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(Marketwatch)   US Credit rating downgraded to Redneck Lottery Winner   (marketwatch.com) divider line 43
    More: Asinine, Redneck Lottery Winner, Egan-Jones, U.S., Bankruptcy of Lehman Brothers  
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13983 clicks; posted to Business » on 14 Sep 2012 at 8:16 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



Voting Results (Smartest)
View Voting Results: Smartest and Funniest


Archived thread
2012-09-14 08:50:57 PM
3 votes:
Of course they want the credit free and the money cheap. The money is just debt and when you can get it into the hands of the working class, they buy either cheap crap with it - profit - or homes they can't afford which you can then take away from them, all without using your own money. Land is valuable. Buy lots of it on margin using IOUs. Please, think of the brokers. I gotta admit, I never thought that they would try and put the housing dog back on the derivatives pony for round two, this soon.
2012-09-14 08:23:40 PM
3 votes:
Not one of the Big Three, but still a Nationally Recognized Statistical Rating Organization. So I guess this is a big deal.

Except for, uh... *cough*
2012-09-14 08:22:56 PM
3 votes:
I put all my dollars into Lutefisk futures.
2012-09-15 02:01:23 AM
2 votes:

Animatronik:

They [mortgages] were bundled into mortgage-backed securities and SOLD TO FREDDIE AND FANNIE, who were GUARANTEED BY THE GOVERNMENT. That's why taxpayers are still on the hook for trillions right now.


Wrong.

"In addition to buying loans directly, Fannie and Freddie also purchased mortgage-backed securities produced by Wall Street. From 2002 to 2007, Wall Street produced more than $3 trillion in securities backed by subprime mortgages and so-called Alt-A mortgages, another class of risky home loans. During that time, Fannie and Freddie purchased 23 percent of Wall Street securities underpinned by subprime and Alt-A loans, according to Inside Mortgage Finance."

(Research by the Center for Public Integrity)

And Barney Frank, while he was franking a Fannie executive, protected this situation because it encouraged lenders to lend to people in poor neghborhoods to whom no lwender in his right mind would lend money. In other words, Barney and other Congressional Democrats contributed a piece ofthe puzzle the fueled an inflated housing market, because government guarantees eliminated risk.

Fannie and Freddie's market share plunged through 2006 (when the housing market turned) as Wall Street's bubble machine went into high gear. It was a bit player in the riskiest loans. Just 5 percent of its loans were subprime. Wall Street's percentage was 500 percent higher.

Read any reputable economist on this, or a well researched book. Economists broadly agree that Fannie and Freddie contributed to the housing bubble, and the housing bubble was a neccesary pre-condition to the crash that occurred. But the main drivers of both were Wall Street.

And sub-prime mortgages were more of a trigger than a cause, as the housing bubble was based on wildly inflated values and an expectation it would go up forever. Most of the loans for those properties were not sub-prime.
2012-09-14 10:16:13 PM
2 votes:
mjg
2012-09-14 10:04:25 PM
2 votes:
Canada's dollar is going up to $1.05 on the US dollar. And Canada is maintaining it's AAA credit rating.
2012-09-14 09:21:41 PM
2 votes:

sew_buttons: What does this mean exactly?

Will China will tighten up the purse strings or something?


It means the government is going to print more money out of thin air, and lend it to wall street bankers and traders at 0% interest, also known as "Free Money". The banksters will then take all this free money, use it to make more money, then give back the original principle while keeping all of the profits. Unless of course the investments fail for some reason, then they wont pay it back and the public eats the loss.

Oh, and all of the bankers profits come at the expense of inflation for you normal people.

TLDR: rich people are stealing all of your money through a complicated banking scam... and we're going to let them do it, because once they go from being rich to super mega ultra rich, they can hire more peasants. Or something.
2012-09-14 09:20:33 PM
2 votes:
I wouldn't consider a country whose legislative bodies were full of traitors who are willing to sabotage the nations solvency in order to "get" a President they don't like credit-worthy, either.
2012-09-14 08:28:09 PM
2 votes:

Summercat: ....who? Never heard of this company.


