The S&P downgrade story appears to have fizzled out:
It’s a real shock that these guys missed the entire financial disaster coming.
Although I am sure there will be some awesome conspiracy theories about government bullying floating around.
Reader Interactions
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Alex S.
You must have poor standards to work at S&P.
Edit: Meh, Krugman was there first.
http://krugman.blogs.nytimes.com/2011/04/19/poor-standards/
dmsilev
A trillion here, a trillion there, pretty soon you’re talking real money.
Villago Delenda Est
Let me guess…S&P borrowed Megan’s calculator for this…
Omnes Omnibus
@Villago Delenda Est: Win.
Reality Check
I guess Obama had Bill Daley and Daley’s buddies “persuade” them that they made an “error”. Gotta love Chicago.
jacy
From the title I thought for sure this was another McMegan post. Then I thought, no, not two McMegan posts in a row. Then I remembered where I was.
Villago Delenda Est
@Reality Check:
You know, I wish Obama would unleash his “Chicago Way” minions on shitheads like you.
dmsilev
@Reality Check:
Don’t look now, but Rahm Emanuel is hiding under your bed, just waiting for you to go to sleep.
RossInDetroit
Considering S&P’s track record I think the WH was justified in saying “Not so fast, there. Let’s see your work on that problem.”
beltane
A rating’s agency that’s off by 2 trillion dollars probably shouldn’t be in the ratings business. But I’m just a dumb peasant so what do I know.
PeakVT
Although I am sure there will be some awesome conspiracy theories about government bullying floating around.
No, it’s pretty much an open secret S&P was trying to bully the US government.
rea
It’s a real shock that these guys missed the entire financial disaster coming.
Not seeing things is their business model. They missed the financial disaster coming because they had strong financial incentives not to see things like impending financial disasters.
General Stuck
Great, a math challenged financial ratings agency with the power to destroy.
Omnes Omnibus
@Reality Check: Right, because the guy with the FBI, SEC, CIA (CIA, fer gawd’s sake), IRS, and DEA among others at his command would need to to go to the Chicago Machine (what’s left of it) to get people to rethink something.
Omnes Omnibus
@beltane:
Well, it appears that you you know that:
Villago Delenda Est
@rea:
Which is why it seems that “fiduciary responsibility” has acquired a new meaning over the last 30 years: “grab the cash and stick it into a Caymans account.”
Nic
It’s amazing that after 2008 anyone still listens to these clowns.
a hip hop artist from Idaho (fka Bella Q)
@Villago Delenda Est: Where would you like your internets delivered?
@Omnes Omnibus: Now you know very well that the CIA may not lawfully engage in its chartered activity within the confines of the actual US…
O/T -thank you for your kind thoughts; they are much appreciated.
Cain
Sorry O/T, but Israel seems to be having a bit of their own protests on social justice. Quite cool to see.. the interesting bit is that both the left and the right seemed to have joined hands against govt for taking their tax dollars and giving it to special interests. Sound familiar?
It’s the atlantic, so remember you’re paying Megan McCurdle’s salary :-)
here
JPL
John, TGIF.. It’s time to put fake economists to bed and let the rest of us drool over pictures of Tunch, Lily and Rosie.
You do notice that I put them in order of importance.
PurpleGirl
We were waiting for the Galtian overlords to reign in the teahadists on the debt thing… instead the overlords took various S&P execs aside and pointed out how painful kneecapping is.
John O
@UnReality Check:
Welcome to planet Earth!
I’m a Chicago native. You might be surprised, but the ’20’s movie and lore version of Chicago is not actually how it is.
ThatLeftTurnInABQ
@General Stuck:
Default, dear Brutus is not in our stars, but in ourselves, that we are Untermenschen.
jl
They looked around and maybe one else was likely to leap.
Remember Keynes’ bankers: never fail alone.
They
needed some story to cover theirvery professionally corrected their computational error.Villago Delenda Est
@John O:
Unreality Check is one of those guys who, in the extremely unlikely event his ass was ever in boot camp, would be one of the special, intense objects of drill sergeant attention because all his moves would be of the John Wayne variety.
