Breaking: S&P downgrades U.S. to AA+; Update: S&P statement added; Update: No chance of downgrade, said Geithner in April

posted at 8:39 pm on August 5, 2011 by Allahpundit

With a “negative outlook” to boot.

America is now a risky investment.

U.S. Treasuries, once undisputedly seen as the safest investment in the world, are now rated lower than bonds issued by countries such as the UK, Germany, France or Canada.

The outlook on the new U.S. credit rating is negative, S&P said in a statement, a sign that another downgrade is possible in the next 12 to 18 months.

See the last few updates in the other thread for details on this afternoon’s drama between S&P and the White House. Supposedly the agency admitted privately that it goofed in using the wrong debt-to-GDP baseline — a $2 trillion error. But when you’re $14 trillion in the hole and set to add $6 trillion more by the end of the decade, what’s $2 trillion, really? A deadbeat’s a deadbeat.

Odds of that negative outlook turning into a further downgrade if the Super Committee chokes: High. Stand by for updates.

Update: A grumpy White House points to S&P’s math error and calls it “amateur hour.”

Update: Zero Hedge has the text of S&P’s statement. The debt-ceiling deal wasn’t good enough:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade…

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability…

When comparing the U.S. to sovereigns with ‘AAA’ long-term ratings that we view as relevant peers–Canada, France, Germany, and the U.K.–we also observe, based on our base case scenarios for each, that the trajectory of the U.S.’s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Not only can’t the Super Committee fail, it’ll be under enormous public pressure to reach a grand bargain. That’s the silver lining in this cloud — they have to get serious now. They have no choice.

Update: A footnote to a bleak day via Dan McLaughlin: Rick Perry gets another point of contrast for his campaign.

Update: Is this an economic mega-quake or a slight tremor? There’s no way to know since we’ve never been here before, says WaPo’s Dyan Matthews, but here are the arguments for both scenarios.

Update: This video from April is now circulating on Twitter. No comment necessary.


Update: The GOP was planning to push their message for a balanced-budget amendment during the August recess. The downgrade will help that effort, but I wonder after this whether we’ll have an August recess after all. Is Congress really going to sit back for another four weeks while the economy tries to cope with this news?

Update: A “psychological haymaker”:

But the move by S&P could serve as a psychological haymaker for an American economic recovery that can’t find much traction, and could do more damage to investors’ increasing lack of faith in a political system that is struggling to reach consensus on even everyday policy items. It could lead to the prompt downgrades of numerous companies and states, driving up their costs for borrowing. Policy makers are also anxious about the hidden icebergs the move could suddenly reveal…

Some investors believe Treasurys will remain a safe haven in a volatile world, even without a solid triple-A credit rating. Others believe the U.S. will be forced to pay higher interest rates, perhaps about 0.5 percentage points, simply because they are seen as being slightly more risky than before. While only a slight gain, such a jump would increase the cost of a wide array of debt, from a home mortgage to the trillions carried by the U.S. government itself…

J.P. Morgan Chase & Co. analysts estimate some $4 trillion worth of Treasurys are pledged as collateral by borrowers such as banks and derivatives traders. If that collateral isn’t considered as high quality by lenders, the borrowers could be required to cough up more cash or securities to put the minds of lenders at ease.

That could force investors to sell off other assets to come up with the money. In a worst case scenario, credit markets could seize up, as they did during the Lehman Crisis.

Update: Fannie Mae and Freddie Mac will probably be downgraded too. So much for any near-term housing market recovery.

Update: The Treasury Department is indignant: “A judgment flawed by a $2-trillion error speaks for itself.”

Update: Warren Buffett, whose own company was downgraded by S&P, thinks it’s a big nothingburger:

Buffett to my colleague Liz Claman: Did the US deserve this? “Buffett: “NO.”Are you worried about the markets Monday? “NO.”

Update: Lefty Kevin Drum wonders how the debt-ceiling deal could have made the U.S. an instant credit risk given that (a) the sides did reach a deal, and were never seriously at risk of not doing so, and (b) there was zero chance of an actual default. Tax revenues would have covered interest payments to creditors. More:

Look: the United States has been running up big debts for the past couple of years because we’re trying to climb out of an epic recession. That’s perfectly justifiable. And our focus on reining in our long-term debt is, literally, less than a year old. Pretending that our political system is fundamentally broken because we haven’t solved our long-term problems in a few months is staggeringly panicky and ahistorical, and S&P’s obsession with hitting a $4 trillion target for medium-term deficit reduction is economically vacuous. If we still can’t get our act together in four or five years, then fine. We deserve a downgrade. But a few months? That’s crazy. It’s the kind of hair-trigger reaction that belongs on cable shoutfests, not in the boardroom of a sober, 150-year-old financial firm.