Looks like they're fairly new and are in trouble with the SEC.
2012-09-14 08:25:08 PM
2 votes:
....who? Never heard of this company.
2012-09-14 08:24:09 PM
2 votes:
All my assets are tied up in staying alive.
2012-09-16 11:29:26 PM
1 votes:

whidbey: Linkster: Paper will always be paper. Money, digital money is gone when the lights go out. Material is wealth. Having something to sell that is needed, is wealth. Water, gold, silver, food. fuel, etc.

So labor and production don't count for anything anymore unless you have some stupid precious metal to back it up?


I think he was making the point that if our society goes completely belly up, having a Schwab account that says you have 5 million dollars of stock and bonds is going to be worthless. Real, physical assets like what he listed above, and including things like factories, farms, and useful skills will still be worth something.
2012-09-16 07:06:24 PM
1 votes:
The problem with being a resource based economy like Canada is that when all your customers go broke, you end up with a pile of resources that no one can buy or they can only buy them at a steep steep discount.

When the USA, China and europe begin to seriously fail in a dramatic and public fashion,we Canadians will be going broke right along with you.
2012-09-15 02:11:16 PM
1 votes:

People_are_Idiots: Mugato: Thanks, republicans.

Uhm, forget the Dems had control of the House and Senate from 2007 to 2010 (Senate still in Dem control), and the White House since 2009? Also might note that Obama has done more to the national debt in his one term than Bush did in two?

/really beginning to miss Bill.


Hmmm...who blocked the raising of the debt ceiling that directly was the cause of the credit downgrade? That was the cause. Not the high debt. We have always had high debt. It's when some Republican assholes (a redundant term) decided that raising the debt ceiling was bad (unlike the other times they thought it was good...I wonder what changed--hint, see your answer) that this came down on us.

You sound stupid spewing Fox News talking points.
2012-09-15 03:35:50 AM
1 votes:
i141.photobucket.com
2012-09-15 02:38:13 AM
1 votes:
Every time people start bringing up the oil discussions, I start thinking I should invest in horses... When we can't drive our cars anymore, they'll be worth a fortune :P
2012-09-15 12:29:54 AM
1 votes:

MisterRonbo: All the CRA did was say that if you denied a loan, you needed a reason. You couldn't redline entire neighborhoods.

That many "banks" handed out no-doc liar's loans was not the government's doing. Banks chose to have poor underwriting standards. More regulation of that is a good idea, but the government didn't force them to do anything. It just didn't stop them.

Further, most of those loans didn't come from banks, as in something regulated as a bank. Most were from places like Countrywide - which took no deposits and therefore wasn't considered a bank. They just wrote anyone with a pulse a mortgage, bundled it in to a CDO, and sold it off.


They were bundled into mortgage-backed securities and SOLD TO FREDDIE AND FANNIE, who were GUARANTEED BY THE GOVERNMENT. That's why taxpayers are still on the hook for trillions right now.

And Barney Frank, while he was franking a Fannie executive, protected this situation because it encouraged lenders to lend to people in poor neghborhoods to whom no lwender in his right mind would lend money. In other words, Barney and other Congressional Democrats contributed a piece ofthe puzzle the fueled an inflated housing market, because government guarantees eliminated risk.
2012-09-14 11:58:32 PM
1 votes:

Ayn Rand's Social Worker: Related?


Since the yuan is pegged to the dollar anyway, doesn't that make oil in China still on the dollar, just now with an extra conversion step?
2012-09-14 11:51:32 PM
1 votes:

fusillade762: Has anyone pointed out that Obama doesn't control the Fed? It's not a government agency.


Let's not confuse anyone with the facts...

rense.com
2012-09-14 11:43:04 PM
1 votes:

smitty04:

Too many people were getting houses they could not afford.


That was part of it. The other was that Wall Street found a way to get that risk off the lenders' books almost immediately, and to fraudulently sell the loans as investment grade. That took collusion from ratings agencies, and an incredible lack of oversight by federal regulators.