Which get you killed in actual combat. Which, on reflection, might be helpful to your unit in the long run, as your replacement in the MTOE might be less of a moron than you.
TK-421
You know, I used to think we were ruled by people who had not earned their wealth/power/influence and therefore did not deserve our deference. I thought they were mostly just regular people who were susceptible to the foibles of being human, just like the rest of us.
I’ve changed my position. Now I think we’re ruled by arrogant and moronic dickheads.
JPL
As much as I would like to imagine the President taking S & P aside and giving them an offer they can’t refuse, it’s likely they made a math error.
Omnes Omnibus
@Villago Delenda Est: Those guys get others killed along with themselves.
hhex65
@Reality Check: Well, you better kiss O’s ring then, he just saved your country’s AAA rating.
PeakVT
@Nic: The issue is that some funds or other entities might be legally or contractually obligated to do so.
Villago Delenda Est
@Omnes Omnibus:
Which is the primary problem with them in the first place.
Linnaeus
Wow. And we still have to take these jokers seriously?
The Sheriff's A Ni-
Candygram for Mr. Mongo!
Maude
@beltane:
Gotta say, they were off by quite a bit. They shoulda taken off their shoes to count.
Comrade Luke
@TK-421: Cowards and incompetents is my standard description.
Joseph Nobles
Downgrade just happened according to Reuters – down to AA+ with negative outlook.
http://twitter.com/#!/Reuters/status/99635144515796993
BGinCHI
What does S&P stand for?
Stupid and pathetic comes to mind.
The rating agencies remind me of the fathers who used to coach little league when I was a kid. They made a lot of noise but not a lot of sense.
And they were drunk.
Reality Check
@hhex65:
No, he didn’t:
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806
Hope! Change!
cathyx
I guess the banking cartel gave S&P a talking to.
Linda Featheringill
I would imagine the agency is revising its rationale, not rational. Yes?
JPL
@Reality Check: It’s difficult to respond because the alternative was a clairvoyant who could see Russia from her house and a person who wanted to finish the VietNam war.
edit..yeah hillary..I hope you realize at this point in time we would know how big Bill’s really is..
Seebach
Um… looks like we were downgraded anyway.
jl
OK, they did it. Will be interesting to watch. Will others downgrade too, and if so, what will be their explanation?
If nothing much happens to the US bond market, what will that do to S&P’s reputation?
Litlebritdifrnt
@Reality Check:
You know I belong to a forum named “The Fogbow” we work hard to debunk the birfers, one of our most respected members there is know as Reality Check, he even has his own blogtalk radio show. Every time I see one of your posts I think “really RC?” then I realize that you are not RC but just an asshole.
chopper
ah, S&P. putting the ‘douche’ in ‘fiduciary’ for 70 years.
Elie
The Reuter’s information is not replicated elsewhere. Why dat?
PeakVT
Felix Salmon has some good (pre-downgrade) comments here.
Emma
@Reality Check: And you think that’s a bad thing why?
JPL
BTW did they downgrade when Bush was in office?
Maude
NYT has that SP held off downgrade after Treasury pointed out errors.
Elie
There is so much of this that I do not understand. Why the conflicting info, why the error and such and then why they go on to do it anyway — after the markets close on a Friday?
This all seems very very weird to me…
RandyH
Olbermann just reported “Breaking News” that AP says S&P confirmed that it WAS downgraded to AA+.
Sentient Puddle
What the fucking fuck? And yet S&P STILL pulled the trigger.
chopper
shit, the fuckers still did it. that takes balls. ‘hey, we’re going to downgrade your debt. wait, what? our math is totally off? fuck you for making us look stupid!’
Donald G
Reuter’s often gets shit wrong. Let’s see if they correct their story… or if other outlets confirm it before panicking.
JPL
@PeakVT: That was really good and Salmon is correct in his assumption that the repubs think nothing of defaulting. We want to spend but not pay.
