The markets and the raters and world sources are being quite clear what would happen should we refuse to raise the debt limit and default:
Moody’s Investors Service warned late on Wednesday that the U.S. could lose its top credit rating in coming weeks if a standoff between the White House and congressional Republicans over raising the statutory borrowing limit is not resolved.
Earlier on Thursday China, the United States’ biggest foreign creditor, urged the U.S. government to adopt responsible policies to protect investor interests after the Moody’s warning.
Another ratings agency, Standard & Poor’s, also privately told U.S. lawmakers and business groups that it might still cut the U.S. government’s rating if the government fails to make any of its expected payments — on debt or other obligations — a congressional aide said on Thursday.
China, who owns a lot of our debt, is not being subtle:
The authorities in Beijing added their voice of concern Thursday, though in more muted terms.
“We hope that the U.S. government adopts responsible policies and measures to guarantee the interests of investors,” Hong Lei, a Foreign Ministry spokesman, said in response to questions about the Moody’s report.
The comments echoed those made by officials in Beijing in April, when Standard & Poor’s lowered its outlook on the United States from stable to negative because of the country’s high budget deficit and rising government indebtedness.
China holds more than $1 trillion in United States Treasury securities, making it highly sensitive to any developments that could lower the value of those holdings.
Yet still, the wingnut intelligentsia think they can defy reality through the power of ideology, and are doing so by attacking the ratings agencies:
The ratings agencies — all-knowing, all-seeing, omniscient — have weighed in on the U.S. federal debt “crisis,” talking about downgrading U.S. paper in anticipation of a Beltway failure to cut a deal to raise the debt ceiling, thus engendering a “default.”
Oh, please. Can anyone believe that the global capital market cannot distinguish between a Greek-type situation, in which the government literally cannot service its debts, and the U.S. condition, in which a political dispute might delay some interest payments for a few days? The question answers itself. More generally, has there ever — ever– been a case in which Moody’s or Standard & Poor made an announcement in light of information not already known by everyone? The ratings agencies, always closing the doors on empty barns, are virtually worthless, and would be unlikely to survive an elementary market test were it not for some legal requirements that their ratings constrain certain investment decisions.
Moreover, even the underlying premise is incorrect: In the event that the debt ceiling is not increased, federal revenues will be far more than merely sufficient to service the existing debt, roll over maturing debt, etc. Revenues will be sufficient to pay Granny, our servicemen, and other such untouchables. The ethanol producers and myriad other interests might have to extract their snouts from the federal trough for a few days; but so what?
Look, I can not stand the ratings agencies and think they got away with widespread fraud in the financial meltdown. I would love it if we reformed the process. But I realize that this is what I want to change, and not how things work now. This really is not hard to understand. People who run up debt and then either can not or will not pay it back are not credit worthy individuals. Every single person on the street understands this. If you have a bad credit rating, it is harder or impossible to get credit, and should you get credit, you will payer higher interest on your debt. That’s how it works. That is the system we have. So even if you hate the ratings agencies and think they are wrong about everything, if we default and fail to make debt payments or pay any of our obligations, our rating will be downgraded. They ratings agencies and the world won’t buy into the wingnut belief of American Exceptionalism in all things. They aren’t going to say “Oh, well, this is different.” How do I know that? Because if you read above, THEY ARE TELLING US AHEAD OF TIME WHAT WILL HAPPEN. We will then start a death spiral of higher interest rates and higher debt repayment rates and so on. And that is on top of the cataclysmic effects this will have on the markets and the overall global economy.
And no one will be safe. No one. Every single investment will be at risk- pensions, mutual funds, 401k, you name it. Again, this is just not hard to understand.
LittlePig
this is just not hard to understand.
Unless you live in Wingnut Land. Which unfortunately is where most Republican representatives hang their hats.
joeyess
It is if you are a member of a certain political party that has one agenda……… making this economy so bad that you win elections running on a faux-populist, christo-fascist platform.
Hard times require harsh measures. Oh, and lots of jesus.
LittlePig
federal revenues will be far more than merely sufficient to service the existing debt, roll over maturing debt, etc.
Which cornerite said that, I wonder? Awfully straightforward for a Jonahism.
Han's Solo
I’ve noted it before, but this AM Joe Scarborough said the following:
Citizen_X
Bachmann also mocks the whole idea of the credit-rating disaster, and blames it all on Obama’s “shoot-spa.” (Seriously. Jews, despair!)
How do you negotiate with hostage-takers who think their guns are fake?