Not only did the executive branch look the other way while CDOs were cooked up, they failed to regulate the derivatives market. So for every dollar in mortgage debt, there was anywhere from $5-$10 in derivative - we'll never know how much, because derivative don't have a central clearinghouse of any time.

Put another way, someone puts 2% down on a home loan. That loan gets bet in in the derivatives market, and you can place a bet without owning the underlying security. Say it gets leveraged by a factor of 5. Now you have money sloshing around the stock market that is on margin with effectively 0.4% actual cash backing.

Doesn't take much to start a sell-off that turns in to a death spiral.

The government was pressuring mortgage companies to loan money to unqualified people.

Nope, complete myth. First, do you notice a similar housing crash in other countries - Ireland, Spain, etc?

You are probably thinking of the Community Reinvestment Act. Its used as a sort of dog whistle, to suggest that black people or poor people were getting mortgages, with banks forced by the government to lend the money.

Which is ridiculous. Subprime mortgages in their entirely were not enough to create this economic bomb. And it wasn't poor people flipping all of those houses and condos in the 'burbs.

All the CRA did was say that if you denied a loan, you needed a reason. You couldn't redline entire neighborhoods.

That many "banks" handed out no-doc liar's loans was not the government's doing. Banks chose to have poor underwriting standards. More regulation of that is a good idea, but the government didn't force them to do anything. It just didn't stop them.

Further, most of those loans didn't come from banks, as in something regulated as a bank. Most were from places like Countrywide - which took no deposits and therefore wasn't considered a bank. They just wrote anyone with a pulse a mortgage, bundled it in to a CDO, and sold it off.
2012-09-14 11:32:19 PM
1 votes:
Courtesy of williambanzai7 over at Zero Hedge

farm6.staticflickr.com
2012-09-14 11:20:50 PM
1 votes:

super_grass: Fed Audit Confirms Govt. Corruption In Solyndra Deal

Also America already spends a huge amount of money to help push American solar energy and manufacturing products overseas. It's a little thing called Corn Subsidies, have you heard of it?



There are many things I'd never learn if I didn't come to Fark.
mjg
2012-09-14 10:51:58 PM
1 votes:

madgonad: mjg: Canada's dollar is going up to $1.05 on the US dollar. And Canada is maintaining it's AAA credit rating.

Canada has AAA credit rating because their debt is only $600B and their tax rates and mineral wealth essentially guarantee repayment. The exchange rate is reflective of exports (again, mostly minerals).


True. But looking at Canada's mineral resources (and fresh water) the country is set to be the Saudi Arabia of this century.
2012-09-14 09:45:44 PM
1 votes:
Not to worry, the GOP won't object to a little more debt...

2.bp.blogspot.com
2012-09-14 09:37:14 PM
1 votes:

bunner: RedVentrue: We're so Farked.

Thanks Obama!

*looks at last 30 years of utter unbridled avarice and gutting of the economy*

"Yeah, it's the.... "

*spins wheel*

"Black guy!"


Oh I agree, but this screwing is an open ended train with no sighns of stopping untill we reach Harare!

Bend over and don't forget to breathe, 'cause this might take a long, long time.
2012-09-14 09:32:58 PM
1 votes:

RedVentrue: We're so Farked.

Thanks Obama!


*looks at last 30 years of utter unbridled avarice and gutting of the economy*

"Yeah, it's the.... "

*spins wheel*

"Black guy!"
2012-09-14 09:24:41 PM
1 votes:
the Fed's plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar

I'm no economist, but I thought low interest rates only create inflation if people spend more because they can borrow more easily?



bunner: And when it's time to collect, you better learn Chinese.


sew_buttons: Will China will tighten up the purse strings or something?


China only holds about 8% of US debt.
2012-09-14 09:22:52 PM
1 votes:
Or there's this: the United States is sitting like a big, fat economical bull elephant on the world economy and forcing interest rates lower to keep interest payments on its sovereign debt, at the very least, stable (roughly half a trillion dollars per annum).