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Sarah’s on.

John the Libertarian on August 5, 2011 at 10:51 PM

Dr Evil on August 5, 2011 at 9:30 PM

Someone said Hannity is on vacation and this was a re-run.
Greta is live.

You are right, the Credit Agencies warned and warned it was about spending cuts. What I objected to is that the House continually seemed to be asking the W.H. what they would sign. Then Reid was doing the bidding also. So it’s not surprising they were given by the House what Reid & the W.H. wanted.

So, the “deal” was opposite, increased spending(debt) and a few pennies of spending cuts. I’m surprised we didn’t get a downgrade as soon as the W.H. signed the bill, LOL

bluefox on August 5, 2011 at 10:51 PM

I bet the bus tour will be canceled.

faraway

Absolutely not! He’ll need that vehicle, under which he’ll throw some scapegoats.

honsy on August 5, 2011 at 10:51 PM

Grandma’s 401k is going to be empty on Monday

faraway on August 5, 2011 at 10:52 PM

bet the bus tour will be canceled.

faraway on August 5, 2011 at 10:49 PM

But, they’ve already armored the buses!

The trip might help explain why the Secret Service purchased two armored buses for its fleet earlier this year. The protective agency told The Hill it planned to use the buses during the presidential campaign — with one bus designated for the Republican nominee — and also for large entourages of visiting dignitaries.

kingsjester on August 5, 2011 at 10:53 PM

Who do you think Obama will blame for this downgrade?
Bush, Standard & Poors, Tea Party, GOP, the stupid people that voted for him….

Kini on August 5, 2011 at 10:49 PM

The White House has already thrown Standard & Poors under the the bus

Next comes the Tea Party with a heaping dose of Bush.

Knucklehead on August 5, 2011 at 10:53 PM

Maybe Tea Party groups should mobilize this weekend!!!!

faraway on August 5, 2011 at 10:40 PM

Actually, I’m thinking about spending time with my family. I think we’ll go to an amusement park. See a movie. Maybe I’ll break a few boards with my head. Things like that.

JellyToast on August 5, 2011 at 10:55 PM

Where is Mitch Berg? Recall my comments on your blog post from this morning: “A Journey of a Thousand Miles Starts with a Single Step“?

How is that so-called “Single Step” debt limit deal working now? Understand now why some of us disagreed with you? It was not even a stab of a foot in the air, much less a single step!

TheRightMan on August 5, 2011 at 10:55 PM

You jump off the bridge first, ok? I’ll follow, I promise.

JellyToast on August 5, 2011 at 10:44 PM

Don’t be childish. I 100% ready for the change in lifestyle and have made modest preparations for it. Instead of groveling for some politician to save me I am looking out for me and my own, which to me is as conservative as you can be.

I know it is hard to let it go, but it will only be temporary. Maybe we will get off lucky with only a serious depression.

ClassicCon on August 5, 2011 at 10:56 PM

I bet the bus tour will be canceled.

faraway on August 5, 2011 at 10:49 PM

And it was all lettered up, too. Damn.

BKeyser on August 5, 2011 at 10:56 PM

Maybe now we can drill for our own oil…?

Seven Percent Solution on August 5, 2011 at 10:56 PM

I bet the bus tour will be canceled.

faraway on August 5, 2011 at 10:49 PM

I’ll take that action.

Remember: He’s doing this with the public dime, cost is not a consideration so he’s going to do it, just now, it’s going to be an all out assault on the Tea Party, instead of his old 50/50 “Tea Party/GOP are the reason I fail” excuse.

Let’s dry dock the bastid in Boston Harbor and make a museum out of it. So no one in the future will even consider a similar design. Call it the USS Barack Hussein Obama; A boat sized boat anchor.

Geochelone on August 5, 2011 at 10:50 PM

Nope. It’s going to Martha’s Vineyard.

I want the “beautiful people” to live with it.