Dennis SGMM
Now, now, now, calm down. It’s going to take strong medicine to return this nation to the Steam Age. The Republicans are just the ones to give us a dose that even penicillin won’t touch.
The Populist
Right wing nuts listen up:
Iran, for example, wants OPEC to make the Euro or Yuan as the currency payment device for oil. Default will mean that idiots like Iran will get their way, gasoline will skyrocket.
What is it that these tards don’t get? Oh yes, the black Preznit is the problem so we must break with tradition and risk our financial futures so they can make him look bad.
My business has loans. What happens if rates go up? What happens if my adjustable rate mortgage goes way up? I just do NOT want to find this out. These morons have to be shunned and ignored. PERIOD.
schtum
There is no difference, for an investor, between a Greek-type situation, where the government cannot pay their debts, and the potential US situation, where the government may arbitrarily choose not to pay its debts. Either way, you don’t get paid. Nobody cares about how or why.
JPL
Maybe they could tell the difference if the Republicans house members weren’t batshit crazy. I can see it now, trust us for a few days and if armageddon doesn’t happen, they will never vote to increase the debt later..
Han's Solo
If we are going to start talking about things that aren’t hard to understand how about we start with: Lowering Taxes Lowers Revenue.
I think you seriously underestimate how hard it is for some of the teabaggers to understand anything. Want evidence as to how dense they are? How about this one, “Keep you government hands off my Medicare!”
Thoughtcrime
No, this is worse. If the US refuses to honor its debt at a time when it actually has the ability to pay, why should anyone ever trust its debt in the future?
Full, faith and credit destroyed forever.
Alex
The Republican/teaparty/conservative/whatever answers to the debt ceilign crisis are amusingly sad.
1. It doesn’t matter if the debt ceilign isn’t raised because (Obama will break the Constitution/ratings agencies will ignore it/the government is lying and can pay for stuff).
2. Also, this is all Obama’s fault for (not presenting a plan/not compromising enough by daring to draw a line at increasing taxes/holding the debt ceiling hostage to increase taxes)
3. And finally, the Democratic party could have avoided this if they (raised taxes/passed a budget)* in 2010.
It’s like a pseudo-mad libs. The first point is constantly repeated, while the back-up evidence is stupid and constantly shifting.
It’s almost as bad as when they alternate between “Where is their plan?” and “Their plan is terrible because it raises taxes on job creators!”
* Oddly enough, they never say this could have been avoided by raising the debt ceiling in 2010.
———–
I’m kind of ready for the debt ceiling to cause Italy’s default leading to koalas invading Antartica. Maybe the global collapse of civilization would give me enough time to read A Dance with Dragons.
Mike Goetz
“It was also the end of freedom for Greece; because freedom, in the last resort, means the right to determine one’s own future, for good or ill, the right to be stupid, vindictive, dishonest or faction-ridden if that is the will of the majority. Free men would always rather make a hash of affairs on a public vote than be dragooned into efficiency and success by any dictator, however far-sighted or benevolent…An ideological opposition [Philip and Alexander] could neither understand nor deal with: Philip regarded such an attitude with jovial cynicism, while Alexander simply rode roughshod over it. The polis, the city-state, had run its course: a new era was dawning.”
— Peter Green, Alexander of Macedon, 356-323 B.C.
Same shit, different millenium.
The Populist
They could if they had a clue when the debt ceiling would be raised and full payment could be made. What is so hard to figure out that debt holders have every right to be concerned?
Minnesota is in, what, day 15 of their shutdown? When I pay my debts by the due date, my credit rating stays the same or goes up. If I pay 31 days late I get dinged, my rating goes down, my interest rates go up and my credit standing drops.
How come I get this? Creditors NEED to know when they are getting paid. The debt ceiling allows for them to KNOW they will be paid. If I am owed money why should I have to wonder when I will be paid right wing nuts?
beltane
@The Populist
Unfortunately, they are in a position where they can’t be shunned and ignored. Instead, we must attack and eviscerate them. Isn’t it one of the duties of citizenship to defend our country from all enemies foreign and domestic? If the fleabaggers aren’t a domestic enemy I don’t know what one is.
chopper
ask any business that borrows on schedule to cover payroll if it would be ‘no big deal’ if their credit rating took a shit.
right. i dunno if it would be great depression II:electric boogaloo, but it doesn’t have to be.
besides which, think of all the legally-required investments in AAA-rated paper all over the financial sector, in banks and pension funds and shit. what happens when all these businesses and funds have to unwind their treasury holdings to find some other (practically nonexistent) AAA-rated paper in this country? what are they going to replace that shit with?
the NR can eat a bag of dicks and choke on every last one.