Comrade Mary
So S&P, good, honest citizens that they are, will also confirm reports that Republican intransigence was one of the reasons for the downgrade, right? Right?
Donald G
Okay, other than AP and Olbermann. :-)
Linnaeus
CNN’s reporting the downgrade to AA+ as well.
Elie
Yes, CNN reported with no details
Maude
@Donald G:
Reuters still had the downgrade. NYT says not. There’s something wrong with this whole story.
arguingwithsignposts
It could be that this action will finally put to bed the lie that the Ratings Agencies are rational actors.
then again, maybe not.
Comrade Mary
But other than Reuters, AP, Olbermann and CNN, what have — oh, never mind.
Danny
OT, but I had a thought on our recent shit-sandwich debt ceiling deal. I was reading this post on The Corner @ NRO and no doubt there is some real concern among the NatSec hawks over the automatic defense cuts in the trigger for pt 2 (the committee).
So the dems seem to plan to use national security as a wedge against the republicans. IOW, they’re going to argue that not only were the republicans willing to risk default over tax cuts for billionaires, now they’re going to both cut medicare and axe national security over tax cuts for billionaires.
Whatever the outcome – and letting the trigger go off would be a pretty shitty deal imho – at least the dems are doing a good job of illustrating to the public over and over how committed tea party republicans are to those tax cuts for the rich at the expense of pretty much anything else.
Linnaeus
Yeah, something doesn’t smell right here, unless there’s the usual sorting out of details going on.
aisce
not to rain on the schadenfreude parade, but it’s likely the “math error” is a desperate treasury spinning the press.
it’s not likely so much an error in the calculation itself as it is two credibility free institutions disagreeing over an arbitrary (and certain to be inaccurate) debt baseline.
this (and the downgrade itself) is all just stupid posturing.
Rommie
Our Galtian overlords don’t like getting shown up, it appears. How dare someone question their numbers!
MikeBoyScout
There is only one way to correctly interpret this and the slew of other stupid events… the Onion has accomplished a silent coup d’etat over the entire political and economic process.
Seriously, a company whose business is evaluating financial statements can’t get the math right?
From Rupert’s financial rag:
Yeah, I bet he didn’t.
JPL
@Comrade Mary: In the magic land of foz they will mention that some don’t want to pay for their obligations because it doesn’t fit with their narrative and that concerned rating agencies.
Dennis SGMM
The Financial Times is reporting the downgrade to AA+.
TK-421
Am I to understand that these fuckers screwed up their math by $2 trillion, and then decided “eh, it doesn’t matter” and downgraded US debt anyway?
So…according to the S&P, did that $2 trillion error matter, or not? If it didn’t matter, then WTF was their logic when they insisted a week or so ago that the US must cut $4 trillion in order to keep the AAA rating? If $2 trillion doesn’t make a difference to them, then why didn’t they just insist on 2 or 6 or 0 or 8 or 100 trillion?
This isn’t based on numbers, I think. I think they downgraded US debt because shut up that’s why.
jl
On other hand, I read a report that if the economic recovery continues at its current very weak pace, the new higher debt limit may be reached before the end of 2012, maybe in the summer, in the middle of the election.
Now, if that is their rationale, it would be interesting, since in that case, one could justify a downgrade based on whether the money will get paid or not, as opposed to hack macroeconomic analysis.
I try to separate out when to be utterly completely versus only partially cynical about US credit ratings agencies. But am not always successful.
patrick II
So, then, is Bork still unavenged?
Keith G
WP reports AA+
Edit
I hope the White House goes all out to fix it in the public’s mind that the GOP owns this. History teaches that they will not.
lamh34
So I’m gonna predict some possible reactions to the news.
“well I guess the shit-sandwich, did nothing…Obama fail”
“America’s credit rating never happened under Bush or Republican presidents…Obama fail”
“Bill Clinton would have faough harder and we never would have had this shit-sandwich ass bill…Obama fail”
“GOP are childish, immature, terroist fucks, who decided to blow up the economy out of spite and pettiness, and stark political opportunism…GOP fail”.