SuperCool on August 5, 2011 at 10:56 PM

Sorry if this link to video (from April) already posted… Geithner: No Risk U.S. Will Lose AAA Credit Rating

Absolutely we’ll keep our AAA rating sez Timmy the Tiger!

electric-rascal on August 5, 2011 at 10:57 PM

The He@@ there are. Then, November 2, 2010 was just an aberration, huh? Bull.

kingsjester on August 5, 2011 at 10:47 PM

I will see your 2010, and raise you year 2008. Pretty sure more voters participated that year.

ClassicCon on August 5, 2011 at 10:57 PM

Maybe Tea Party groups should mobilize this weekend!!!!

faraway on August 5, 2011 at 10:40 PM

They are already mobilizing in Wisconsin this weekend, getting out the vote for the recall elections on Tuesday.

Knucklehead on August 5, 2011 at 10:57 PM

Oh, and I know I posted this earlier today, but here it is again for those who haven’t seen it.

Sometimes you need to laugh. This is hilarious! I can’t imagine it will be around long.

http://www.youtube.com/watch?v=W4hfdaC7eL4&feature=share

JellyToast on August 5, 2011 at 10:57 PM

I wonder if you asked President Obama to grade himself on his job performance right now he’d give himself an AA+.

BadgerHawk on August 5, 2011 at 10:58 PM

I know it is hard to let it go, but it will only be temporary. Maybe we will get off lucky with only a serious depression.

ClassicCon on August 5, 2011 at 10:56 PM

Are you suggesting that we embrace a Marxist Ideology?

kingsjester on August 5, 2011 at 10:58 PM

Geochelone on August 5, 2011 at 10:50 PM

Nope. It’s going to Martha’s Vineyard.

I want the “beautiful people” to live with it.

SuperCool on August 5, 2011 at 10:56 PM

I like the way you think. Maybe we could mount some wind-turbines on the poop-deck just to piss off the Kennedys.

Geochelone on August 5, 2011 at 10:58 PM

A good solid AA+.

BadgerHawk on August 5, 2011 at 10:59 PM

Is McCain in a coma?

faraway on August 5, 2011 at 10:48 PM

Are you saying he had a relapse?

Electrongod on August 5, 2011 at 10:59 PM

Absolutely we’ll keep our AAA rating sez Timmy the Tiger Toad!

Sorry for the flub. Fixed.

electric-rascal on August 5, 2011 at 10:59 PM

Debbie Wasserman-Schultz: “We’ve really begun to turn the economy around”

Yep! They sure have! Another four years and these “desh” jockeys will have turned us into Bangladesh.

Dr. Charles G. Waugh on August 5, 2011 at 10:59 PM

Maybe now we can drill for our own oil…?

Seven Percent Solution on August 5, 2011 at 10:56 PM

That’s just crazy talk! /

bluemarlin on August 5, 2011 at 10:59 PM

Those a holes aren’t due back till after Labor Day they are on a 5 week vacation. They have offices back home in their districts they need to hear from their bosses.

Dr Evil on August 5, 2011 at 9:46 PM

I think they’ll come back early rather than face the Tea Party folks at their town hall meetings. In Washington they wont have to face us but rather will hide behind the LSM and the idiotic questions coming from the sycophantic media.

csdeven on August 5, 2011 at 11:00 PM

Grandma’s 401k is going to be empty on Monday

faraway on August 5, 2011 at 10:52 PM

But Auntie Zatoonie’s government checks will continue to arrive on schedule, that’s the important thing. The GOP “leadership” (Boehner’s really Field Marshal Haig in disguise!) assured us that we had to take this deal or bad stuff would happen…like the parasites on the dole would miss their checks and get upset with them.

SuperCool on August 5, 2011 at 11:01 PM

Let’s primary Obama with Alvin Green. I know whom I would support.

Dhuka on August 5, 2011 at 11:01 PM

Will there be angry mobs at the hosue of S/P’s CEO?

Please, conservatives in Wisconsin running against the democrats, make this an issue NOW!

SouthernGent on August 5, 2011 at 11:01 PM

When will Herr Barackito Obamalini declare that the S&P CEO’s are domestic terrohobbits? Have they surpassed the Tea Party terrohobbits as enemies of the regime yet? Or would that take another downgrade? If the S&P where totally honest the rating would be D minus and falling, but they may be afraid of that much honesty getting them a one-way ticket to Gitmo.

Lon Chaney on August 5, 2011 at 11:02 PM

Are you suggesting that we embrace a Marxist Ideology?

kingsjester on August 5, 2011 at 10:58 PM

Hell no, but I am suggesting that you guys better accept the fact that growing majority in this country already has…

ClassicCon on August 5, 2011 at 11:03 PM

Maybe now we can drill for our own oil…?

