S&P considering US AAA rating

[Lord Zentei]

That makes no sense. He didn't call the GOP's bluff and let the economy fall to shambles, so he's a worthless sellout? You don't think no deal at all would have downgraded the US Debt Rating across the board as opposed to it being just one agency using possibly suspect math?

And that "until 2013" thing is not just so he won't have to fight another hostage-taking of the debt limit before the election, it's because the rating agencies wanted a long term solution, so you're full of shit there as well.

As for the 2013 date, that excuse means precisely jack and shit if the current deal is worthless, doesn't it?

No, because it was all 3 rating agencies demanding a long term debt ceiling increase, not just S&P. And it's hardly an "excuse".

So what if it was all three rating agencies making demands? That doesn't address the issue.

It is an excuse if the long-term "solution" is not a solution. That means he's deferring the fight until after the elections.

[Flagg]

As for the 2013 date, that excuse means precisely jack and shit if the current deal is worthless, doesn't it?

No, because it was all 3 rating agencies demanding a long term debt ceiling increase, not just S&P. And it's hardly an "excuse".

So what if it was all three rating agencies making demands? That doesn't address the issue.

It is an excuse if the long-term "solution" is not a solution. That means he's deferring the fight until after the elections.

Are you retarded or something? The solution was raising the debt ceiling to avoid economic calamity and in doing so for over a year as opposed to a few months means that our credit rating doesn't take a hit from all 3 agencies. You get that not having to have another go round with the GOP taking the ceiling hostage in February adds some stability to the situation, right?

[aerius]

They most certainly did not. S&P floated their $4 trillion over 10 years deficit reduction figure before the budget talks took place. None of the proposals from either side came close. So yes, it's Obama's fault as much as everyone else.

Golden mean horseshit. Obama bent over backwards time and time again only to be walked out on by the Tea Party whipped GOP stooges running the House. I'm not going to say he's completely without fault, but he's not even close to his fault "as much as everyone else".

He was warned in advance, $4 trillion or you get fucking downgraded. He didn't even try to meet that number. It's a simple pass/fail test, he failed.

[Flagg]

They most certainly did not. S&P floated their $4 trillion over 10 years deficit reduction figure before the budget talks took place. None of the proposals from either side came close. So yes, it's Obama's fault as much as everyone else.

Golden mean horseshit. Obama bent over backwards time and time again only to be walked out on by the Tea Party whipped GOP stooges running the House. I'm not going to say he's completely without fault, but he's not even close to his fault "as much as everyone else".

He was warned in advance, $4 trillion or you get fucking downgraded. He didn't even try to meet that number. It's a simple pass/fail test, he failed.

CSMonitor

Relevant quote:

The WSJ/NBC poll also found that Obama’s proposal – $4 trillion in deficit reduction over 10 years that combines spending cuts, including on Medicare, and tax hikes on corporations and the wealthy – beats the House Republican plan by 22 points (58 percent to 36 percent). The House GOP plan, called "Cut, Cap, and Balance," would cut and cap federal spending and require congressional approval of a balanced budget amendment to the Constitution before the debt ceiling could be raised. Anything that could be construed as a tax increase – including the closing of tax loopholes and ending of corporate subsidies – is anathema to many congressional Republicans.

You're an idiot or a liar, pick one.

[Lord Zentei]

Are you retarded or something? The solution was raising the debt ceiling to avoid economic calamity and in doing so for over a year as opposed to a few months means that our credit rating doesn't take a hit from all 3 agencies. You get that not having to have another go round with the GOP taking the ceiling hostage in February adds some stability to the situation, right?

That's got nothing to do with the fact that the compromise that got signed was not a solution. It doesn't add stability to the situation at all.

[Flagg]

Are you retarded or something? The solution was raising the debt ceiling to avoid economic calamity and in doing so for over a year as opposed to a few months means that our credit rating doesn't take a hit from all 3 agencies. You get that not having to have another go round with the GOP taking the ceiling hostage in February adds some stability to the situation, right?

That's got nothing to do with the fact that the compromise that got signed was not a solution. It doesn't add stability to the situation at all.