I’ll leave it to other to decide which reaction will come from what circle!
Maude
Now NYT and BBC say the downgrade happened. This so odd. The timing is strange.
We need to downgrade their credibility.
joeyess
Knowing the GOP like we do, I suggest that we get ready for more and better austerity. They’re gonna spin this 24/7/365/he said/she said until it’s conventional wisdom that we need more drastic cuts than ever before. And being the morons that the American public is generally known for, they’ll buy it lock, stock and barrel.
Reality Check
Obama: first President in history to lose the US AAA rating. I can see the campaign ads now.
What a loser. Fucking. Loser.
JPL
John, Guess it depends on the meaning of fizzle
The S&P downgrade story appears to have fizzled out:
Yurpean
Go Team USAA+!
Reality Check
I guess this was the “change” Obama was talking about.
JPL
Here’s a challenge when someone brings the downgrade up, ask what that means and double points ask what it was when the banks tanked.
Litlebritdifrnt
I suppose it is time to start putting up my 200 cans of soup on e-bay, what do you reckon the going rate for a can of healthy request chicken noodle is?
Steve
No rational person can blame this on anyone but the Tea Party Republicans. They called the debt into question. They own this completely.
Villago Delenda Est
@Unreality Check:
If a downgrade did indeed occur, based on faulty math, we have only the sterling examples of borrow and spend like a poet on payday Ronald Reagan and George Bush pere et fils, who created this mess in the first place with totally stupid ideas about taxation and putting entire fuckups “off budget” so the numbers wouldn’t look so bad.
JPL
Re-posted from comment 20\
John, TGIF.. It’s time to put fake economists to bed and let the rest of us drool over pictures of Tunch, Lily and Rosie.
You do notice that I put them in order of importance.
arguingwithsignposts
@Racist Check:
Yep, I’d say you’ve pretty much proven yourself to be one. BTW, where’s that Whitey tape, Racist Check?
4tehlulz
What country are we talking about again?
Villago Delenda Est
@Steve:
Obviously, Unreality Check does not fall into this general category.
Danny
So it begins. The next Great Shitstorm of this news cycle. Let’s hope we’re out in front with a few handy talking points:
1) The Teaparty and republicans in congress manufactured this crisis, and see what it brought us. At the worst possible time. And now they’re gonna try to use it for partisan gain.
2) Obama and Dems offered the republicans a Grand Bargain that would have kept the AAA rating. The republicans walked away from negotiations over taxcuts for billionaires and went on with wrecking the US credit rating.
Comrade Mary
Hey, check out the press release:
I wish I could say that this was my surprised face.
Dennis SGMM
@Steve:
Yes, but whom will the voters and the media blame?
Judas Escargot
The markets are closed for the weekend. So the AA+ has to stand.
When is the SEC up for refunding?
Canadian Shoggoth
/tinfoil hat Did someone with large short positions on US Debt ‘encourage’ S&P to downgrade? /tinfoilhat
Canadian Shoggoth
/tinfoil hat Did someone with large short positions on US Debt ‘encourage’ S&P to downgrade? /tinfoilhat
JPL
@Steve: hahahaha..rational.. earlier today i had the tv on mute because of a phone call and on mute you have closed caption..During the weather segment this is what I read
We deathly need a brain.. Although it was under weather it seems fitting.
Lysana
And is there a fix on Cleek’s pie filter?
Alex S.
Well, it’s true that the political system doesn’t match the quality of the credit rating. So an AA+ is fair to me, but what really irks me is that the rating agencies only act once things get better. They did it with Ireland, they downgraded Greece and Portugal just after another european rescue package got passed and now they’re acting after the debt ceiling crisis. These moves reek of a selfish agenda.