Seven Percent Solution on August 5, 2011 at 10:56 PM

I saw a Senate ad showing Obama plugging the hole, shovel ready style.
Nope, his ears are filled with sand.

Electrongod on August 5, 2011 at 11:03 PM

A grumpy White House points to S&P’s math error and calls it “amateur hour.”

Well, THAT should smooth some of those ruffled feathers over at S&P.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed……

…..Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.

So the downgrade was because serious cuts, and especially entitlements, were not addressed (as the Ryan plan proposed), and they don’t see congress as capable of coming to an agreement that needs to be made. Sounds like a barb thrown squarely at Obama and the dems to me.

iurockhead on August 5, 2011 at 11:03 PM

That’s just crazy talk! /

bluemarlin on August 5, 2011 at 10:59 PM

I know…

… but there is something about “revenues” that really turn me on!

Seven Percent Solution on August 5, 2011 at 11:04 PM

Will there be angry mobs at the hosue of S/P’s CEO?

Please, conservatives in Wisconsin running against the democrats, make this an issue NOW!

SouthernGent on August 5, 2011 at 11:01 PM

You’ve heard about the mobs in Wisconsin? Drudge has a link up that hundreds of blacks were attacking whites at the Wisconsin State Fair. Pulling people out of cars and off motorcycles.
It’s getting intense out there.

JellyToast on August 5, 2011 at 11:05 PM

Hell no, but I am suggesting that you guys better accept the fact that growing majority in this country already has…

ClassicCon on August 5, 2011 at 11:03 PM

In a poll released on August 1st, 2011, gallup.com reported:

Americans’ political ideology at the midyear point of 2011 looks similar to 2009 and 2010, with 41% self-identifying as conservative, 36% as moderate, and 21% as liberal.

If this pattern continues, 2011 will be the third straight year that conservatives significantly outnumber moderates — the next largest ideological bloc. Liberalism has been holding steady for the past six years, averaging either 21% or 22%, although notably higher than the 17% average seen in Gallup polling during the early to middle ’90s.

I’ve showed you mine. Now show me yours. Cite your sources, please.

kingsjester on August 5, 2011 at 11:07 PM

The Treasury Department is indignant

You misspelled incontinent.

Lon Chaney on August 5, 2011 at 11:08 PM

Dr Evil on August 5, 2011 at 9:38 PM

That is how it went down. Thanks for stating it clearly. The House had it right with the CCB and never should have done anything else.

Politics got in the way of common sense and doing what was right.

Boy, they really hate the Tea Party, don’t they? We must be doing something right, LOL Otherwise they would ignore us!

bluefox on August 5, 2011 at 11:08 PM

If this happened under Bush, evening news presenters would have strokes on air as they shrieked and showed pictures of dead children on television.

andy85719 on August 5, 2011 at 11:08 PM

Geochelone on August 5, 2011 at 10:58 PM

I’m a New England native who hangs out on the Chump Line with Howie Carr, every Monday through Friday (High Hack Holidays excluded)and…I know the “beautiful people”, I’ve worked for them, I’ve seen them in action, I get stuck behind their luxury SUV’s covered in liberal slogan bumper stickers in traffic and, I really want them to have a reminder of what they’ve done to the rest of us.

Something lasting that screws up their neighborhood.

SuperCool on August 5, 2011 at 11:09 PM

That’s the silver lining in this cloud — they have to get serious now. They have no choice.

You are grossly overestimating them. You should know better by now.

Lon Chaney on August 5, 2011 at 11:12 PM

Update: Lefty Kevin Drum wonders how the debt-ceiling deal could have made the U.S. an instant credit risk
Pretending that our political system is fundamentally broken because we haven’t solved our long-term problems in a few months is staggeringly panicky and ahistorical, and S&P’s obsession with hitting a $4 trillion target for medium-term deficit reduction is economically vacuous. If we still can’t get our act together in four or five years, then fine. We deserve a downgrade. But a few months? That’s crazy.

fiddle dee dee, the first time in history the United States of America, has had it’s triple A rating down graded…I’ll worry about that tomorrow Kevin Drum.

Dr Evil on August 5, 2011 at 11:13 PM

Huge mistake for The Alinskyite White House to blame the rating agency. (“Fundamentally Flawed”, etc). B/C THEY NOW THEY OWN IT!