The Populist
I also should ask why the right claims to be smarter when it comes to business? From watching this mess of a debate, I have to call that whole meme to question.
kindness
Gaack! Just looked at the new post over at GOS:
Reid, McConnell working on ‘hybrid’ solution to bypass House GOP in debt standoff
Which apparently has:
Don’t know how much of that is true but if any of it is…just shoot me now and get it over with.
Sasha
It’s literally incredible: “Fiscal conservatives” are arguing that the most financially responsible thing for a person with an excellent credit rating to do is to intentionally sabotage their credit score.
We really are in Wonderland, aren’t we …
The Moar You Know
The suicide bombers of the GOP have a nuke and don’t care who they kill so long as they get that goddamn uppity negro out of the White Man’s House.
All I can do is read the news with my jaw resting rather uncomfortably on the floor. I cannot believe that we have gotten to the point where the Teatard faction of the GOP is claiming that default on the national debt would be “no big deal, business as usual”.
Somebody please tell me this is going to get resolved without driving the world economy off a cliff.
Villago Delenda Est
It is if you’re Ron Paul.
Jim, Foolish Literalist
I wonder how Donohue of the national Chamber of Commerce feels about all the money and effort he spent getting the Tea Baggers elected. I wonder how the CEOs and corporate boards and major share holders feel about have listened to Donohue.
Actually I’d be surprised if Donohue had learned a damn thing.
scav
mmm, somehow I think our tiny bit of unpaid dept >> all of Greece’s unpaid debt. Not to imply that mere magnitude matters along with that other intangible called uncertainty that otherwise so very much correctly frightens markets and must never be allowed to occur.
MattF
Recent efforts to hang all this on Eric Cantor give me a warm feeling, but… he’s representative of the winger caucus in the House, and that’s where the actual problem is. So, ‘interesting times’, etc., yadda yadda.
LongHairedWeirdo
It’s a bit more than just overall credit-worthiness.
Bond interest payments are like payroll. If you can’t be trusted to make those payments, you can’t be trusted at all. A close friend might let you buy, but then, a close friend is lending on your personal note, *not* by bonds!
It’s hard to explain if you’ve never done a bond issue. Those interest payments are absolutely sacred. It’s not being slow on your payables, which you can get away with, it’s not trying to negotiate better terms on a loan, which you can get away with, or rolling over a loan, which you can also get away with. If you can’t make every single interest payment on bonds, you don’t issue bonds. (Or, if you do, don’t expect any As in your rating.)
Mike Goetz
Does anybody, anybody at all, remember when Russia defaulted in 1998? It sent shockwaves through the world economy, even though everybody already knew it was coming and was orders of magnitude smaller than a U.S. default.
What is going on now is a deliberate look into the abyss.
JPL
OT>>>must thank TPM
The AP is reporting that the Justice Department is looking into the allegations that News Corp. hacked into the cellphones of 9/11 victims. We’re told to expect a statement from DOJ shortly. More when we have it.
catclub
“Every single investment will be at risk- pensions, mutual funds, 401k, you name it.”
Is it not the case, though, that if EVERY investment is at risk they all move the same amount and no relative change occurs?
Is owning dollars ( or euros) different than an investment?
Is owning gold (gad) different than an investment?
I actually am starting to think that stocks will do better than bonds. But what do I know.
Martin
I don’t think it’s the interest that is the problem. I think it’s the inability to pay back the principal on maturing bonds that’s the real problem. Remember, we hit the debt ceiling 2 months ago. We’ve been squeezing dollars out of stones since then and making those interest payments all that time. I think next month we fully run out of cashflow to pay off maturing bonds.
Belafon (formerly anonevent)
kindness
I would take that with a grain of salt. They can’t bypass the House.
Comrade Luke
Paging Donald Trump!
Chris
@ Mike Goetz,
“The best argument against democracy is a five-minute conversation with the average voter.”
That quote comes to mind so often these days that I keep needing to balance it out with the other Churchill nugget –
“No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.”
FlipYrWhig
@ Citizen_X: “Shootspa”? Oy gevalt.
daveNYC
I agree totally. The first example they describe is a default, second example is a strategic (or ruthless) default.
