They did it. They actually fucking did it.
Oh wait, you DON'T know what I'm talking about? Losing our AAA rating by S&P, of course.
We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.Yes! YES! YESSSSS!!!! Good. Lower our credit rating so bond yields go up as investors just don't have any places left to make money. Thank you Satan! Man, it's a great thing that Obama was able to push through a compromise to prevent this from happening.
We have also removed both the short- and long-term ratings from CreditWatch negative.
The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.
More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
Boy, do I bet that the government is really kicking itself for including "cut payoffs to S&P" in their debt ceiling austerity package. For the last week people were marching up and down proclaiming that it wasn't going to be downgraded. Mark their words, Just like how those words were marked on that quota of being out of Iraq in a few months and how Saddam had WMDs.
The republicans told us that massive cuts would make the economy soar and give everyone confidence and the democrats told us a debt deal with massive cuts would make the economy soar and give everyone confidence, so obviously nobody was going to downgrade our credit rating because we're on an economic rocket, right? HA!
Shit like "S&P would never do that, or it would be a great reason for them to lose money" -Every fucking moron pundit ever. Why yes, the USA is in so much deep shit, that even risking its very existence, S&P pulled the bloodgates open on a clusterfuck of bad news. I'm cracking up here because the world is literally fucked here.
You have to admit that it was nice of them to wait until Friday evening to announce this as to prevent an immediate route of the markets. Now all the super capitalists have fair warning to get out while they can come Monday. I mean, tomorrow is really going to be fun to see how far the markets are going to free fall with all this news properly digested.
The reasoning for them down rating U.S. credit is effectively "The austerity measures do not fuck the poor severely enough and we have lost faith in the politicians". Because if you thought we were willing to kill the poor, elderly and sick while we were AAA approved, just you wait till you see us now at AA+
So yeah, we go from AAA to AA+. What exactly does this even mean? Well, it means the dow is going to go down again. It's also going to be a great tool to push folks to buy U.S. treasury bonds. Yes, buy them now! Get a great return thanks to S&P's strategic downgrade! Buy more bonds and force the government to pay even more. Go deeper into debt, raise debt ceilings and get another downgrade and raise the ROR even more. It's like a ponzi scheme except everyone wins!
America is basically California on a much larger scale in terms of how fucked it is financially. But I guess that old saying is true on how California goes, so does the country.
So who does the U.S. join the ranks of now that we're AA+? Well, both Belgium and New Zealand are currently listed as having AA+ credit. Need I remind you that Belgium doesn't even have a government. Their economy is based on selling off leopold's ear collection to the black market, camouflaged in chocolate boxes. And New Zealand's economy is based on Tolkein and fruit named after a bird shaped like a dumpling.
S&P said it may even lower the long term rating to AA within the next two years if spending reductions are lower than agreed to, interest rates rise or "new fiscal pressures" during the period results in higher general government debt. In short they said
"Yeah, that's why we did it, and we'll do it again too!"They also changed its assumption that the 2001 and 2003 tax cuts would expire by the end of 2012 "because the majority of Republicans in congress continue to resist any measure that would raise revenues."
They're probably right too. Just the simple idea that raising taxes on like the top one percent by like, ten or twenty percentage points would create trillions in revenue. But hey, the Bush tax cuts were what, like four percent? Ha!
It makes you wonder if we'll ever get to the point where the economic overlords will say "Hmm, maybe a tiny increase in our ridiculously low inflation rates won't be the end of the world if it means we can keep unemployment below 100%". Ha, yeah, who the fuck am I fooling in even thinking that?
It boils down to basically even Wall Street thinking that not taxing the rich is retarded. So to have finance capital to the left of the Obama administration is an odd feeling. Maybe we should go to China before our neighbors murder us in our sleep in fights over the last rat to eat. At the very least if anyone plans on staying behind and riding this thing out in America, you really should own some kind of gun.
This is it. I'm actually going to see the end of capital. Too bad I'll only outlive it for about 5 seconds before someone kills me for a can of spam.
I really wish people would understand why all of this is so hilarious to me though. I think a big part of it is the need to believe that there's somebody at the wheel when the fact that there isn't is the basis of pretty much all of the funny stuff behind this. Just print out or E-mail these two New York Times articles for strangers, friends and family and if they don't get it, they're not ever going to.
Over all, I may be cheering for this like some redneck finally seeing that ten car pile up during a NASCAR race because it hurts the rich--which it does--but ultimately it's going to hurt the working poor much more so.
You see, Reagan was right. Trickle down does work..
We're entering an era of post-modern credit ratings. I think we'll continue to be aware of America's debt problems and continual poor credit, but only ironically. Oh yeah, I'm pretty sure we'll eventually have to pay for everything via cash. Good thing we can keep on printing that.
You have to remember that no one really knows how much debt there really is out there. Everything floating around are just estimates at best. It's almost exactly the same scenario as 2008. Only instead of banks going under, we're talking about banks and sovereign entities. No one has any idea how many times these loans have been recycle into the CDS market or collateralized in any number of shady practices. The revelation that Goldman Sachs helped restructure and hide Greek debt was pretty telling of the scale we're dealing with here.
Then again, everyone could just decide S&P doesn't matter and the markets will close up on Monday. I'm basing this belief on the notion that this is the most boring outcome to potentially come out of all this and let's face it. Boring typically happens.