it most likely kills any chance of recovery this side of 2030.
Check f
king mate !We could be in for an interesting month or two.
I wonder if the CME Euro oil contracts were set up with foreknowledge of this coming and how will this accelerate the decline of the petrodollar?
Well the risk is all political.
Assuming the fed can manage inflationary expectations.
The US can always pay its debts. The only issue is whether the printed money used to pay the debts is worth as much as the original principle was/is.
The problem is 2 fold. 1 retarded US politicians politicising about the debt ceiling. 2 federal abuse of the currency through growing entitlements, uneconomic spending etc.
Its still the number 1 economy by far, so there is plenty of muscle to back up the currency assuming no suicide by retardation in DC.
Cue long story/discussion about the right sort of fiscal stimulus vs the wrong sort etc.
Assuming the fed can manage inflationary expectations.
The US can always pay its debts. The only issue is whether the printed money used to pay the debts is worth as much as the original principle was/is.
The problem is 2 fold. 1 retarded US politicians politicising about the debt ceiling. 2 federal abuse of the currency through growing entitlements, uneconomic spending etc.
Its still the number 1 economy by far, so there is plenty of muscle to back up the currency assuming no suicide by retardation in DC.
Cue long story/discussion about the right sort of fiscal stimulus vs the wrong sort etc.
Slightly related, I was watching an item on CBS News this morning about the price of 'gas'. Security guard complaining about the rising costs of fuel and how he can't afford shoes for his daughter. He's rolling around in a reasonably new Lexus...I think a lot of Americans are going to have to revise their attitudes towards their standard of living soon.
NoelWatson said:
Bing o said:
He's rolling around .
Was he whale sized?http://www.cbsnews.com/video/watch/?id=7363153n&am...
US to default (a little bit)?
SINGAPORE (Reuters) - Republican lawmakers are "playing with fire" by contemplating even a brief debt default as a means to force deeper government spending cuts, an adviser to China's central bank said on Wednesday.
The idea of a technical default -- essentially delaying interest payments for a few days -- has gained backing from a growing number of mainstream Republicans who see it as a price worth paying if it forces the White House to slash spending, Reuters reported on Tuesday.
But any form of default could destabilize the global economy and sour already tense relations with big U.S. creditors such as China, government officials and investors warn.
Li Daokui, an adviser to the People's Bank of China, said a default could undermine the U.S. dollar, and Beijing needed to dissuade Washington from pursuing this course of action.
"I think there is a risk that the U.S. debt default may happen," Li told reporters on the sidelines of a forum in Beijing. "The result will be very serious and I really hope that they would stop playing with fire."
China is the largest foreign creditor to the United States, holding more than $1 trillion in Treasury debt as of March, U.S. data shows, so its concerns carry considerable weight in Washington.
"I really worry about the risks of a U.S. debt default, which I think may lead to a decline in the dollar's value," Li said.
Congress has balked at increasing a statutory limit on government spending as lawmakers argue over how to curb a deficit which is projected to reach $1.4 trillion this fiscal year. The U.S. Treasury Department has said it will run out of borrowing room by August 2.
If the United States cannot make interest payments on its debt, the Obama administration has warned of "catastrophic" consequences that could push the still-fragile economy back into recession.
"It has dire implications for the economy at a time when the macro data is softening," said Ben Westmore, a commodities economist at National Australia Bank.
"It's just a horrible idea," he said.
Financial markets are following the U.S. debate but see little risk of a default.
U.S. Treasury prices were firm in Europe on Wednesday, supported by a flight to their perceived safety on the back of the Greek debt crisis and worries about a slowdown in U.S. economic growth.
Marc Ostwald, a strategist with Monument Securities in London, said markets were working on the assumption that the U.S. debt story "will go away." But nervousness would grow if a resolution was not reached in the next five to six weeks.
'WOULDN'T HAPPEN'
The Republicans' theory is that bondholders would accept a brief delay in interest payments if it meant Washington finally addressed its long-term fiscal problems, putting the country in a stronger position to meet its debt obligations later on.
But interviews with government officials and investors show they consider a default such a grim -- and remote -- possibility that it was nearly impossible to imagine.
"How can the U.S. be allowed to default?" said an official at India's central bank. "We don't think this is a possibility because this could then create huge panic globally."
Indian officials say they have little choice but to buy U.S. Treasury debt because it is still among the world's safest and most liquid investments. It held $39.8 billion in U.S. Treasuries as of March, U.S. data shows.
The officials declined to be identified because they are not authorized to speak to the media.
Oman is concerned about the impact of a default on the currency reserves of the sultanate and its Gulf neighbors.
"Our economies are substantially tied up with the U.S. financial developments," said a senior central bank official, who spoke on condition of anonymity.