It was a solution you dimwitted numbskull. It was a solution to the threat of the US defaulting on its debts, the very threat of which caused massive instability in the markets. It prevented the US Credit score from being downgraded by all 3 ratings agencies as opposed to the one that possibly used bad math to downgrade.

[Lord Zentei]

Are you retarded or something? The solution was raising the debt ceiling to avoid economic calamity and in doing so for over a year as opposed to a few months means that our credit rating doesn't take a hit from all 3 agencies. You get that not having to have another go round with the GOP taking the ceiling hostage in February adds some stability to the situation, right?

That's got nothing to do with the fact that the compromise that got signed was not a solution. It doesn't add stability to the situation at all.

It was a solution you dimwitted numbskull. It was a solution to the threat of the US defaulting on its debts, the very threat of which caused massive instability in the markets. It prevented the US Credit score from being downgraded by all 3 ratings agencies as opposed to the one that possibly used bad math to downgrade.

Gods, but you're an obnoxious blowhard. Don't you understand that the deal doesn't come close to addressing the scale of the debt crisis? Or are you too busy apologizing for Obama to think about what it will take to resolve it?

[aerius]

You're an idiot or a liar, pick one.

Let's see what happened when the CBO costed it.
http://www.cbo.gov/ftpdocs/121xx/doc121 ... Budget.pdf

Excerpt:

In 2012, the deficit under the President’s budget would
decline to $1.2 trillion, or 7.4 percent of GDP, CBO
estimates. That shortfall is $83 billion greater than the
deficit that CBO projects for 2012 in its current baseline.
Deficits in succeeding years under the President’s proposals
would be smaller than the deficit in 2012, although
they would still add significantly to federal debt. The
deficit would shrink to 4.1 percent of GDP by 2015
but widen in later years, reaching 4.9 percent of GDP
in 2021 (see Figure 1-1). In all, deficits would total
$9.5 trillion between 2012 and 2021 under the President’s
budget (or 4.8 percent of total GDP projected
for that period)—$2.7 trillion more than the cumulative
deficit in CBO’s baseline.

So what happened to that $4 trillion that was claimed? Oh yeah, it was Enron accounting.

So who's the dumbass again?

[Lord Zentei]

It was a solution to the threat of the US defaulting on its debts, the very threat of which caused massive instability in the markets.

What massive instability? Looking at graphs of the Dow and exchange rates, I don't see anything particularly extraordinary in there.

You haven't looked at the news on today's trading, it's been quite volatile.

NEW YORK (CNNMoney) -- It was a wild ride on Wall Street.

Stocks ended Friday on a mixed note after violently whipsawing throughout the day. The Dow had a massive trading range of 400 points as investors scrambled to make sense of a whirlwind of news.

Deep investor concerns about the U.S. economy and the European debt crisis caused heavy damage to U.S. stocks this week. All three indexes had their worst week since the darkest months of the 2008-09 financial crisis.

The Dow Jones industrial average (DJIA) rose 61 points, or 0.5%, to close at 11,445. The Dow at one point was down nearly 240 points.

The blue chips were lifted by shares of Kraft (KFT, Fortune 500) and Procter & Gamble (PG, Fortune 500), while the biggest drag on the Dow were shares of Bank of America (BAC, Fortune 500), which fell more than 7%.

The S&P 500 (INX) fell less than a point, or 0.1%; to 1,199; and the Nasdaq Composite (COMP) slid 24 points, or 1%, to 2,532.

The Dow fell nearly 6% for the week, the S&P 500 lost 7% and the Nasdaq dropped 8%. It was the worst week for the S&P 500 and Nasdaq on a percentage basis since November 2008 and the worst week for the Dow since March 2009.

Stocks started Friday's session sharply higher after investors got a strong U.S. jobs report. But the rally had little fuel, with the major indexes turning sharply lower as fears about Europe's escalating debt problems quickly dampened any early enthusiasm.

"The jobs report was modestly reassuring," said Bruce McCain, chief market strategist with Key Private Bank. "But it's been the heightened concerns over Europe that has dominated trading today."

Italy is quickly becoming the latest domino to potentially fall in the eurozone, with many investors worrying that the eurozone's third-largest economy may be too large to save.
Young investors stay put amid turmoil

Stocks found some support after the European Central Bank said it agreed to buy Italian bonds in exchange for massive budget cuts. But traders said investors were reluctant to hold stocks going into the weekend.