When interest rates approach or hit zero, the US refinances its debt obligations in the form of 30 year Treasury bonds, then stands up and lets the inflationary cork out of the bottle.

Step 3: Profit. While other governments and spheres of influence spiral out of economic control in a repeat of 1980-81 interest rates, the US makes out like a bandit,
2012-09-14 09:18:46 PM
1 votes:

Linkster: Paper will always be paper. Money, digital money is gone when the lights go out. Material is wealth. Having something to sell that is needed, is wealth. Water, gold, silver, food. fuel, etc.


Guns.
2012-09-14 09:18:37 PM
1 votes:

Linkster: Paper will always be paper. Money, digital money is gone when the lights go out. Material is wealth. Having something to sell that is needed, is wealth. Water, gold, silver, food. fuel, etc.


So labor and production don't count for anything anymore unless you have some stupid precious metal to back it up?
2012-09-14 09:11:04 PM
1 votes:
sitesmithscott
I wonder if it works like personal ratings. People with low ratings end up only qualifying for high interest loans due to the risk. Does that mean that future borrowed money by the government will have a higher interest rate that us taxpayers have to pay for? Curious.

More or less. However, we're still the safest investment around, so we won't start paying more until the global economy stabilizes.
2012-09-14 09:06:10 PM
1 votes:

Indubitably: I love how this solution continues to pad bankers' pockets.

See?

P.S. Fed: buy student loans and forgive them as part of QE3, or make it QE4, or...

P.P.S. QE5.


The system for a long time, take shiat and make it gold. Housing goes up, make it look good, turn it to shiat, let it fail. sell it to Bob that thinks it's ok, watch it fail and take bobs investment.

Banking 101,
2012-09-14 09:01:02 PM
1 votes:

Mugato: Thanks, republicans.


See this is why people like you always have bad credit. A failure to accept responsibility and take the cure..
2012-09-14 08:57:55 PM
1 votes:
I love how this solution continues to pad bankers' pockets.

See?

P.S. Fed: buy student loans and forgive them as part of QE3, or make it QE4, or...

P.P.S. QE5.
2012-09-14 08:56:16 PM
1 votes:

sitesmithscott: Does that mean that future borrowed money by the government will have a higher interest rate that us taxpayers have to pay for?


After S&P downgraded the US, the interest rate on the national debt dropped. So like most things at this scale, no, it doesn't work the same as for an individual person.
2012-09-14 08:55:23 PM
1 votes:

Linkster: Good investment?

Pork Bellies! It's the ONLY Way!!


cdn2.screenjunkies.com
Frozen Concentrated Orange Juice!
2012-09-14 08:50:12 PM
1 votes:

sitesmithscott: I wonder if it works like personal ratings. People with low ratings end up only qualifying for high interest loans due to the risk. Does that mean that future borrowed money by the government will have a higher interest rate that us taxpayers have to pay for? Curious.


Of course it does. You should start having more sex and you wouldn't have to ask questions like this.
2012-09-14 08:43:01 PM
1 votes:
Good investment?

Pork Bellies! It's the ONLY Way!!
2012-09-14 08:42:03 PM
1 votes:

oldernell: OK. So where else would you put your money. Recommendations, please.


I suggest investing heavily in lead.
2012-09-14 08:36:02 PM
1 votes:

sitesmithscott: I wonder if it works like personal ratings. People with low ratings end up only qualifying for high interest loans due to the risk. Does that mean that future borrowed money by the government will have a higher interest rate that us taxpayers have to pay for? Curious.


Yes
2012-09-14 08:35:25 PM
1 votes:
www.pequepuzzle.com
2012-09-14 08:25:15 PM
1 votes:
I wonder if it works like personal ratings. People with low ratings end up only qualifying for high interest loans due to the risk. Does that mean that future borrowed money by the government will have a higher interest rate that us taxpayers have to pay for? Curious.
2012-09-14 08:22:08 PM
1 votes:
Yuan
 
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