Saturday, August 6, 2011


From Standard and Poor's, the rating agency, we receive news via zero hedge that US debt has been downgraded. Expect all hell to break loose Monday they say, speaking of stocks as though S &P is the only rating agency in town and ignoring theirncover up of the quality of mortgage backed securities sold a decade ago as investment grade. This cow
D seem like another political maneuver by a rating agency under fore formthe quality of it's previous work. The other question is: if not the dollar them where do you invest? That our ruling class is messed up is beyond dispute but rather than blame in party fighting I'd like to see the people who bought our politicians blamed for tall the rhetorical nonsense thT seems to lead inevitably to the destruction of the last tattered remnants of the New Deal. A pox on them all. .

"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." What to expect on Monday: " it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021. On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors."

This sort of news presages increased costs of borrowing making the whole mess a whole lot worse. And the costs of borrowing will hit those of us nearer the bottom the hardest, of course. We do not live in a democracy and our representatives prefer to put the weight of their misjudgements on us and not on the people with the money who fund their campaigns. Funny that.


Anonymous said...

"If not the Dollar then where do you invest?"

The ONLY way to protect a portion of ones wealth against these clueless pricks is in precious metals. One must take actual physical custody of same.

I have used for years and every transaction has been smooth and problem free.

My questions: 1)Is this financial cluster eff now an issue of national security? 2) Are the Banksters and their political enablers traitors?

Thanks for the forum....I feel better now, sort of.

Conchscooter said...

I don't give investment advice but I have gold and silver coins, not that my pile would give me financial independence.
Our politiciansvare bought by these crooks and it seems we have to destroy every single thing before we can rebuild. I am at a loss in.