Damn Tea Party!

Quote:Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.

Without some structural changes soon, restoring credit quality will become increasingly difficult. Yields on 10-year treasury notes have fallen to their lowest since early Feb 2010 with US Federal Reserve's aggressive purchases of US Treasuries. A concern is the rise in interest rates placing higher pressure on the US's credit quality. Excess growth of money supply (i.e., debt monetization) harms creditors and ultimately, the economy. Weak debt reduction efforts force a neg. watch.

http://www.zerohedge.com/news/egan-jones...k-negative

That's ok, we'll just lend out money at a better interest rate than we borrow it.

I have complete confidence in Obama's experience and ability to lead us out of this mess. Give him four more years and get Pelosi back into the Speaker position and things will turn around.

I wonder if S&P and Moody's follows

(04-05-2012 05:56 PM)ClairtonPanther Wrote:  I wonder if S&P and Moody's follows

They've already threatened. EJ was the first to pull the trigger last time, too.

(04-05-2012 06:05 PM)BlazerFan11 Wrote:  

(04-05-2012 05:56 PM)ClairtonPanther Wrote:  I wonder if S&P and Moody's follows

They've already threatened. EJ was the first to pull the trigger last time, too.

I honestly can't say that I've heard of EJ. How much earlier did EJ pull the trigger the last time compared to the other ratings agencies?

(04-05-2012 06:15 PM)ClairtonPanther Wrote:  

(04-05-2012 06:05 PM)BlazerFan11 Wrote:  

(04-05-2012 05:56 PM)ClairtonPanther Wrote:  I wonder if S&P and Moody's follows

They've already threatened. EJ was the first to pull the trigger last time, too.

I honestly can't say that I've heard of EJ. How much earlier did EJ pull the trigger the last time compared to the other ratings agencies?

They are an SEC-approved NRSRO agency, just like Moody's and S&P. They downgraded a few weeks earlier than S&P before.

Of course you haven't heard of them LOL Egan Jones just got its license in 2007 and is literally two guys named Egan and Jones; LOL @ conservatives pretending they hold anything near the influence of the Big Three (Moody's, S&P and Fitch) which control 95% of the market. You can't draw a line in the sand and say debt that reaches 100% GDP is unsustainable; it's completely dependent on the GDP gtowth and interest rates on that debt. Morons.

Sorry a reputable credit agency still hasn't downgraded the US credit rating to AA, conservatives.

(04-05-2012 04:45 PM)DrTorch Wrote:  That's ok, we'll just lend out money at a better interest rate than we borrow it.

He still doesn't understand LOL

(04-05-2012 07:48 PM)Max Power Wrote:  Of course you haven't heard of them LOL Egan Jones just got its license in 2007 and is literally two guys named Egan and Jones; LOL @ conservatives pretending they hold anything near the influence of the Big Three (Moody's, S&P and Fitch) which control 95% of the market. You can't draw a line in the sand and say debt that reaches 100% GDP is unsustainable; it's completely dependent on the GDP gtowth and interest rates on that debt. Morons.

Of course the left also attacked S&P for their downgrade and accuse the Big Three of being in bed with Wall Street. EJ also warned about the subprime mortgage crisis in 2008, while the Big Three did not.

http://money.cnn.com/galleries/2008/fort...index.html

I know it's a knee jerk reaction to attack and try to discredit anyone who criticizes government, but maybe try to educate yourself next time.

(04-05-2012 08:20 PM)BlazerFan11 Wrote:  

(04-05-2012 07:48 PM)Max Power Wrote:  Of course you haven't heard of them LOL Egan Jones just got its license in 2007 and is literally two guys named Egan and Jones; LOL @ conservatives pretending they hold anything near the influence of the Big Three (Moody's, S&P and Fitch) which control 95% of the market. You can't draw a line in the sand and say debt that reaches 100% GDP is unsustainable; it's completely dependent on the GDP gtowth and interest rates on that debt. Morons.

Of course the left also attacked S&P for their downgrade and accuse the Big Three of being in bed with Wall Street. EJ also warned about the subprime mortgage crisis in 2008, while the Big Three did not.

http://money.cnn.com/galleries/2008/fort...index.html

I know it's a knee jerk reaction to attack and try to discredit anyone who criticizes government, but maybe try to educate yourself next time.

I think it is funny/sad that these guys are using "threats" to force the US to destroy it's economy by forcing us to make drastic cuts just like happened in Greece.

(04-05-2012 11:47 PM)RobertN Wrote:  

(04-05-2012 08:20 PM)BlazerFan11 Wrote:  

(04-05-2012 07:48 PM)Max Power Wrote:  Of course you haven't heard of them LOL Egan Jones just got its license in 2007 and is literally two guys named Egan and Jones; LOL @ conservatives pretending they hold anything near the influence of the Big Three (Moody's, S&P and Fitch) which control 95% of the market. You can't draw a line in the sand and say debt that reaches 100% GDP is unsustainable; it's completely dependent on the GDP gtowth and interest rates on that debt. Morons.

Of course the left also attacked S&P for their downgrade and accuse the Big Three of being in bed with Wall Street. EJ also warned about the subprime mortgage crisis in 2008, while the Big Three did not.

http://money.cnn.com/galleries/2008/fort...index.html

I know it's a knee jerk reaction to attack and try to discredit anyone who criticizes government, but maybe try to educate yourself next time.

I think it is funny/sad that these guys are using "threats" to force the US to destroy it's economy by forcing us to make drastic cuts just like happened in Greece.