Keith G
@lamh34: What matters is not what people here type. The issue is what will be the context used by the public as they form an opinion about this. If it chooses to, the White House can have quite a bit of influence over how this event is processed. This is where success or failure should be judged.
hhex65
O, did the Teahadis take the country back after all? Hilarious.
beltane
@hhex65: No they didn’t take it back. They threatened to stop paying the mortgage and now the bank is making moves to foreclose.
Litlebritdifrnt
OT, but with regard to the shoe adverts on this site (I know it is not John’s fault and I do not begrudge him the revenue) but what the fuck is happening to women’s shoes right now? They are totally crippling and unwearable. Why don’t we just go back to ancient Japan and foot binding, cause sure as hell there is no way that any person could walk around safely wearing those monsters. What. The. Fuck.
Cain
Reality Check, you are the worst troll. I mean really.. But I agree, commentators are pretty stupid to engage you at all.
I think you blow goats, sick goats with a urinary tract infection.
JPL
Re-posted from comment 20 and 86
John, TGIF.. It’s time to put fake economists to bed and let the rest of us drool over pictures of Tunch, Lily and Rosie.
You do notice that I put them in order of importance.
Amanda in the South Bay
I’m not really sure what to make of this. Didn’t S&P demand like 4 trillion in cuts or something? IOW, pretty much what the Republicans want? That seems a bit suspicious. “enact pretty much what the GOP wants or we downgrade your credit rating.”
4tehlulz
S&P? Moar liek S&GOP amirite?
Ron
MSNBC reporting that downgrade happened despite objection by the WH that there was an error.
Frankensteinbeck
So does anyone think Reality Check is an actual conservative and believes anything it says? Or just a classic ‘Making people mad is the only thing that makes me feel like less of a failure’ troll who says whatever they think will work? Because seriously, you could not get more pathologically ‘blame the victim’ than that one. I mean, wow. That’s some chootspa right there.
Marshal T
I’m so confused… :(
Omnes Omnibus
@Frankensteinbeck: Both, and.
Suffern ACE
S&P apparently would like that part of Dodd-Frank repealed that makes it liable for its ratings. Higher interest rates will create a drag on the economy, but not nearly as much as the default would, nor the the immediate spend-down that was envisioned if the debt ceiling had not been lifted.
SiubhanDuinne
@Litlebritdifrnt:
I can’t remember the last time I wore shoes with any significant heel. What really brought the ridiculosity of the current styles (and the Women Who Wear Them) was at the royal wedding in April if you saw the shoes the Spice married to the soccer player was wearing. Horrible and dangerous. And then less than two months later she had a baby, and I thought “Holy fuck, she was SEVEN MONTHS pregnant” when she teetered around in those awful shoes. Child endangerment, I calls it.
cckids
@Amanda in the South Bay: Well, at Think Progress, they quote the S & P release to say :
So it would appear that the issue is the Tehadist’s inability to see the obvious, as well as their general belligerence.
Ignorant fucks.
Edited to add: That’s quoted from TP, until the end. I guess it is the multi-paragraph blockquote fail for me.
PeakVT
@cckids: Repeat after me: FYWP.
Cap'n Magic
Note that both Fitch and Moody’s are keeping the AAA on US Sovereign debt (for now.) So now it becomes a matter on whose ratings those entities that relies on these pronouncements are going to believe.
Given the rating agencies’ performance on Mortgage Backed Securities, anybody who believes the ratings agencies gets what they deserve.
Dennis SGMM
@cckids:
Serious question; does anyone think that this will in any way affect big business’ financial support of the Republicans?
ExConSean
“Serious question; does anyone think that this will in any way affect big business’ financial support of the Republicans?”
It has to at some point. Market fundies are correct about one thing: businessmen respond to threats to their bottom line. They will cut off their toadies if it gets in the way of their ability to make more money. (I assume that’s why the BSDs in NY state guaranteed reelection support for Rep defectors on gay marriage.)
The only question is when. Market fundies infect the business world, so maybe they won’t figure it out until the GOP is suicide primaried out of relevance next year. I gave up on “peak wingnut” before Cole did, so I’m just watching it unfold.
+2