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Old 08-05-2011, 08:15 PM   #41
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Well it's a done deal:

S&P Downgrades US Credit Rating to AA-Plus

S&P downgrades the US credit rating from AAA to AA+. Outlook remains negative.
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Old 08-05-2011, 08:27 PM   #42
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and here it is - S&P downgrades U.S. credit rating - Aug. 5, 2011
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S&P Downgrades U.S. Debt for First Time
Old 08-05-2011, 08:27 PM   #43
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S&P Downgrades U.S. Debt for First Time

From WSJ: S&P Downgrades U.S. Debt for First Time
Quote:
S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy long-term picture for America's finances. It downgraded U.S. debt to AA+, a score that ranks below Liechtenstein and on par with Belgium and New Zealand.
Thoughts on the impact?
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Old 08-05-2011, 08:30 PM   #44
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I predict Congress will address the problem quickly. Citing a need to raise revenues, a new, high tax on "bond rating firms with bearish outlook on US debt" will be passed and signed.

Senator X: "There, we did something about it. How do they like them apples?!"
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Old 08-05-2011, 08:48 PM   #45
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Here's a photo if you don't want to look at the link....
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File Type: jpg 110805debt-downgrade-wide2[1].jpg (32.5 KB, 197 views)
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Old 08-05-2011, 09:23 PM   #46
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Monday should be interesting. So where were these eagle eyed bond mavens when the MBS's were being rated?

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Old 08-05-2011, 09:25 PM   #47
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Originally Posted by TromboneAl View Post
This is great news, about the white flag. Where is that displayed? Do they display it when the ring the bell?

When you start spending freely. I will consider that the white flag and jump back in !
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S&P downgrades U.S. credit rating for first time
Old 08-05-2011, 09:35 PM   #48
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S&P downgrades U.S. credit rating for first time

S&P downgrades U.S. credit rating for first time - The Washington Post
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Old 08-05-2011, 09:37 PM   #49
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Read the report. Obvious vote of no confidence in our current Congress and President.
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Old 08-05-2011, 09:40 PM   #50
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Look out below!
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Old 08-05-2011, 10:35 PM   #51
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Just wait for all the commentary from other countries on this one. Think I will stuff my ears and close my eyes. I agree gsparks2...no vote of confidence in our government. Wonder if this will shake them up enough?
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Old 08-05-2011, 10:52 PM   #52
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The downgrade reflects recognition finally that the emperor has no clothes. The debt-ceiling bill was simply another in a long line of phony legislation that uses tricks in an attempt to hide the true nature of our economic condition. Follow the link to "Federal Budget 101," which uses a great analogy to explain how ineffective this latest legislation is in resolving our fiscal crisis.
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Old 08-05-2011, 11:03 PM   #53
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I would agree on the "vote of no confidence" idea if these ratings agencies had any credibility - I have "no confidence" in them after all their "AAA-rated" toxic securities blew up 3 years ago.
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Old 08-05-2011, 11:15 PM   #54
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So Anyone care to look into their crystal ball and tell us what's going to happen with this downgrade??

Is it time to flee and move to cash??
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Old 08-05-2011, 11:22 PM   #55
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Hey, maybe the rest of the world will conclude the U.S. is too big to fail and bail us out...
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Old 08-06-2011, 12:50 AM   #56
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So Anyone care to look into their crystal ball and tell us what's going to happen with this downgrade??

Is it time to flee and move to cash??

Even cash will give you problems; low rates of return from CDs and savings accounts; inflation which is inevitable will kill your buying power. Carrying large sums of cash invite crime.

There really is no place to hide - even foreign currencies such as the Euro, Yen and Sterling are struggling with their own troubles.

I will be hanging on to my bonds and dividend stocks- will probably still suffer principal loss, but at least they give a steady stream of income now that I'm ER with no pension, and not being able to take Soc Sec as yet.
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Old 08-06-2011, 01:05 AM   #57
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I would agree on the "vote of no confidence" idea if these ratings agencies had any credibility - I have "no confidence" in them after all their "AAA-rated" toxic securities blew up 3 years ago.
I agree on the irony of the ratings agencies, but a broken clock ....

Still I expect that we will see the 4 AAA US companies JNJ, MSFT, XON, and ADP to eventually end up with lower interest rate cost than the US government. I am surprised we haven't seen before. I think if the companies get creative they'll do even better.

Imagine that Exxon starts issuing oil bonds. For the price of 10 barrels of oil today, Exxon agrees to give me 10 barrels of oil in Aug 2021. As interest payment they give me .25 barrels each year which can be easily converted in the currency of my choice Euro/Yen/$/RMB. That is the equivalent of a 10 year US T-bond with a 2.5% interest rate.

For me personally eventhough the interest rates are nominally the same, my confidence that the Exxon will be able to give me 10 barrels of oil,and 2.5 barrels in interest payments over the next 10 years is much higher than that Uncle Sam will give me dollars that are worth much in 10 years.
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Old 08-06-2011, 01:33 AM   #58
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In something I read tonight, the analysts said Mr. Market had already factored this downgraded rating possibility into things. I don't know exactly what that means will happen on Monday.
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Old 08-06-2011, 05:26 AM   #59
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Have any of you read Would You Lend Money To This Family? - Registered Investment Advisor yet? Better yet, have any of you responded to Scott Burns's request?
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Old 08-06-2011, 05:39 AM   #60
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Hello Bestwifeever - I predict the Dow will be up on Monday. Buy when people are afraid, sell when people are greedy.
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I don't know exactly what that means will happen on Monday.
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