Robert I think it was sufficiently proven you don't know what the hell you're talking about the last time you brought Greece up.

Learn from your mistakes.

If Robert learned from his mistakes he would know what he was talking about.

(04-06-2012 07:33 AM)Owl 69/70/75 Wrote:  If Robert learned from his mistakes he would know what he was talking about.

Fair point.

(04-05-2012 08:20 PM)BlazerFan11 Wrote:  

(04-05-2012 07:48 PM)Max Power Wrote:  Of course you haven't heard of them LOL Egan Jones just got its license in 2007 and is literally two guys named Egan and Jones; LOL @ conservatives pretending they hold anything near the influence of the Big Three (Moody's, S&P and Fitch) which control 95% of the market. You can't draw a line in the sand and say debt that reaches 100% GDP is unsustainable; it's completely dependent on the GDP gtowth and interest rates on that debt. Morons.

Of course the left also attacked S&P for their downgrade and accuse the Big Three of being in bed with Wall Street. EJ also warned about the subprime mortgage crisis in 2008, while the Big Three did not.

http://money.cnn.com/galleries/2008/fort...index.html

I know it's a knee jerk reaction to attack and try to discredit anyone who criticizes government, but maybe try to educate yourself next time.

They warned about the subprime crisis in 2008? You mean while/after it was unfolding? Oh, what a prognosticator! Hey you realize it's a lot easier to make such prognostications when nobody knows or cares who you are?

There's a whole sector of financial "experts" who forecast doom and gloom (Schiff, North, your heros at Zerohedge), and a broken clock is right twice a day.

Another shining hope and change appearance for the downgrade president.

Unlike his big rivals, Egan doesn't disclose much about how he rates borrowers. In fact, Egan reveals little about his operations. He declined to be interviewed in his offices, saying they're not set up to receive visitors, instead meeting twice with BusinessWeek reporters at Philadelphia's main train station. Egan won't say who his analysts are, where they work, or exactly how many companies they rate. If he provided the information, he says, Moody's and S&P might hire his analysts away, which could disrupt his firm.

OH, WHAT A CREDIT AGENCY!

In that case, his tallies would not include a miss for the 21 months in which Egan rated Pfizer Inc. (PFE ) AA, then lowered it to AA-, only to raise it again to AA, all while S&P held steady at AAA. Such omissions could happen a lot: Egan-Jones changes its ratings twice as often as Moody's, according to a study by professors at the University of Michigan and Stanford University. Egan admits "there are some flaws in measurement" but says his clients are sophisticated enough to know what they are.

OH WHAT STABILITY!

(04-06-2012 08:43 AM)Max Power Wrote:  Unlike his big rivals, Egan doesn't disclose much about how he rates borrowers. In fact, Egan reveals little about his operations. He declined to be interviewed in his offices, saying they're not set up to receive visitors, instead meeting twice with BusinessWeek reporters at Philadelphia's main train station. Egan won't say who his analysts are, where they work, or exactly how many companies they rate. If he provided the information, he says, Moody's and S&P might hire his analysts away, which could disrupt his firm.

OH, WHAT A CREDIT AGENCY!

(04-06-2012 08:46 AM)Max Power Wrote:  In that case, his tallies would not include a miss for the 21 months in which Egan rated Pfizer Inc. (PFE ) AA, then lowered it to AA-, only to raise it again to AA, all while S&P held steady at AAA. Such omissions could happen a lot: Egan-Jones changes its ratings twice as often as Moody's, according to a study by professors at the University of Michigan and Stanford University. Egan admits "there are some flaws in measurement" but says his clients are sophisticated enough to know what they are.

OH WHAT STABILITY!

Nice links there. EJ is structured and cloaked in secrecy to avoid being hijacked like the Big Three have been. They answer to the investors who look to them for guidance. Isn't that how CRAs are supposed to work?

From right wing rag TPM:

Quote:The ratings agencies are now being forced by events to at last downgrade some of these securities — hence today’s news about S&P’s belated move to downgrade Ambac, which sent the company’s stock plummeting.

Indeed, this same dynamic preceded the collapse of insurance giant AIG in September. Until the 15th of that month, S&P had rated its unsecured debt at AA minus, far above what it merited given the value of the underlying mortgages — leading investors to see AIG as a secure bet. When, on that day, S&P suddenly and severely cut their rating to bring it into line with reality, the company was required to post $14 billion to comply with the terms of the credit default swap agreements they had entered into. That was $14 billion AIG didn’t have, and all of a sudden, U.S. taxpayers were on the hook.

It doesn’t have to be this way. Sean Egan is a founder of Egan-Jones, an independent ratings agency that’s paid not by insurers, but by investors. In testimony before Waxman’s committee, and again in an interview with TPMmuckraker, Egan emphasized that — despite the apparent personal corruption of individual analysts and senior management at the agencies — the only way to fix the problem is for the federal government to take steps to re-align the system of incentives that prevails on the agencies. If they’re rewarded for giving investors an accurate picture of the value of securities, they’ll be likely to do so. If not, they’ll keep pumping up their ratings to please the banks. And soon enough, a new house of cards will rise and fall.

http://tpmmuckraker.talkingpointsmemo.co...y_cows.php

Let's see...a company that is not in bed with Wall Street and is actually advocating for gov't regulation of the industry...and you're BASHING them. LOL. I guess it isn't really surprising though...you've shown your lack of ideological purity many times already.