T Nation

America's AAA Rating


#1

Before his inauguration the idea that America's triple AAA rating could be put at risk in a very short time was considered by the punditry as ludicrous. Yet Obama has manage to do just that. Thanks to his ideologically driven economic lunacy it now seems that treasuries have already lost their glitter as the world's safest investment haven. An accomplishment that no other president in American history came close to achieving.

We now find that Berkshire Hathaway was selling two-year bonds that had a lower interest rate than two-year treasuries while Johnson & Johnson and Lowe have been borrowing at lower rates than the Obama administration. The same goes for Procter & Gamble Co. Moreover, about ten days ago Moody's publicly warned that treasuries are close to losing their triple AAA rating.

Let us try to put this in perspective. Under the brilliant financial leadership of one Barack Hussein Obama USA Incorporated -- the world's largest company with 300 million captive shareholders and astronomical resources at its disposal -- can no longer borrow at a lower rate than a certain octogenarian and a company that manufactures pharmaceuticals and medical devices. I guess this is one of the reasons Obama told those Hollywood airheads that "You ain't seen nothing' yet!"

http://www.marketoracle.co.uk/Article18249.html


#2

I don't have a "dog in this fight" but do you honestly believe our current economy is the sole reflection of the Obama's presidency? So you're implying our economy, as massive as it is, is capable of stopping and turning on a dime?


#3

Yes, there is such a thing as a "last straw" effect; such a thing as avoiding adding the last straw; and such a thing as throwing gasoline on the fire.

Obama has done much towards the first, did not do the second, and certainly did the third.

Why is it unreasonable that when multi-trillion dollar deficits over 10 years were already projected, a US President's response was to add repeatedly yet more trillions in spending, that this would cause a loss in credit rating that could have been avoided had the response instead been to get spending under control or at the very least not to blow it up yet further?


#4

I guess Moody's Rating Service are a bunch of racists.


#5

Yea, well that's a given.


#6

A lot of the language in that article is PURE spin. First, unrelated to the spin but related to the shittiness of this article, the author says Obama is intentionally destroying our economy. But, I know where you all stand on that.

Second, Moody's actually said (and this refers to the U.S., Britain, Germany, France, the Nordic countries and Spain) that our rating is "CURRENTLY STABLE." All caps for emphasis.

To be fair, they did also say that our distance to downgrade has substantially diminished. This is certainly not good, but it is FAR from the apocalypse conjured up by the author of OP's article.

I think you guys need to recognize that the president has done a fairly good job containing a meltdown decades in the making.


#7

Ah, you think it is already over.


#8

LOL, please tell me that you're kidding. Go ahead and love the guy, but please don't say that he's done anything to help the US out of this recession. Do you really think scaring the crap out of small business by passing this health care bill has helped? Obama is an unmitigated disaster of epic proportion.

Wow, some people are just blind.


#9

Blame Bush!


#10

I don't think you grasp the magnitude of the meltdown in our financial and real estate markets.


#11

I don't blame Bush. I blame the Fed under Reagan and Bush Sr.

What the Greenspan Fed did to collapse our economy:

1)Minuscule interest rates=Free money--->Collapse in Real Estate/Subprime Markets.

2)Allowed I-Banks to increase their debt to capital ratios to 30 to 1 and greater. THAT IS RIDICULOUS! You are certainly illiquid and essentially insolvent (almost bankrupt) at that point.

Bad Monetary Policy + Deregulation brought us to this point. TARP (proposed by Bush) and the Recovery Act saved us from a depression.


#12

And how does the chosen one address this? Spend spend spend.

If you were to run into serious financial difficulty, would you spend your ass off?


#13

Check out History for what actually happened during the after the 1929 crash. The Government spent, spent, spent, this was a temporary fix and the economy started to feel better, and started to move up. Then inflation set in, and then we got the Great Depression, and the market went lower than the 1929 drop. Spending is a temp fix. Following WWII we were the only country with a large supply of Factories so that is why our Economy did so well. Industry and Companies, not the Government.


#14

Had Hoover "spent his ass off" earlier rather than later, he would have been remembered as the man who got us out of the Depression. He did it too late so FDR and his supporters accused him of socialism and then were able to later take credit for the plans he conceived and initiated.

In short, yes, you are supposed to spend, spend, spend your way out of a recession.


#15

His solution, if you can call it that, is to increase regulations/taxes in peoples' lives. Ever heard of Diocletian?

"Under his administration a complex taxation system was created which allowed for regional variations of harvests and trade. Areas with more fertile soil or wealthier trade were hence taxed harder than poorer regions.
In AD 301 the Edict of Maximum Prices imposed throughout the empire tried to fix prices and wages in order to curb inflation. The system however did more damage than it did good. Regional price variations no longer existed and therefore trade suffered. Many goods also became unprfitable to sell, which therefore also meant that trade in those goods simply disappeared."


#16

Yep, it's been working hasn't it.


#17

And YOU don't grasp the magnitude of how little Obama has done to help the crisis. The guy is disconnected from reality. Almost 90% of all job growth is from small business. What has he done to help them? I've already told you what he's done to harm small business. They're so scared right now as they have a good idea how that ludicrous health care plan is going to harm them.

COME ON BIG MOUTH tell us SPECIFICALLY what your ultra left leader has done for the economy. I'm sick of your constant liberal drivel with NOTHING what so ever to back it up.


#18

Exactly, and as anyone who understands the economy knows that harms jobs growth. There are no economists who think this is a good idea,other than the few who are currently being paid directly by this administration. But we don't have a President who understands or even cares. He is there to push his ultra left agenda and it matters not what the people want.

And, he will pay for this dearly with a republican revolution in November which will take back the House and Senate and leave him a toothless tiger.


#19

This is just silly. People not paying their mortgages is what caused the collapse. Why were banks loaning to people that couldn't pay their mortgages?

Don't put your money in these banks.

So wrong in so many ways. Bad monetary policy is fuel for any speculative bubble, but was not the cause. This one was quite special becuase banking is the most regulated industry. The level of political stupidity and bullying was quite spectacular. Deregulation had nothing to do with it.