Bulworth
That NR quote is pretty amazing. I guess it has something to do with trying to make sure the political party in control of the House doesn’t get blamed.
cat48
I already called the Teapublican in my district & screamed at them about my govtret check this morning after I got an email from him about the Debt ceiling vote. The person I talked to kept explaining the Ryan Plan/Medicare to me, rather than the debt ceiling. It made me very angry. I’ll send an email later!
Stefan
besides which, think of all the legally-required investments in AAA-rated paper all over the financial sector, in banks and pension funds and shit. what happens when all these businesses and funds have to unwind their treasury holdings to find some other (practically nonexistent) AAA-rated paper in this country? what are they going to replace that shit with?
And when they all have to sell their previously AAA rated Treasury holdings on the same day, what happens to the price of Treasuries (and to their inversely correlated yields and thus borrowing costs)?
rikryah
errbody can see what you see Cole, except for the lunatics in the GOP.
Corey
Stop blaming this on wingers. The president wants to use this as an opportunity to cut spending.
Why? Because hope, change, bringing both sides together, etc. etc.
The Populist
My nutjob republitard’s staff said the rep is not interested in creating more debt by raising the ceiling. I explained to them I own a business, I have to service debt payments and that if my interest shoots up will they be reimbursing me?
No answer than a standard “we will let the rep know of your concerns, thank you!”
(sigh)
The Populist
If he cuts spending on stupid crap I don’t think ANYBODY is against this. It will also allow Obama to invest in the good stuff he talked about in one of his recent pressers.
elmo
This is self-evidently true. Just like when Experian or TransUnion issues my credit score. They don’t give a shit whether I actually do make my payments on time — all they care about is whether I have a high enough income that I could if I wanted to.
Isn’t that how it works?
comrade scott's agenda of rage
It just dawned on me, this is a subtle plan by the wingnuts to provoke an armed confrontation with China.
They’ve quietly (and occasionally not so quietly) been wanting to “deal” with China since Dubya was selected for the Prezdintcy. Those pesky turrists detoured the wingers from who they consider the real global enemy of the USofA.
So, now they hold fast and default and the Chinese get pissed! Yeah, that’s the ticket. We can give those Reds the big red, white and blue middle finger and dare em to do something about the fact we’re not gonna pay a dime of interest on all that debt. Send a warship into the South China Sea? We’ll declare war on your asses. Etc, etc.
Nothing is too crazy for this bunch.
The Populist
This. Maybe these teatards think it’s okay to skip out on obligations, but our nation can’t do this.
I lived in Orange County, CA when they went belly up and saw the havoc it caused. I can see what kind of havoc will befall normal folks should this default happen.
These people claim to be conservatives and as such like to tout their perceived superiority on paying debts, running businesses and the like. Defaulting just proves they have zero clue how things work in the real world. God…I do fear the consequences if this country defaults, even for a day or two, in the middle of a deep recession.
FlipYrWhig
To follow up on The Populist / 41, I would like it very much if we could shift spending from areas where each dollar provides diminishing returns, waste, and bloated profits to areas where each dollar produces tangible benefit. Turn $10,000 in grift into $5,000 in necessary goods and services and you’d be WAY ahead of the game. From my perspective, that would be a nominal “spending cut” that was unquestionably good.
jl
People can argue for hours about whether the ratings agencies know what they are talking about, or are corrupt, or whatever.
But we have additional sources of information now, and that is what banks and large financial and other corporations are doing in order to prepare for any kind of default, whether to bond holders or other contracts (which suddenly seem to be not so sacred when it is not convenient for them to be sacred to insane radical reactionaries).
So, people should watch that source of information, and see how well it matches up with that the bond agencies are saying.
OF course, an agency downgrade would be the cause of some of that action.
Before the agencies were saying ‘sure, the US will pay, but we don’t like the macroeconomic environment in which those payments will be made’. Well, problem there is that there are lots of people in academia, finance and business who think they know just as well as the bond agencies about that macroeconomic environment.
Now, the agencies are analyzing the situation where the US may not in fact pay people to whom it owes money, both bondholders and other people with legal contracts. So, it is a different situation.
drc
The last American default
http://www.reuters.com/article/2011/07/11/usa-debt-default-idUSN1E76A0XA20110711
During the Carter administration Republicans played footsie with the debt limit and we technically defaulted. That permanently raised Treasuries by 60 basis points or 0.6%. Such a move if we were lucky enough to keep the increase down to 0.6%. That way it would only cost us $861 Billion in extra interest on the debt for the first year
Martin
No. Try it. Miss a few payments. It’ll sink like a stone.