"It just wouldn't happen," said Barry Evans, who oversees $83 billion in fixed income assets at Manulife Asset Management. "They would pay their Treasury bills first instead of other bills. It's as simple as that."
Monument's Ostwald called the default scenario "frightening" and said bondholders' and said bondholders' patience would wear thin if lawmakers persisted in pitching this strategy in the coming weeks.
"This isn't a debate, this is like a Mexican standoff and that is where the problem lies," he said.
SINGAPORE (Reuters) - Republican lawmakers are "playing with fire" by contemplating even a brief debt default as a means to force deeper government spending cuts, an adviser to China's central bank said on Wednesday.
The idea of a technical default -- essentially delaying interest payments for a few days -- has gained backing from a growing number of mainstream Republicans who see it as a price worth paying if it forces the White House to slash spending, Reuters reported on Tuesday.
But any form of default could destabilize the global economy and sour already tense relations with big U.S. creditors such as China, government officials and investors warn.
Li Daokui, an adviser to the People's Bank of China, said a default could undermine the U.S. dollar, and Beijing needed to dissuade Washington from pursuing this course of action.
"I think there is a risk that the U.S. debt default may happen," Li told reporters on the sidelines of a forum in Beijing. "The result will be very serious and I really hope that they would stop playing with fire."
China is the largest foreign creditor to the United States, holding more than $1 trillion in Treasury debt as of March, U.S. data shows, so its concerns carry considerable weight in Washington.
"I really worry about the risks of a U.S. debt default, which I think may lead to a decline in the dollar's value," Li said.
Congress has balked at increasing a statutory limit on government spending as lawmakers argue over how to curb a deficit which is projected to reach $1.4 trillion this fiscal year. The U.S. Treasury Department has said it will run out of borrowing room by August 2.
If the United States cannot make interest payments on its debt, the Obama administration has warned of "catastrophic" consequences that could push the still-fragile economy back into recession.
"It has dire implications for the economy at a time when the macro data is softening," said Ben Westmore, a commodities economist at National Australia Bank.
"It's just a horrible idea," he said.
Financial markets are following the U.S. debate but see little risk of a default.
U.S. Treasury prices were firm in Europe on Wednesday, supported by a flight to their perceived safety on the back of the Greek debt crisis and worries about a slowdown in U.S. economic growth.
Marc Ostwald, a strategist with Monument Securities in London, said markets were working on the assumption that the U.S. debt story "will go away." But nervousness would grow if a resolution was not reached in the next five to six weeks.
'WOULDN'T HAPPEN'
The Republicans' theory is that bondholders would accept a brief delay in interest payments if it meant Washington finally addressed its long-term fiscal problems, putting the country in a stronger position to meet its debt obligations later on.
But interviews with government officials and investors show they consider a default such a grim -- and remote -- possibility that it was nearly impossible to imagine.
"How can the U.S. be allowed to default?" said an official at India's central bank. "We don't think this is a possibility because this could then create huge panic globally."
Indian officials say they have little choice but to buy U.S. Treasury debt because it is still among the world's safest and most liquid investments. It held $39.8 billion in U.S. Treasuries as of March, U.S. data shows.
The officials declined to be identified because they are not authorized to speak to the media.
Oman is concerned about the impact of a default on the currency reserves of the sultanate and its Gulf neighbors.
"Our economies are substantially tied up with the U.S. financial developments," said a senior central bank official, who spoke on condition of anonymity.
"It just wouldn't happen," said Barry Evans, who oversees $83 billion in fixed income assets at Manulife Asset Management. "They would pay their Treasury bills first instead of other bills. It's as simple as that."
Monument's Ostwald called the default scenario "frightening" and said bondholders' and said bondholders' patience would wear thin if lawmakers persisted in pitching this strategy in the coming weeks.
"This isn't a debate, this is like a Mexican standoff and that is where the problem lies," he said.
It seems to me that no economist or politician (or anyone else) can predict the eventual consequences for the PIGS.
I presume they will collapse as states.
None of them can actually sustain the living standards they enjoy currently.
Take Ireland or Greece. There are no industries or untapped resources they utilise.
Surely the infrastructure of the state will implode.
The Health Service, Education, and Social\ Services will all collapse.
Massive inflation collapsing currency total destitution.
I cannot see France and Germany supporting them all. And who else is there?
Anyone got any better ideas?
I presume they will collapse as states.
None of them can actually sustain the living standards they enjoy currently.
Take Ireland or Greece. There are no industries or untapped resources they utilise.
Surely the infrastructure of the state will implode.
The Health Service, Education, and Social\ Services will all collapse.
Massive inflation collapsing currency total destitution.
I cannot see France and Germany supporting them all. And who else is there?
Anyone got any better ideas?
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