The White House should have shifted blame, responding, “S&P’s decision is a regrettable and troubling result of the intransigence of the GOP refusal to reach a balanced solution…..blah blah blah

aquaviva on August 5, 2011 at 11:13 PM

I sure am glad the grown ups are in charge.

John the Libertarian on August 5, 2011 at 11:14 PM

Good for S&P. Unlike Obama, they have actually followed up on something they promised: If the Debt Deal cut less than $4T; a downgrade was possible.

The other rating agencies should follow suit. Stop being scared of this administration and tell the truth. The US barely deserves a AA rating given the Debt/GDP ratio.

Looks like the Tea Party was right all along. Establishment GOP and its cheerleaders in the press? Not so much.

Norwegian on August 5, 2011 at 11:14 PM

Aquaviva. I was thinking the same thing. They should have accepted it and blamed the GOP. Blaming the credit agency is what the Greeks did. Look at the result, the agency just kept cutting their rating.

andy85719 on August 5, 2011 at 11:15 PM

Is McCain in a coma?

faraway on August 5, 2011 at 10:48 PM

Are you saying he had a relapse?

Electrongod on August 5, 2011 at 10:59 PM

Sounds like an improvement to me.

Lon Chaney on August 5, 2011 at 11:15 PM

Another reason why Obama will go down in history, as the President that made Jimmy Carter look like a fiscal hawk

Kini on August 5, 2011 at 11:15 PM

Obama Reaganesque? Hardy.

He needs to be more “Shermanesque”
The only thing I want to hear from this incompetent moron is his Johnsonesque speech

I shall not seek, and I will not accept, the nomination of my party for another term as your president.”

Short, sweet, DONE!

DSchoen on August 5, 2011 at 11:17 PM

Grandma’s 401k is going to be empty on Monday

faraway on August 5, 2011 at 10:52 PM

Good thing I already cashed most of mine in trying to stay afloat and pay my mortgage during my Funemployment.

Maybe I will finally get a job and have some money just in time to get in on the bottom of the market.

rockmom on August 5, 2011 at 11:17 PM

Thank goodness that Ezra Klein is on MSNBC explaining all this to us.

faraway on August 5, 2011 at 9:16 PM

Ezra is about to learn that everything he has been taught by his idiot liberal teachers and heroes is bullsh!t, and he’s actually an uneducated nitwit with no sense of how the world works.

This will be very painful for him.

Jaibones on August 5, 2011 at 11:18 PM

Bwa ha ha ha…

Boehner blames Democrats for S&P downgrade

Typical Washington blame shifting.

How about you look in the mirror for whom to blame, Mr. Speaker? Wishing you had listened to the Hobbits™ for once, eh? How is that debt deal working out? Thought you said you ended up with 98% of what you wanted.

TheRightMan on August 5, 2011 at 11:18 PM

Now is it time for the pitchforks?

justltl on August 5, 2011 at 11:18 PM

I wonder if Moooochele is proud of the country still?

csdeven on August 5, 2011 at 11:19 PM

The real pain starts when the ARMs start adjusting. You think foreclosures are bad now?

Within weeks, we’ll see financial institutions knocking principal amounts down, and practically begging people not to abandon the house. The true value all things real is about to be discovered. Those institutions who continue to pretend the inflated values are real will cease to exist.

FNMA is going to need a lot more than $5.1B now. Hopefully, Fannie and Freddie won’t survive the next 12 months.

BobMbx on August 5, 2011 at 11:19 PM

AA+ huh? I’m glad that S&P is so optimistic.

.
.

Personally I’d give them the same as 0bama gives himself: “a good , solid B+ .”

LegendHasIt on August 5, 2011 at 11:19 PM

Now is it time for the pitchforks?

justltl on August 5, 2011 at 11:18 PM

We are going to see some seriously mobilized Tea Parties.

John the Libertarian on August 5, 2011 at 11:20 PM

The Americans are afflicted with millions of parasites and a system of parasitism. The parasites vote, most of the parasites are nice people, and nearly all of them have a sad story in support of their parasitism. On this analysis, of course “Treasury” “securities” are being downgraded.

Kralizec on August 5, 2011 at 11:21 PM

Ezra is about to learn that everything he has been taught by his idiot liberal teachers and heroes is bullsh!t, and he’s actually an uneducated nitwit with no sense of how the world works.