You might be interested to know that as part of the state budget deal, the state told OC they were on their own with the remaining cost of the bankruptcy – the state won’t carry the county any longer. I took that as a nice fuck-you to the Republicans who wouldn’t go along with anything in the budget.
Culture of Truth
It’s like the political roles have been reversed. The wingers have been screaming about the debt and now it’s like, what, oh never mind, the debt doesn’t matter.
El Cid
China is merely ignorant of the threat posed by FannieFreddie and ACORN.
Bubblegum Tate
Don’t you know that Moody’s is only trying to scare us, John? It’s all lies, you see:
Martin
That can’t be right. You can’t triple the debt service cost through a mere 0.6% increase. The rate on much of the debt is fixed – so the 0.6% increase would only affect the cost of newly issued fixed rate bonds and variable rate bonds. In the former case, we’d carry that rate hike for the duration of the bond. In the latter case, the rate hike would decline as investors came to trust Treasuries again.
SenyorDave
Can someone please explain what a credit rating drop means to Cantor, that self-serving little prick. Tell me this little twerp wasn’t beat up every day in high school.
I think Obama could work with Boehner, he’s your basic corporate hack who wants to work banker’s hours so he can hit the golf course and the bar (not necessarily in that order).
But Cantor? He’s the kid who is used to being one of the smart kids and always wanted everyone to know it. Now he’s not so smart, but he’ll hold his breath until he turns blue.
Ben
Now that the process of raising the debt ceiling has become so politicized, is there any way that a credit rating agency wouldn’t lower the rating? Regardless of the outcome of the current manufactured crisis?
Martin
He knows. You’re assertion is that the suicide bomber doesn’t know what the vest is going to do. He knows what it’s going to do. He doesn’t care. He’s got a larger objective. So does Cantor.
Thoughtcrime
I liked this comment on TPM:
http://tpmdc.talkingpointsmemo.com/2011/07/gop-demand-obama-protect-seniors-from-default-wont-name-what-to-cut-instead.php?ref=fpblg
4tehlulz
@Thoughtcrime: lol’d because it’s true.
Linda Featheringill
Regardless of what the rating agencies do or don’t do, absolute trust in the US govt to pay its debts may have already evaporated. We scared everybody and they don’t like that. They will worry about what will happen the next time.
I don’t know what the international financial folks will do about it but I would bet that they’ll do something. It won’t be business as usual.
[shootspa? dayam!]
Thoughtcrime
Also from TPM commenter:
Get Obama Party
Evolved Deep Southerner
Man, the TPM commenters are hitting on all cylinders today:
On Job Creators and Cargo Cult Republicans.
catclub
Martin @ 53 misplaced decimal syndrome:
0.6 * 0.01 (%) * 14.3T = 85B
so, $85B cost of 0.6% increase in interest costs, for one year.
Triassic Sands
Unless you’re a Republican and then it’s twice as hard as explaining relativity to a cat.
Linda Featheringill
triassic #63
And not nearly as much fun. :-)
Judas Escargot
@efgoldman:
Je vous présente: Senator Rand Paul.
Judas Escargot
Actually, I assume that he wasn’ t beaten up enough in high school.
That level of smugness makes it clear that he’s never been subject to the usual “corrective mechanisms” that normally keep asshole behavior in check amongst peers.
DZ
@Judas Escargot:
Also, too, James DeMint
Judas Escargot
@DZ:
I saw this and my first thought was: “Is DZ responding to #65, or #66?”
Then came my second thought: “Yes!”
We are Bigger than you Think
We have to destroy the village in order to save it. Sadly, in fact we have to destroy several villages. Quite a few actually.
Then Petraeus and/or Mattis can ride in on white horse(s) and maintain security. We might need a short period of martial law until we can sort out which politicians can be trusted. Once the millstone of government has been removed from the necks of the wealthy job-creators – there will again be prosperity and unicorns. And what is wrong with that?
In the meantime we hope the reasonable, moderate centerists amongst you will continue to beat the hell out of the left, liberals and DFH, who despite almost 30 years of largely supply-side/neo-liberal economic policies, have somehow managed to wreck our once prosperous national economy. Who could have known?
Just be cool. Don’t panic. Remain vigilant. Everything is under control.
