DEBT CEILING: Moody's Just Threatened To Slash The US Credit Rating

[Ares]

Finally, a logical warning on US credit.

Moody's is out with a comment saying that if there's no imminent progress on the debt ceiling fight, the US credit rating will be cut.

This makes total sense, and we applaud Moody's for doing their job: Identifying an imminent (real) issue, and sensibly advising (ahead of time) about what could be a threat to US debt holders.

This should help put an end to this idea that a technical default would be just fine, and that somehow all this brinksmanship would be good for US credit somehow.

Back in January, we called on Moody's to do exactly this: Threaten a ratings cut as a way of warning about the harmful effects of this fight.

They've done exactly that.

http://www.businessinsider.com/moodys-warns-on-us-debt-rating-2011-6#ixzz1O9RfeV99


Seems "Businessinsider.com" just wants to have congress rubber stamp the debt ceiling. Because yeah when you have 14.6 trillion you could never possibly pay back. It's virtually the same as 100 Trillion that you could never pay back. :oo-->

[Serpo]

This will change the mood of things...... ;D

[dys]

The richest company in the whole world save possibly Israel and the Federal Reserve.

dys

[SHTF2010]

wasn't there just some kind of vote on the debt ceiling the other day

would that have anything to do with this ?

[jimswift]

I just posted this on my front counter.

It sounds about right, I mean if the president can do everything that he's been doing in the name of national security, why would a default be any different?


HAIL CAESAR

Although the financial press speculates about a downgrade of the US government's credit rating and default if political impasse prevents the debt ceiling from being raised in time, I doubt anyone really believes that the debt ceiling will not be raised.
It is just all a part of the political theater of the next couple of months.

Republicans will blame the budget deficit and accumulated national debt on Medicare and Social Security. Wall Street sees billions of profits in privatizing either, and debt rating agencies will oblige their Wall Street paymasters by opining from time to time that US Treasury bonds might be downgraded unless "entitlements can be addressed and the deficit brought under control."

Democrats will say that the budget deficit cannot be addressed without an increase in tax revenues, especially from the rich whose incomes have exploded upward while their tax rates have declined.

All the while the pressure of an approaching deadline for default will be used to reshape the US social contract, most likely in the further interest of the rich.

However, regardless of whether the debt ceiling is raised, the US government is not going to go out of business. Why does anyone think that the President, who does not obey the War Powers Act, the Foreign Intelligence Surveillance Act, US and international laws against torture, or any of the laws and procedures that guard civil liberty, is going to feel compelled to obey the debt ceiling?

As long as the US is at war, the American President is a Caesar. He is above the law. The US Justice (sic) Department has ruled this, and Congress and the Courts have accepted it.

Moreover, the Federal Reserve is independent of the government. In its approach to regulatory matters and bailouts, the Fed has ceased to follow its own rules. Regardless of the debt ceiling, the Fed will continue to purchase the Treasury's bond issues, and the Treasury will continue to fund the federal deficit with the proceeds. If Goldman Sachs is too big to fail, certainly the US government is.

As Congress has abandoned its powers over war, how can Congress hold on to its powers over spending? It cannot. Indeed, an impasse between the political parties over the debt ceiling would be welcomed by the executive branch as more proof that Congress is incapable of doing its part in governing and, therefore, the task has of necessity passed to the executive branch, which already does most of it.

If the President can declare on his own authority, without statutory basis and in defiance of the US Constitution, that he can assassinate US citizens who he considers to be a threat to national security, he certainly can declare that default is a threat to national security and that it is within his powers as commander-in-chief to ignore the debt ceiling.

Indeed, the executive branch would jump at the chance. Then it could reshape the budget to its own pleasing without having to consult Congress on spending any more than the executive branch consults Congress on war.

The Bush/Cheney regime brought democracy and accountable government to an end. If Obama doesn't finish the process, the next in line will.


by Paul Craig Roberts
http://lewrockwell.com/roberts/roberts311.html

[Horn]

http://www.qatarisbooming.com/wp-content/uploads/2011/06/Moodys-Investors-Service-logo-qatarisbooming.com_.jpg

Its good to be the King of England.

