Tag: New York Fed

Was the WH behind the S&P and Moody credit rating hit job?

When I saw the news yesterday that Moodys put the US rating on a downgrade watch and that was also followed immediately by Standard & Poor’s pushing the same narrative, I immediately became suspicious of the timing and this idiotic warning. Remember that Moody and S&P where the people that kept telling us that all those mortgage security packages, replete with bad loans almost guaranteed to go south, repackaged through Freddie and Fannie, where great investments up until the whole house of cards came crashing down. I smell a rat here, and think this whole concerted attempt by these two to push us into giving the democrats what they want – more debt – isn’t a coincidence at all.

I am still surprised at the fact congress has not subpoenaed the management of S&P and Moodys to figure out what they knew. At a minimum it would prove – if they are going to make the claim they just didn’t know better – they have no fucking clue what they are talking about, or worse, and this is what I suspect happened, they would have to come clean on why they continued to pretend the buckets of shit where being lauded as a buckets of gold. Whether it was done so the fat cats could keep getting bigger houses, faster cars, and nicer fortunes by selling that junk off to everyone, or simply because they figured that nobody would ever catch on, if they knew and let it go on, it was criminal.

Enter Tim Geithner, whom I remind you was the Chairman of the New York Fed when everything was collapsing back in 2008, and for not catching on that the world was melting down around him, got rewarded for his that and his lack of concern about paying taxes like the rest of us by Obama, to the post of Secretary of the Treasury. Let me also point out that Tim has some real cozy relations with both the heads of Standard & Poors and Moodys. So, you can see how I am now immediately suspicious about this concerted effort by these two to convince people that allowing the democrats to force us to rack up trillions more in debt is better for our rating than putting an end to their insane fiscal policies.

What I suspect we have here is Obama telling Timmy to call his buddies and then telling them to help these collectivist tax-and-spend-command-economy nutjobs push their agenda, by making this ludicrous announcement in the hopes it forces the republicans to break down and give in to the Obama/democrat bullshit promise of cuts in the far away future – which guarantees they won’t happen ever – and tax increases that will hit the economy even harder, and that’s just plain wrong. But will the media figure this out and report this or just go right along and continue to shill for Obama and the democrats? I know, rhetorical question. For all their talk about the evil capitalists and the evils of capitalism, these collectivists sure seem to be in bed with the biggest and baddest of them all, and these bastards sure seem willing to say whatever lies it takes to help keep them in business.

UPDATE: More details about the real reason that our rating will be hammered and confirmation that what I was thinking was the reason behind S&P and Moddy doing their announcements come from this WSJ article. Some prime quotes:

So the credit-rating agencies that helped to create the financial crisis that led to a deep recession are now warning that the U.S. could lose the AAA rating it has had since 1917. As painfully ironic as this is, there’s no benefit in shooting the messengers. The real culprit is the U.S. political class, especially the President who has presided over this historic collapse of fiscal credibility.

Moody’s and the boys are citing the risk of a default on August 2 as the proximate reason for their warning. But Americans should understand that the debt ceiling is merely the trigger. The gun is the spending boom of the last three years and the prospect that Washington lacks the political will to reduce it in the years to come.

On spending, it is important to recall how extraordinary the blowout of the last three years has been. We’ve seen nothing like it since World War II. Nothing close. The nearby chart tracks federal outlays as a share of GDP since 1960. The early peaks coincide with the rise of the Great Society, the recession of 1974-75, and then a high of 23.5% with the recession of 1982 and the Reagan defense buildup.

From there, spending declines, most rapidly during the 1990s as defense outlays fell to 3% of GDP in 2000 from its Reagan peak of 6.2% in 1986. The early George W. Bush years saw spending bounce up to a plateau of roughly 20% of GDP, but no more than 20.7% as recently as 2008.

Then came the Obama blowout, in league with Nancy Pelosi’s Congress. With the recession as a rationale, Democrats consciously blew up the national balance sheet, lifting federal outlays to 25% in 2009, the highest level since 1945. (Even in 1946, with millions still in the military, spending was only 24.8% of GDP. In 1947 it fell to 14.8%.) Though the recession ended in June 2009, spending in 2010 stayed high at nearly 24%, and this year it is heading back toward 25%.

This is the main reason that federal debt held by the public as a share of GDP has climbed from 40.3% in 2008, to 53.5% in 2009, 62.2% in 2010 and an estimated 72% this year, and is expected to keep rising in the future. These are heights not seen since the Korean War, and many analysts think U.S. debt will soon hit 90% or 100% of GDP.

The problem is G-O-V-E-R-M-N-T S-P-E-N-D-I-N-G, which has gone up by an insane factor since democrats took the levers of government over after making the ridiculous promise that they would be more fiscal disciplined than their predecessors, not the fact that government, now run by command economy collectivists completely detached from reality and spending at record numbers that make the people they replaced look like pikers, isn’t stealing even more money from the productive sector to buy votes. That’s why we can not let them win this fight. Cuts now, no taxes. The big government gravy train must go the way of the Dodo bird.