This will be very painful for him.

Jaibones on August 5, 2011 at 11:18 PM

Reminds me of the late 70s-early 80s, when all the “proper” economists howled about Reagan’s across-the-board tax cut plan and said it would never work. Until it did.

rockmom on August 5, 2011 at 11:21 PM

Day after O’Baahma’s self-congratulation party.

Jaibones on August 5, 2011 at 11:21 PM

Comment from AOS:

Now I understand why JEF rated himself a B+ – he was using the bond rating system.

Posted by: Vashta Nerada at August 05, 2011 11:12 PM (9Uxl0)

Heh.

Hiya Ciska on August 5, 2011 at 11:21 PM

faraway,

Grandma’s 401k is going to be empty on Monday

Chances are grandma was laid off two and a half years ago, went on UI, exhausted her 99 weeks of unemployment benefits and cashed in her 401k anyway.

Mike Honcho on August 5, 2011 at 11:21 PM

JellyToast on August 5, 2011 at 9:39 PM

So true. Having a leader that inspires rather than oppresses. We are a free people and don’t take kindly for anyone to remove our liberties.

You are correct that the right type of leader is necessary; one that holds the values & the attributes of our great Country.

We know the fakes but only in the past couple of years have come together in order to do anything about it.

Long live the U.S.A. & The Tea Party!

bluefox on August 5, 2011 at 11:22 PM

Good thing I already cashed most of mine in trying to stay afloat and pay my mortgage during my Funemployment.

Maybe I will finally get a job and have some money just in time to get in on the bottom of the market.

rockmom on August 5, 2011 at 11:17 PM

Wow! You and me both.
I sold my 401K last year when the markets were fair.
We got a lot of work ahead of us.

Electrongod on August 5, 2011 at 11:23 PM

Looks like the Tea Party was right all along. Establishment GOP and its cheerleaders in the press? Not so much.

Norwegian on August 5, 2011 at 11:14 PM

Libs and RINOs weren’t afraid of the TEA Party for any reason other than if it gained any power, which it did, the truth would come out.

The Dems and RINOs worst nightmare has come true. The sham of US finances is exposed.

Hooray for our side. When does Sarah comment? And what does she say?

BobMbx on August 5, 2011 at 11:23 PM

I paid my taxes and all I got was this lousy T-bill!

kregg on August 5, 2011 at 11:24 PM

Wow! You and me both.
I sold my 401K last year when the markets were fair.
We got a lot of work ahead of us.

Electrongod on August 5, 2011 at 11:23 PM

I used to be embarrassed about it. Now I feel like a f%cking genius.

rockmom on August 5, 2011 at 11:25 PM

I paid my taxes and all I got was this lousy T-bill!

kregg on August 5, 2011 at 11:24 PM

Mind if I trademark that? Its got style!

BobMbx on August 5, 2011 at 11:25 PM

I used to be embarrassed about it. Now I feel like a f%cking genius.

rockmom on August 5, 2011 at 11:25 PM

Exactly!

Electrongod on August 5, 2011 at 11:25 PM

You know all thise happened before. Nero comes to mind

unseen on August 5, 2011 at 11:26 PM

stenwin77 on August 5, 2011 at 9:39 PM

So you think too that this is coming? I think this is what caused the sell off in the market. Just my opinion.
That explains the sell off, since another QE3 will cause the dollar to lose more value. Several factors involved in this tho.

bluefox on August 5, 2011 at 11:26 PM

Now is it time for the pitchforks?

justltl on August 5, 2011 at 11:18 PM

Yes, my friends. Now…

Jaibones on August 5, 2011 at 11:26 PM

Lefty Kevin Drum wonders how the debt-ceiling deal could have made the U.S. an instant credit risk given that (a) the sides did reach a deal

It is what it failed to do: anything serious.

Look: the United States has been running up big debts for the past couple of years because we’re trying to climb out of an epic recession. That’s perfectly justifiable.

No, actually it’s not. Keynesianism + Marxism = downgrade, bankruptcy, no growth, and diminishing freedom.

AshleyTKing on August 5, 2011 at 11:27 PM

Before the weekend is out…

… Obowma will blame the TEA Party.

Then the media will run with it, it will be taught in schools by the end of the week, and Hollywood is already changing scripts and planning an HBO documentary…

… It will be just like the initial economic collapse caused by the liberal social engineering policies of the Left, but in the end they took power of the House, Senate, and the White House.