Georgia Pig
That is stupid on a stick, and anyone putting this forward has no fucking business calling himself a “conservative.” On a certain level, there really is no distinction — the defaults would both be political. Our creditworthiness, like Greece’s, rests largely on our perceived stability. Greece suffered from a destabilizing political dysfunction that prevented them from collecting sufficient tax revenues because of widespread noncompliance with tax laws and corrupt allocation of government resources. What the tea party is instigating is destabilizing political dysfunction wherein one of the political parties — aided by a propaganda outlet run by a stateless, unethical media tycoon — is unable to recognize that they simply cannot off turn government expenditures that have already been committed to and relied upon in order to immediately put us on the road to a wingnut nirvana.
One thing that’s bugged me throughout this process is the fundamental way in which this action on the part of House Republican leadership is an affront to separation of powers, and it shows in the complete disrespect that assholes like Eric Cantor are showing toward the President, and in jackoff comments like this that blithely suggest we not meet obligations, that it would be “no big deal.” For a bunch of incessant moralizers, these guys sure have a relativistic practical ethics. It is completely inappropriate to do what they’re doing in the debt ceiling context (which is why I think the debt ceiling is inherently unconstitutional, irrespective of the 14th amendment); it should be done in the appropriation process, where they have no ability to fuck up our credit rating.
Our system is designed such that there is supposed to be limited ability to create revolutionary change simply because of a changeover in the House in one off-year election. It would be an act of national suicide to let them short circuit separation of powers, which is a huge part of what has made us such a good credit risk, under these circumstances. Creditors have traditionally viewed our political system as designed to prevent a mob, such as the Tea Party, from doing the very thing they’re attempting to do.
catclub
Linda F @ 64 No, no, no it is electromagnetic radiation (radio).
Einstein said that radio is like a very, very, long cat.
You pull his tail in NY and he meows in LA. Except there is no cat.
Relativity is like when 15 minutes in a dentist chair seems like hours, but hours spent with a pretty girl on your lap seems like minutes.
Einstein quotes are the best.
Berial
Can someone tell me who Weigel is calling the ‘liar’ here? I honestly can’t tell who he is disagreeing with. I get that from him ALL THE TIME. Is he agreeing with the Republicans that the president is a ‘liar’ or is he saying the Republican’s saying this are the ‘liars’?
I Don’t Believe You. You’re a Liar.
catclub
GP @ 70 BTW, it was just days ago that the same people were claiming that our budget system is just like Greece’s,
unsustainable.
Georgia Pig
catclub @ 70
Yeah, and the thing is that, while we’re not like Greece now, the Tea Partiers are doing their best to make that a reality.
Rome Again
Regulations are only a good thing if they come from the fist of God himself! Don’t you know this yet?
Bender
Apparently, math has a conservative bias. We have the revenue to pay our obligations, even without a hike in the ceiling. There will be no default, and the ratings agencies know it. They are just playing Obama’s game.
And if only Democrats were so knowlegable about debt defaults when Bahney Fwank was handing out subprime mortgages like they were condoms in his home gay prostitution business. How’d that all work out again?
TenguPhule
My Sole Consolation if/when it all goes into the crapper is that it becomes wingnut open season. No Bag Limit.
At that point, got nothing left to lose.
SFAW
JC –
1) What does “wingnut intelligentsia” mean? It’s kinda self-contradictory.
2) Since when do wingnuts think? They squawk and pule and puke and whine just fine, but “think”? I don’t believe there have been any occurrences of that alleged phenomenon in all of recorded history. For example, take Bender’s recent screechings, none of which bears any relation to reality, but he done wrote whut they tole him, so it’s all good. But had he tried to actually think while writing that, his brain [sic] probably would have tried to strangle itself.
TC
What nonsense. The issues of “ratings” and “creditworthiness” cannot be intelligently discussed until the larger portion of the nation’s debt that, in fact, is illegitimate — namely, the tens of trillions backing a leveraged Ponzi scheme (RMBS) which the ratings agencies helped erect — is separated from debt that is a blessing — namely, that which serves to elevate the nation’s wealth and that of its people, of course.
And there it is, Glass-Steagall: twice now promoted in bills before the House. You say you would “love it if we reformed the process,” but demur to “how things work.” Well, let me assure you. The U.S. Treasury is made at risk only by attitudes such as this. Yet the growing number of representatives in Congress who are coming to understand the difference between legitimate and illegitimate debt — who are backing Glass-Steagall — surely could use a more courageous constituency.
That’s all I have to say about what I otherwise thought was subservient drivel given criminal ratings agencies who helped stuff the banking system with more funny paper than can possibly be used in Thanksgiving Day parades across America for the next 100 years.