[mick silver]

someone that works at Moody is about to get lock up for rape

[Book]

http://www.moodys.com/Pages/atc.aspx

:D

[mick silver]

that pretty good money for company to tell country how good there credit is ....................................Moody's is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. Moody's Corporation (NYSE: MCO) is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which offers leading-edge software, advisory services and research for credit analysis, economic research and financial risk management. The Corporation, which reported revenue of $2 billion in 2010, employs approximately 4,500 people worldwide and maintains a presence in 26 countries. Further information is available at www.moodys.com.

[Still Barbaro]

This, I believe, below. Also, I believe Congress has voted to raise the debt ceiling over 70 times, but never voted to lower it. Go figure.



Although the financial press speculates about a downgrade of the US government's credit rating and default if political impasse prevents the debt ceiling from being raised in time, I doubt anyone really believes that the debt ceiling will not be raised.
It is just all a part of the political theater of the next couple of months.

And this Moody's "threat:" Is this a real threat of potential action or just a warning shot over the bow.

I remember some similar comments by Moody's in the past.

[osoab]

Moody's Leaked Again: Told Nancy Pelosi Will "Probably Not" Downgrade US Weeks Ago; Did Her Multi-Millionaire Investor Husband Know Too? (http://www.zerohedge.com/article/moodys-leaked-again-told-nancy-pelosi-will-probably-not-downgrade-us-weeks-ago-did-her-multi)


Moody's reputation for leaking inside information is well-known: after all it was one of its own employees, Deep "Throat" Shah, who leaked to infamous hedge fund Galleon information of upcoming LBOs. But at least that wasn't information originating from Moody's: the world's most incompetent rating agency was merely a conduit. Yet we were little surprised to learn that the firm that facilitated the housing bubble, and where such apparatchiks as Mark Zandi reside, informed none other than House Minority leader Nancy Pelosi that it likely wouldn't downgrade the US debt as long as several weeks ago. Per Dow Jones: "Moody's earlier Thursday took the unusual step of warning that it might place the U.S. government's debt rating under review for a possible downgrade. The agency said the review would come if Congress doesn't make progress on raising the country's debt ceiling. Pelosi said she was alerted to the Moody's report just after House Democrats met with President Barack Obama at the White House. She said a few weeks ago she was in New York and the head of Moody's told her that it "would probably not downgrade, so this is interesting news today," she said. "But the fact is we cannot default" on the debt." We are relieved to learn that the head of Moody's, a firm which only last summer received a Wells Notice from the SEC, in an investigation which was promptly scuttled by powerful and rich people, takes its responsibility of protecting material, non-public information with such passion. Yet it is the topic of another leak of non-public information, and not Moody's criminal incompetence, that bothers us. Because as we noted last week, it is now proven scientifically that members of both Congress and Senate (especially democrats), tend to trade a littel too much on inside information. And even if not Ms. Pelosi, who precisely will guarantee us that Ms Pelosi's husband, multi-millionaire Paul Pelosi who just happens to be the owner of Financial Leasing Services, Inc., a San Francisco, California-based real estate and venture capital investment and consulting firm, did not procure the Moody's inside information courtesy of wagging tongues at Moody's and in his wife's mouth, and then proceed to trade accordingly. Alas, with the regulator in charge being the same one who let the whole Moody's investigation get deadended in record time, we are not hopeful of getting any information or justice. Ever.

[Horn]

Greeks pour cash into London real estate

London (CNN) – It has the makings of an economic tragedy of epic proportions.

As Brussels battles to prevent Greece from becoming the Eurozone’s first member to default, the country’s crisis is talk of the town among Greek communities thousands of miles from Athens.

One year after Greece received a $158 billion bail out from the International Monetary Fund, the outlook remains dire.

Money is still pouring out of the country while authorities fret about a brain drain – factors that are having a surprising impact on London’s estimated 400,000-strong Greek population.

Financially, Greece is standing on shaky ground: the European Commission expects its debt to balloon to over 157% of gross domestic product this year while its economy is set to contract 3.5%.

This week Moody’s cut its credit rating on Greek debt and raised the chances of a default to 50-50 while the true extent of Greece’s cash deficit may become clear as soon as today as IMF and European officials complete their audit of its public accounts.

http://business.blogs.cnn.com/2011/06/03/as-crisis-mounts-greek-cash-pours-into-london-real-estate/