With that power, their policies based on the failed Marxist/Socialist ideology have brought us to today, and they will circle the wagons, and launch a campaign of lies to avoid blame for their own actions…

… Throw in the union goons to cause civil unrest, Obowma will have no choice to declare martial law and suspend elections until he can “save” the country from the TEA Party.

If you don’t think this is possible…

… you haven’t been paying attention.

(I have some extra tin foil hats if anyone needs any)

Seven Percent Solution on August 5, 2011 at 11:28 PM

Looks like the Tea Party was right all along. Establishment GOP and its cheerleaders in the press? Not so much.

Norwegian on August 5, 2011 at 11:14 PM

Precisely. As we were saying — the only ones in the debt ceiling debate who had anything right were the “terrorists”.

Jaibones on August 5, 2011 at 11:28 PM

Chances are grandma was laid off two and a half years ago, went on UI, exhausted her 99 weeks of unemployment benefits and cashed in her 401k anyway.

Mike Honcho on August 5, 2011 at 11:21 PM

The proposed solution? 100+ weeks of unemployment benefits and a government 401K subsidy. Because that’s what a bankrupt compassionate government does, don’t you know.

KingGold on August 5, 2011 at 11:29 PM

The ASX opens first next Monday (Sunday evening US time).

Any guesses how far it will fall?

Crux Australis on August 5, 2011 at 11:29 PM

Happy Birthday, Mr. President.
So tonight you’re gonna party like it’s 1929.

justltl on August 5, 2011 at 11:29 PM

Technically, the house is still in session…

As a first step, Boehner, Cantor and Ryan should introduce a bill next week to cut each department’s spending levels to FY2007 levels and then vote on it the following week and send it to the Senate….

Pink slips for the lot of ya

phreshone on August 5, 2011 at 11:29 PM

unseen on August 5, 2011 at 9:40 PM

You seem to be up to speed with the Markets, etc.

Did we ever find out what caused that 2008 run on the Money Markets?

I have my own opinion. Seemed to be very different than what happened yesterday.

bluefox on August 5, 2011 at 11:30 PM

phreshone on August 5, 2011 at 11:29 PM

This +14.5 trillion

andy85719 on August 5, 2011 at 11:31 PM

Wanna make money on Monday? But all the shit that will be way oversold at around 11:30. I agree with Buffett. This is a big nothingburger.

angryed on August 5, 2011 at 11:31 PM

Rep. Jack Kingston (R-GA) calls on Congress to reconvene to fix debt crisis.

andy85719 on August 5, 2011 at 11:32 PM

Tar baby

wepeople on August 5, 2011 at 11:34 PM

I have my own opinion. Seemed to be very different than what happened yesterday.

bluefox on August 5, 2011 at 11:30 PM

no never found out but that in itself tells you something. The people that came to power had no wish to investigate it further which tends to point to a conclusion all it itself does it not?

sometimes it isn’t what you find but what isn’t there.

unseen on August 5, 2011 at 11:34 PM

Rep. Jack Kingston (R-GA) calls on Congress to reconvene to fix debt crisis.

andy85719 on August 5, 2011 at 11:32 PM

“Quick, lets close the barn door!”

Brilliant play, Jack. Suggesting a solution after the horse escapes. Work on your timing, dude.

TEA Party material you ain’t.

BobMbx on August 5, 2011 at 11:36 PM

The ASX opens first next Monday (Sunday evening US time).

Any guesses how far it will fall?

Crux Australis on August 5, 2011 at 11:29 PM

When the U.S. sneezes the world catches a cold…. there is no telling. When Soros sold off and closed up shop, it was a signal to some of the investors to sell off. That happened yesterday. We had better than predicted employment numbers so it kept the jitters at bay today. It was kind of the S&P to wait till after the markets closed to pull the trigger. Hopefully people will have enough time in between not to over react. I mean where are they going to go? The U.S. still looks better than most places to invest.

Dr Evil on August 5, 2011 at 11:37 PM

At least, this guarantees we will have a new President in January 2013.

Voter from WA State on August 5, 2011 at 11:33 PM

I’m already printing bumperstickers that say :

“Re-elect Biden for President”

BobMbx on August 5, 2011 at 11:38 PM

The Progressive Conservative government which was in power in Canada from 1984 to 1993 ( who very much resembled America’s Rinos) attempted to exercise fiscal restraint but had no success in the face of fierce opposition from the Liberal Party and their supporters in the MSM. There was no progress in dealing with the fiscal imbalance until Canada’s Tea Party emerged in the early 1990′s. They were called the Reform Party. The media didn’t call them terrorists but portrayed them as Christian knuckle draggers. Eventually the Reform Party, after a name change to the Canadian Alliance, merged with the Progressive Conservatives to form The Conservative Party of Canada.