"The crisis in Europe is continuing to unfold and while I suspect Europe's debt story will not have a good ending, it's not clear how many more chapters this book has," McCain said.

It's clear that fear is still dominating sentiment. Wall Street's "fear" gauge -- the VIX (VIX) -- jumped to a reading of 32.05 in late-afternoon trading. Anything above 30 indicates a heightened sense of fear.
Choppy waters ahead - StockTwits

Stocks plunged Thursday, with the Dow tumbling 512 points. It was the steepest point loss since October 2008 -- as fear about the global economy spooked investors.

All three major indexes have erased their gains for the year and now are deep into "correction" territory -- defined as a 10% drop from recent highs. And while Wall Street took a hammering the past few weeks, stocks remain well above their March 2009 lows.

World markets: European stocks sank yet again on Friday before Italy's debt deal was announced. Britain's FTSE 100 (UKX) fell 2.7%, the DAX (DAX) in Germany slipped 2.7%, while France's CAC 40 (CAC40) was down 1.3%.

Asian markets ended the session deep in the red follow Thursday's big selloff in U.S. The Shanghai Composite (SHCOMP) lost 2.2%, the Hang Seng (HSI) in Hong Kong plunged 4.3% and Japan's Nikkei (N225) lost 3.7%.

Commodities and currencies: The dollar rose against the euro, the Japanese yen and British pound.

The greenback also rose for a third straight session against the Swiss franc, following the Swiss National Bank's intervention in the currency market earlier this week.

Gold futures for December delivery gained $3 .to $1,662.60 an ounce Friday, while oil for September delivery added 25 cents to $86.88 a barrel.
Regaining faith in U.S. but not the economy

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.56% from 2.46% late Thursday.

Companies: Shares of Procter & Gamble (PG, Fortune 500) rose 2%, after the Dow component posted earnings and sales that were ahead of expectations. The company also warned that results for the current quarter would fall short of estimates.

Priceline.com (PCLN) shares jumped 9%, following the online travel site's better-than-expected earnings and a strong outlook for the rest of the year. To top of page

[Flagg]

You're an idiot or a liar, pick one.

Let's see what happened when the CBO costed it.
http://www.cbo.gov/ftpdocs/121xx/doc121 ... Budget.pdf

Excerpt:

In 2012, the deficit under the President’s budget would
decline to $1.2 trillion, or 7.4 percent of GDP, CBO
estimates. That shortfall is $83 billion greater than the
deficit that CBO projects for 2012 in its current baseline.
Deficits in succeeding years under the President’s proposals
would be smaller than the deficit in 2012, although
they would still add significantly to federal debt. The
deficit would shrink to 4.1 percent of GDP by 2015
but widen in later years, reaching 4.9 percent of GDP
in 2021 (see Figure 1-1). In all, deficits would total
$9.5 trillion between 2012 and 2021 under the President’s
budget (or 4.8 percent of total GDP projected
for that period)—$2.7 trillion more than the cumulative
deficit in CBO’s baseline.

So what happened to that $4 trillion that was claimed? Oh yeah, it was Enron accounting.

So who's the dumbass again?

That would be you, for trying to ignore the claim you made that he never came close to $4 trillion in deficit reductions.

[aerius]

That would be you, for trying to ignore the claim you made that he never came close to $4 trillion in deficit reductions.

So let me get this straight, Obama makes a claim that was complete bullshit, and you're calling me a dumbass for calling him out on his bullshit?
Fuck, you're even more full of shit than your retarded president.

[Flagg]

Gods, but you're an obnoxious blowhard. Don't you understand that the deal doesn't come close to addressing the scale of the debt crisis? Or are you too busy apologizing for Obama to think about what it will take to resolve it?

I'm not "apologizing" for shit, I'm simply pointing out how dumb you are by your insisting that pushing the next debt ceiling vote to 2013 was purely political on Obama's part. You keep insisting there was no solution, so if there wasn't, why haven't we defaulted? If there was no solution, why aren't we talking about a possible default in a few months? If there was no solution, why haven't we been downgraded by every credit agency?

[Flagg]

That would be you, for trying to ignore the claim you made that he never came close to $4 trillion in deficit reductions.

