S&P Downgrade Heralds A New Financial Era For The United States

PIMCO :

There will be endless debate on whether S&P, the rating agency, was justified in stripping America of its AAA rating and — adding insult to injury — even attaching a negative outlook to the new AA+ rating. But this historic action has now taken place, and the global system must adjust. There are consequences, uncertainties, and a silver lining.

Read the whole story: PIMCO

Comments

[gakabani]

01:54 PM on 08/07/2011

Where is Lou Dobbs? The guy predicted this fiasco 5 years ago.

[sailor422]

11:30 AM on 08/07/2011

The S&P downgrade was a reaction to the politics surrounding the debt ceiling debate more than the credit worthiness of the US. Does anyone seriously think France is a better bet than the US when it comes to paying off a bond?

[Sansculotte]

01:53 PM on 08/07/2011

So you think credit worthiness and politics are unrelated? Seems to me that fiscal policy is very political.
The Tea folks were willing to bring on a default - for political reasons. And since they and their hostages in the Republican leadership have already announced their intention to do the exact same thing next time the Debt Ceiling needs raising - seems like S&P made a pretty accurate call. So - since France (and all other industrial countries) does not even have a Debt Ceiling - Yes - I do think France is a better bet than the US.

[sailor422]

03:06 PM on 08/07/2011

LOL I agree the teabaggers have captured the Republican leadership, and I think that will hurt them in 2012, but to say that your money is safer in French bonds over US T bills shows a lack of understnding of financial matters.

[DRaymond]

09:08 PM on 08/07/2011

Yes, France is a better bet for one simple reason: It does not have a debt limit that one party can hold hostage as a political bargaining chip.  Now that part of the US congress has demonstrated that they are willing to do that then the US inherently becomes more risky.

[smiththomas]

11:20 AM on 08/07/2011

His ideas of redistribution, the environment, and labor union backing will cause him to be known as the stagflation president. I guess there will be a large group that will support the president as he continues to decimate the living standard of the poor and middle class with in increased cost of basics.

[mandalay007]

10:23 AM on 08/07/2011

am I the only one questioning the "timing" on this ----right after the Thurs. fiasco??? AND, should SP, Moody's et al, have much credibility anyway????? DID they note participate in the mess of 2008 when CDO's, derivitives, et al were callously overlooked by the rating agencies. Perhaps Bilderberg has decided to tank us cuz the Carlyle Group and other of the swell ones have not eaten at the right trough---

[sonoffestus]

09:54 AM on 08/07/2011

Just the kick-off of the "Post American Empire".................SOF.

[Moses the Raven]

09:29 AM on 08/07/2011

recent attacks on Tea Partyers are more than dangerous and hypocritical. They represent the gradual dissolution of America’s social compact. We are no longer one nation, but two – liberal and conservative. Blue state versus red state; left versus right; progressivism versus traditionalism. The country is splintering along ideological lines. In some ways, it was inevitable. The 1960s unleashed powerful forces — militant feminism, anti-Americanism, pacifism and the sexual revolution. Radical leftists have ruthlessly pursued their goal to erect a multicultural social democracy. Having slowly taken over the commanding heights of popular culture, the universities, public schools, the courts, the establishment media and the mammoth federal bureaucracies and government agencies, they are on the cusp of achieving their national transformation. The Obama presidency is the culmination of the 1960s left’s long march to power.

This is why Tea Party activists are so reviled by liberal Democrats: They are traditional America’s last line of defense.

[cajennin]

11:47 AM on 08/07/2011

This is in way is a brief re-visitation to the Vietnam (baby boomer) era.
The war is over, attempts to re-write it will fail.
Just as pretending to undo the social changes in the 60’s will fail.

Soon, looking in the rear view mirror, historys’ autopsy will reveal the complicity of racist, low information voters w / their’ phony, race baiting, well heeled handlers along w/ the far rt. “christian” Armageddon peddlers.

As the next generation adjusts that rear view mirror sadness will dominate for not taking the keys away from Grandma & Grandpa sooner rather than later.

[Sansculotte]

02:00 PM on 08/07/2011

The only constant is Change. "Traditionalism" is inherently doomed. Accept and embrace that fundamental principle - or spend your life in impotent rage.
I hate Tea.