This is a party which is giving Canada good, solid government. It is no more liberal than it has to be to remain in power.

Basilsbest on August 5, 2011 at 10:18 PM

No they are spending and growing government, what part of surplus don’t you get moron. As for the pitiful poster moaning about those that didn’t get their EI checks what the heck are you solcialists.

All you care about is a letter after the name, not real savings. Harper cut 700, Martin cut 40,000. Do you see the difference?

harry on August 5, 2011 at 11:40 PM

Update: A footnote to a bleak day via Dan McLaughlin: Rick Perry gets another point of contrast for his campaign.

Couple that with this:

Moody’s Puts Local Bonds in Texas Under Review

Perry now has two hammers.

Update: Warren Buffett, whose own company was downgraded by S&P, thinks it’s a big nothingburger:

Good. It’s not the end of the Republic.

The family may proceed with Saturday night at the movies.

rukiddingme on August 5, 2011 at 11:41 PM

Rep. Jack Kingston (R-GA) calls on Congress to reconvene to fix debt crisis.

andy85719 on August 5, 2011 at 11:32 PM

Was he one of the 22 who voted against the Boehner proposal and against the final deb limit deal? If not, he should just shut his trap mouth.

Look, I am not in a kind mood at all for the Dems or the GOP Establishment. They all led us into this mess!

TheRightMan on August 5, 2011 at 11:44 PM

ClassicCon on August 5, 2011 at 9:43 PM

No, Conservatives are not just waiting and doing nothing. And if you haven’t noticed, we are not silent nor in the closet.

Who do you think organized, funded, marched and had Tea Parties across this nation? I guess you missed the two cross Country trips that the Tea Party Express carried out.

Then after that we VOTED in November 2010!! Records were set across the Country in State after State. A record number of Republican freshmen were voted into the US House.
We added to the US Sentate. 18 State Govenors/Legislative wins.

We don’t have to wait on a depression or anything else.

It doesn’t matter how many in this Country want to destroy it. Right has always been Might.

You may want to read some of the Conservative Political sites and review the 2010 Election Results, Federal & State.

bluefox on August 5, 2011 at 11:45 PM

“We saved the economy.” -Obama adviser Rahm Emmanuel (D)

Good Lt on August 5, 2011 at 11:46 PM

Jacob Weisberg claims that the Tea Party “has ruined America”.

If Obama and the fools from the left to the right would have done what the Tea Party wants, this would not have happened.

Schadenfreude on August 5, 2011 at 11:47 PM

especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.

Guess that whole hostage taking, terrorist, terrorism meme from the White House kinda sorta back fired eh?

DSchoen on August 5, 2011 at 11:48 PM

Happy Birthday, Mr. President.
So tonight you’re gonna party like it’s 1929.

justltl on August 5, 2011 at 11:29 PM

My vote for post of the day.

bw222 on August 5, 2011 at 11:49 PM

JellyToast on August 5, 2011 at 11:05 PM

Black on white violence/hate crimes – not just small scale or for McDonald’s anymore.

Foreshadowing?

Midas on August 5, 2011 at 11:51 PM

No . Cut like Hell, and increase taxes as necessary. This is how States have to survive.

Southernblogger on August 5, 2011 at 9:40 PM

Well, you may want to take a look at what Governor Kasich has done in the State of Ohio. Made great changes, all for the better. No new taxes either.

bluefox on August 5, 2011 at 11:53 PM

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.

Hm. Who’s to blame for that?

crr6 on August 5, 2011 at 8:44 PM

The side that never even proposed a budget or a plan (that would be the Democrats), and refused to consider the 3 separate bills passed by the other side (that would be the Republican House), preferring to focus on how to blame the other side (yes, the Republicans again) rather than take a single step to fix the problem (you know, like pass a bill of their own or even make a proposal)?

Unless you’ve suddenly decided to start defending the Republicans, it’s a really bad idea to ask a question like that with such an obvious answer.

Maybe you should reconsider that whole lawyer thing…..

didymus on August 5, 2011 at 11:53 PM

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