So let me get this straight, Obama makes a claim that was complete bullshit, and you're calling me a dumbass for calling him out on his bullshit?
Fuck, you're even more full of shit than your retarded president.

If you had cited the CBO study in your original post I might buy what you're trying to sell. But since you're a professional bullshitter I'm not.

That said, concession on the $4 trillion figure since the CBO report does in fact show they used "creative accounting".

[Broomstick]

They most certainly did not. S&P floated their $4 trillion over 10 years deficit reduction figure before the budget talks took place. None of the proposals from either side came close. So yes, it's Obama's fault as much as everyone else.

Golden mean horseshit. Obama bent over backwards time and time again only to be walked out on by the Tea Party whipped GOP stooges running the House. I'm not going to say he's completely without fault, but he's not even close to his fault "as much as everyone else".

He was warned in advance, $4 trillion or you get fucking downgraded. He didn't even try to meet that number. It's a simple pass/fail test, he failed.

If Obama was the sole agent to bring that about your whine might have some validly but, get this, the President of the United States is not a dictator. He had to convince more than half of 535 other people to cooperate. If more than half of those 535 absolutely refuse to cut as much as 4 trillion there isn't a goddamned thing the PotUS can do to cut 4 trillion. Got that? The PotUS can't force Congress to do his bidding, and sometime Congress digs in their collective heels. That's what happened. That's why the lion's share of the blame goes to Congress on this one. Obama extracted the best deal he felt he could (which may or may not have been the best of all possible deals, as opposed to the perfect deal, which just wasn't going to happen at all).

As we were not privy to the negotiation sessions it is impossible to determine if 4 trillion in cuts was ever on the table or not. It is clear, however, that even if it was on the table at some point Congress was never going to agree to that number.

[Lord Zentei]

Gods, but you're an obnoxious blowhard. Don't you understand that the deal doesn't come close to addressing the scale of the debt crisis? Or are you too busy apologizing for Obama to think about what it will take to resolve it?

I'm not "apologizing" for shit, I'm simply pointing out how dumb you are by your insisting that pushing the next debt ceiling vote to 2013 was purely political on Obama's part. You keep insisting there was no solution, so if there wasn't, why haven't we defaulted? If there was no solution, why aren't we talking about a possible default in a few months? If there was no solution, why haven't we been downgraded by every credit agency?

The other credit agencies have threatened to downgrade the US too - they may be waiting to see what happens after the so-called "Super Congress" change into their red underwear costumes. It's not a solution because it merely defers the problem until later - as I mentioned earlier, and as should be painfully obvious by now.

I'd like you to show me, however, where I claimed that it was "purely" political. Obviously he's also trying to create a semblance of stability by agreeing to this half-assed plan, hoping that the credit agencies are going to fall for it. That doesn't change the fact that it is indeed a political move.

Lord Zentei:
I've heard about today, but are you sure it's caused by the threat of US government default? I'd be more likely to believe a fall now is due to the anti-growth spending cuts we've been promised than fears of an averted default. Your article also cited more concerns over Europe than the United States.

Yeah, there's a whole lot of other bad shit causing the current volatility, but the US debt crisis is certainly part of it.

[Flagg]

Gods, but you're an obnoxious blowhard. Don't you understand that the deal doesn't come close to addressing the scale of the debt crisis? Or are you too busy apologizing for Obama to think about what it will take to resolve it?

I'm not "apologizing" for shit, I'm simply pointing out how dumb you are by your insisting that pushing the next debt ceiling vote to 2013 was purely political on Obama's part. You keep insisting there was no solution, so if there wasn't, why haven't we defaulted? If there was no solution, why aren't we talking about a possible default in a few months? If there was no solution, why haven't we been downgraded by every credit agency?

The other credit agencies have threatened to downgrade the US too - they may be waiting to see what happens after the so-called "Super Congress" change into their red underwear costumes. It's not a solution because it merely defers the problem until later - as I mentioned earlier, and as should be painfully obvious by now.

So by your definition, the only solution to the debt ceiling would be to get rid of the debt ceiling? Wow, we agree on something.