[Moses the Raven]

09:28 AM on 08/07/2011

Leftist expediency now requires that the most heinous, reckless and degrading comments be used. Tea Partyers are not simply being slandered, they are being dehumanized. Ironically, it is liberals who are paving the way for potential political vi olence. Terrorists, hos tage-takers, suic ide bo mbe rs, n eo-Na zis, the Chri stian Tal iban — all of the epithets regularly thrown at Tea Party members by ra bid progressives — eventually foster one overriding emotion: hatred. It is not much of a leap for some der anged Democratic activist to conclude that the only way to defeat the phantom specter of marching right-wing jihadists is to slaughter them. The Bla ck Pant hers, the W eathermen, the Sy mbionese Liberation Army, the Un abo mber — the U.S. radical left has been littered with v iolent movements marked by the irrational lo athing of a mena cing Middle America.

[Sansculotte]

02:03 PM on 08/07/2011

Hmmm? How many abortion clinics have been bombed - doctors shot - black people lynched - by the Left?

[EdRea]

09:26 AM on 08/07/2011

' For the sake of their country and the wider global economy, both parties should resist the urge to begin bickering. Instead they should seize this potential “Sputnik Moment” — a visible shock to the national psyche that can unify Americans around a common vision and a renewed sense of purpose — that of halting gradual secular decline by putting the country back on the path of high growth, job creation and financial soundness. '

A highly idealistic statement, given the current cultural divide/polarized political environment.
The GOP is hobbled by the Tea Party and can not work in a truly bipartisan fashion. They will continue to demand "my way or the highway" -- while progressives/liberals will continue to feel as though Obama and Congressional leaders are giving away the farm for the sake of the Golden Mean.

A huge cultural shift in thinking over partisan politics would have to occur and this doesn't seem likely any time soon. If people don't start to get it, this may last until their children are of age to vote (provided they are free enough from their parents' influence to see the futility of the current polarized atmosphere). In the meantime, the USA will become a nation in decline as the two parties bicker and remain resolute in not finding a "third way" that actually works for everybody.

[bealebkk]

07:45 AM on 08/07/2011

Where is Guy Fawkes aka’V’
…when you need him

[castlemike]

12:18 AM on 08/07/2011

The Debt Deal and the Progressive Crack-Up

http://online.wsj.com/article/SB10001424053111903366504576488030733181992.html

One might view the debt deal as evidence that democracy in America, though often unlovely in execution, is alive and well. After all, President Obama's $800 billion-plus stimulus package was passed by Congress in early 2009 on a mostly party-line vote. It was followed in April by his $3.5 trillion budget, enacted without a single Republican vote, that contained sizeable across-the-board funding increases for federal departments and agencies. The president devoted the next 12 months to passing costly and unpopular health-care legislation that dramatically increased government's responsibility for regulating approximately one-sixth of the nation's economy. Employment hovered at approximately 9% and still does.

[Izzy Serious]

07:04 AM on 08/07/2011

Mike, the U.S. has the best democracy money can buy. Are things any better where you live?

[srooge]

12:06 AM on 08/07/2011

Green Star loves Aussie bonds.

[castlemike]

11:19 PM on 08/06/2011

Dominoes are starting to Fall.

It is hard to imagine that, having downgraded the US, S&P will not follow suit on at least one of the other members of the dwindling club of sovereign AAAs. If this were to materialise and involve a country like France, for example, it could complicate the already fragile efforts by Europe to rescue countries in its periphery.

http://www­.zerohedge­.com/news/­it-just-we­nt-bad-far­-far-worse­-germany-s­ays-italy-­too-big-ef­sf-save-re­fuses-carr­y-euro-bai­lout-

It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

[lcpnr]

11:05 PM on 08/06/2011

The obama era-but it was planned to start just after his second term began

[srooge]

10:59 PM on 08/06/2011

Bye bye dollar standard, hello lower standard of living, thank you goldmansucksfeD.

[Keyop]

10:14 PM on 08/06/2011

Bushs 2 unpaid for avenge daddy wars are the root of the problem and nobody will admit it. Borrowing money from communist countries to spread democracy is a sick joke. Stop the wars, tax the rich, nationalize healthcare. And punch Ickabod Ryan and Buddy Holly Cantor in the face.