Going Short?

Since the USA just got a credit downgrade from S&P from AAA to AA+... I was wondering who will be short the market on Monday?

Jobs were "better than expected" today but still way short of where it should be..... the market dove +500 points on Thursday after the "debt deal" that was supposed to prevent all this trouble.

S&P said the deal didn't cut enough spending to be effective, so S&P downgraded us. The WH said they made a $2T mistake.....S&P said...too bad..... you're downgraded anyway. we're close to 100% debt to GDP ratio..... which astounds me that we still have a double A rating with that level of debt. $14T going to $16T with this deal..... so where were the cuts if we're going up $2T?  Don't answer that, I know the reason. (Base line accounting)

So.... will the markets dive on Monday?

Anybody go short today?

PWF, Bubba.

I just heard on the radio that B.O. was bragging about how 170,000 jobs were created last month, but failed to mention the 500,000 + that were lost. They also mentioned that Japan has a 220% debt ratio giving them a AA- rating ... yet they can borrow money cheaper than we can.

Another thing they mentioned that I didn't quite understand because I only caught part of it. They said for private pension's to be secured they have to be backed by at least 2 AAA rated firms. The concern now is if Moody's lowers their rating, people are going to lose their pension. Is this right? Did I misunderstand what they said? Again, I only caught the tail end of what they were saying.

Mind you ... this was liberal talk radio, not Mike, Glenn, Rush, Shawn, or Michael. When the left starts trash talking B.O., you know it's bad.

UbiquitousBubba


In the ensuing hush, the gurgling of the percolator, the clink of a spoon against a mug, and a nervous giggle wafted over the Coffee House crowd.  "Awkward", whispered a voice from the corner, echoing the group's sentiment that the questions in the Coffee House had grown just a little personal...

That dog don't hunt.

Jonbouy


This thread needs translating into English.

The Kings English?

Bub

Another thing they mentioned that I didn't quite understand because I only caught part of it. They said for private pension's to be secured they have to be backed by at least 2 AAA rated firms. The concern now is if Moody's lowers their rating, people are going to lose their pension. Is this right? Did I misunderstand what they said? Again, I only caught the tail end of what they were saying.

I believe it's that many pension funds are only allowed to hold AAA stuff. So if there is a downgrade, thousands of pension funds would be forced to sell off all the downgraded holdings en masse, which would cause big problems.



And the fact that so many people insist on blaming "the other party" for every problem is one of the reasons for downgrades and why further ones are almost inevitable. So, in a way, all those people are actually getting what they want.

Hope they're happy.

I'm still paying for the Viet Nam conflict... don't look at me.

;-)

Guitarhacker

Talk of taxing the rich so they would "pay their fair share" is totally misguided and a downright lie. If you took 100% of every dollar the 8200 people who make more than $10M a year in income, you would gross $240B..... not even a drop in the $16T debt...or the non-existent budget for operating expenses of this country.  

Of course this line of reasoning could easily be used to argue that the super rich should pay no taxes whatsoever...

I like the idea of getting 10% from all the people that don't make any money better.











I just don't think it's gonna work real well.





People keep their money where it's safe... if they don't keep it here in USA they really only have a few other safe options.

+1 Randy.

We're not allowed to discuss Politics I know but would it be allowed for  me to say that I think America is going down the tubes?

The reason: debt ( not that what is already borrowed will ever be paid back but that other countries may soon be reluctant to lend to the once invincible US of A). I love the American Ideals but it seems that America is no longer interested in them.

Politics and religion are not being discussed here... money and economics are.

As far as misinformed numbers and such things..... this current world economic situation is a situation that has been on the making for more than ONE HUNDRED years.... not ten. 

Countries that have tried to use socialist policies, policies intended to "help the less fortunate among us" by using the money and wealth of the people who run businesses and work hard, have always reached the tipping point where they have added to many programs, and spend more than they take in in this vain attempt.  The result is always collapse. The USSR lasted longer because they were invading other countries and taking the treasure to keep the social dream alive. Eventually, they went bust. Some say the war in Afghanistan was their ultimate undoing....... should we take a lesson from that? ( that's another topic for another thread)

How long, for example, in the USA have we had social security? ( FDR's administration) It was originally a 3% tax never intended to raise it higher.  It's now 15% with talk of raising the age of eligibility and tax rates again. Most people do not know..... but the higher income earners do know, that the CAP  level on social security has been rising every year.  There is no cap on medicare payment from your check. but it's "only" about 2% so not as noticeable.

How about the "war on poverty" started back in the 60's?   Was it LBJ that started that? The numbers I have heard on the programs set in place.... and by the way...still in place today, is that we have spent Trillions of dollars to eradicate poverty, and the result?  More people living in poverty and collecting program dollars than ever before in history. I'd say we lost that war, so close the programs down and save hundreds of billions every year. But the programs persist, and the reasoning is even though they are ineffective and in some cases harmful to the people on them..... they "help" the poor who would have no other source of food or rent or medical or income or.... the list goes on and on.

These are just 2 examples of "well intended" programs put in place by the govt entities. Both are social programs designed to help the less fortunate..... both are failures, and both are now dragging our country deeper into this morass.

Unless we drastically cut the cost of these things and others, eliminate entire government departments and take some very drastic steps to cut total overall spending, the debt will increase beyond what we can deal with.


I liken what we are going through right now to the chest pain and numbness that many men experience before a heart attack. So, are we going to head to the hospital and make the cuts in spending...(it's not that we don't tax enough, it's that we are spending too much money that we do not have) ....

..........or, do we reach for that big fat filled juicy burger and fries and a large milk shake and light up another cigarette while telling ourselves that it's going to be alright..... ?

Seems to me, the additional spending bill with future cuts that never seem to happen, is exactly what we have done. Investors didn't like it one bit, and these are people that know how money works. Politicians on the other hand, who live in a fantasy world, and have never run a business or in many cases, never collected a private sector paycheck, do not have a clue.

The ones trying to "solve" the problem are the same ones who created the problem..... are you scared yet?

I am not promoting a "political POV" on either side of the aisle.  Both sides are involved in creating this global problem.

I am addressing the issue and the dangers we all face due to the incompetence, if not treasonous dealings of those "leaders".

Whether you agree or not, this issue affects everyone. If you have any sort of retirement account, plan to collect social security in your golden years, or work until you die..... the ramifications of this will affect every single person. 

The last time the markets took a dive, they were around 14k (IIRC) at the time, many people, other business men and women, who decided to "stay the course" with the stock market retirement funds, lost around 50% of their value almost overnight.

One friend of mine was planning at that time to put his business up for sale and do an early retirement on his savings and after tax profit from the sale. The decline changed everything. He couldn't sell because the business slowed down, his retirement saving evaporated by 50%, and suddenly, he was looking at 10 to 15 more years having to work to recover to the breakeven point.

No it's not a political discussion, although I do admit, the root cause of the problems facing the world were in fact created by politicians....


gotta run... work to do, money to make taxes to pay..... got to do my fair share for me and three other people on the government social programs.

Herb, Talk of shutting down Social Security, Medicare, Medicaid is the kind of rhetoric that's just flat unrealistic. It's not going to happen, plain and simple. These programs obviously need to be adjusted and waste and fraud need to be eliminated as much as possible, but they are not going to be eliminated.

In every industrialized country, the have's contribute to take care of the have nots. Those that assume that the majority of people that are  eligible for these programs are more than capable of pulling thier own weight, just choose to be lazy and live off the public dole kind of people, are seriously misinformed.

Randy