I'd like you to show me, however, where I claimed that it was "purely" political. Obviously he's also trying to create a semblance of stability by agreeing to this half-assed plan, hoping that the credit agencies are going to fall for it. That doesn't change the fact that it is indeed a political move.

You didn't, that was me being hyperbolic. But what would you suggest he have done, let Mitch McConnell shoot the hostage and allow the economy to go down in flames? And again, it's not a "semblance of stability", it's actual fucking stability because there isn't a threat of imminent default to get Wall Street's panties in a twist over.

[Flagg]

Lord Zentei:
I've heard about today, but are you sure it's caused by the threat of US government default? I'd be more likely to believe a fall now is due to the anti-growth spending cuts we've been promised than fears of an averted default. Your article also cited more concerns over Europe than the United States.

I agree that today probably had nothing to do with the default being averted, but more likely shit in Europe, the GOP raping the hostage, and the threat of the S&P downgrade that was rumored (and has come to pass).

What I'm talking about is the drop in stocks in the weeks prior to the debt deal being reached.

[aerius]

As we were not privy to the negotiation sessions it is impossible to determine if 4 trillion in cuts was ever on the table or not. It is clear, however, that even if it was on the table at some point Congress was never going to agree to that number.

We'll never know for sure if the minutes for the meetings aren't released (yeah, like that'll ever happen), but as far as I know, and I've been keeping very close track of the situation*, no one on either side proposed a credible budget. The Dems didn't, the GOP didn't, and Obama didn't, that's why I said they were all equally responsible. Everyone dropped the ball on this one.


*between my wife & myself we have the full text of all the proposed bills from both sides, all the transcripts from Congress, and all the CBO costing reports and other materials.

[Lord Zentei]

The other credit agencies have threatened to downgrade the US too - they may be waiting to see what happens after the so-called "Super Congress" change into their red underwear costumes. It's not a solution because it merely defers the problem until later - as I mentioned earlier, and as should be painfully obvious by now.

So by your definition, the only solution to the debt ceiling would be to get rid of the debt ceiling? Wow, we agree on something.

Now where did I say that?

I'd like you to show me, however, where I claimed that it was "purely" political. Obviously he's also trying to create a semblance of stability by agreeing to this half-assed plan, hoping that the credit agencies are going to fall for it. That doesn't change the fact that it is indeed a political move.

You didn't, that was me being hyperbolic. But what would you suggest he have done, let Mitch McConnell shoot the hostage and allow the economy to go down in flames? And again, it's not a "semblance of stability", it's actual fucking stability because there isn't a threat of imminent default to get Wall Street's panties in a twist over.

Firstly, when bargaining with someone, you start off making more demands than you actually need, not less. There's also the 14th amendment solution, if all else fails. But the problem is that this has been festering for a long time, the Republicans have learned time and again that they can get away with all kinds of crap as long as they dig their heels in.

[J]

Nope, I'm saying the Republicans and the Tea Party deserve more than an even share of the blame, more than 50% on this one. There's fault to find with Obama on this one, but he's not the worst player in THIS particular event.

I think it spreads around equally, no one, not a single person in the entire US government put forth a workable plan for meeting the target set by S&P. Some were closer than others but none of them were even in the ballpark, or the county, they were all two states over in the wrong direction. The Obama/Reid plan was better than the one proposed by Boehner, though frankly that's much like comparing horse & elephant droppings; they're both big smelly piles of crap.

[Flagg]

The other credit agencies have threatened to downgrade the US too - they may be waiting to see what happens after the so-called "Super Congress" change into their red underwear costumes. It's not a solution because it merely defers the problem until later - as I mentioned earlier, and as should be painfully obvious by now.

So by your definition, the only solution to the debt ceiling would be to get rid of the debt ceiling? Wow, we agree on something.

Now where did I say that?

Repeatedly throughout this thread. You said "that merely defers the problem (the debt limit) until later". So by that logic every single debt ceiling vote has simply been kicking the can down the road for the next congress or President to worry about. So the only solution is to end the debt ceiling altogether.

I'd like you to show me, however, where I claimed that it was "purely" political. Obviously he's also trying to create a semblance of stability by agreeing to this half-assed plan, hoping that the credit agencies are going to fall for it. That doesn't change the fact that it is indeed a political move.

You didn't, that was me being hyperbolic. But what would you suggest he have done, let Mitch McConnell shoot the hostage and allow the economy to go down in flames? And again, it's not a "semblance of stability", it's actual fucking stability because there isn't a threat of imminent default to get Wall Street's panties in a twist over.

Firstly, when bargaining with someone, you start off making more demands than you actually need, not less.

Of course, and Obama has failed to do this, something that annoys the piss out of me. Assuming that he actually wanted a Public Option.

There's also the 14th amendment solution, if all else fails.

But all else didn't fail. He had a deal, even though it was shitty. And I really don't want to have to live through the impeachment of another Democratic president, thanks.

But the problem is that this has been festering for a long time, the Republicans have learned time and again that they can get away with all kinds of crap as long as they dig their heels in.

And Obama fought them almost to the point of a default.

[Broomstick]

Nope, I'm saying the Republicans and the Tea Party deserve more than an even share of the blame, more than 50% on this one. There's fault to find with Obama on this one, but he's not the worst player in THIS particular event.

I think it spreads around equally, no one, not a single person in the entire US government put forth a workable plan for meeting the target set by S&P. Some were closer than others but none of them were even in the ballpark, or the county, they were all two states over in the wrong direction. The Obama/Reid plan was better than the one proposed by Boehner, though frankly that's much like comparing horse & elephant droppings; they're both big smelly piles of crap.

Well, fuck, what you're saying is that if we couldn't have a perfect plan we should let the Tea Party shoot the hostage and everyone's economy go down the shitter, because THAT disaster is preferable to a plan that avoid an immediate default and leaves open at least the possibility that this mess can be weathered. That is ludicrous, absolutely ludicrous.

Sure, if a corner of your garage is on fire the best solution is a professional fire department, but if you can't get that at least get a bucket brigade going, don't just throw up your hands and not even try to mitigate a bad situation.

If 4 trillion in cuts was impossible to achieve then it was Obama's obligation to get as much cut as he could. Could he have done better? Yeah, probably. But what did happen was better than him simply not trying in truth and letting the US government actually default, actually shut down, and actually stop paying its bills. If the Tea Party had been willing to actually compromise we still may not have gotten 4 trillion in cuts, but we would have gotten better and a demonstration they weren't batshit crazy uncompromising nutbjobs ideologues would have done much to mitigate any remaining concerns about stability and reliability.

Your "they're all equally at fault" is the Republican/Tea Party line which they throw out to handwave away the fact that they were the main drivers in this crisis.

[Flagg]

Don't most first world countries just pass the budget and take out debt then, rather than having a ceiling? That's the method I'd go with, anyway. And the GOP already takes the budget hostage, remember the threatened government shutdown?

[Broomstick]

BTW, re broomstick: don't forget another way to close a deficit is to raise taxes. It doesn't all have to be cuts. But nobody seems particularly keen on that idea, on either side of the aisle.

Oh, I remembered about raising taxes - but given today's political nuttery that was even more of a non-starter than 4 trillion in cuts.

If we HAD increased revenues that also might have mitigated some of the issues with cutting less than 4 trillion. Wasn't going to happen, though.

[J]

Well, fuck, what you're saying is that if we couldn't have a perfect plan we should let the Tea Party shoot the hostage and everyone's economy go down the shitter, because THAT disaster is preferable to a plan that avoid an immediate default and leaves open at least the possibility that this mess can be weathered. That is ludicrous, absolutely ludicrous.

The $4 trillion in reductions (done through whatever combination of taxing & spending is desired) being asked of by S&P would still result in an eventual debt default so it's still not anywhere close to being a "perfect plan", a perfect plan is balancing the budget and running a surplus within 5 years. $4 trillion over 10 years can be seen as the minimum required to preserve America's AAA rating and hold things together for a little while longer while working towards something better. We didn't even get that. Thus the downgrade, which makes things very, very dicey.

Is it better than an outright default? Sure. But only if everyone uses the time wisely and works real fast (like forget your summer break fast, get your butts back in there and work 24/7 till it's done fast) to come up with a proper fix to avoid a default. Otherwise it's just kicking the can and when the default eventually takes place it'll be a lot worse than if it happened on August 2nd. I don't see anyone doing that work though which leaves me quite concerned.