Posts Tagged ‘AAA’

‘No Risk’ Of US Credit Downgrade? Clueless Timothy Geithner Has GOT To Go

August 8, 2011

Let the words of Turbo Tax (so named because the man who would be charged with enforcing US tax laws and policy failed to pay his own damned taxes and then blamed it on Turbo Tax) Timothy Geithner now resonate throughout the land:

That now proven-to-be-utterly stupid pronouncement was not what people who had something of an actual clue were saying prior to the debt deal:

Analysis: U.S. credit downgrade ‘inevitable’
By Daniel Stone | The Daily Beast – Mon, Jul 25, 2011

Only seven days stand between the U.S. and the effects of a credit default. But a downgrade of the nation’s stellar AAA credit rating seems a lot more likely, and a lot sooner.

The White House had been alerted repeatedly over the past month by rating agencies that without a strong, long-term plan to restructure the country’s debt, they would lower America’s credit rating as soon as this Friday, according to two officials familiar with the process. The White House was warned that the deal would have to be significant—and not a short-term fix over the next few days to avoid a credit drop.

Which makes it worth asking: Just what DOES this fool actually understand?  And why on earth should anyone believe anything he says after this???

Notice that the following article was questioning Geithner’s basic intelligence well before the S & P decision to downgrade the US credit rating Friday at a time when maybe Geithner could have turned out to be correct.

Geithner Downgrades His Own Credibility to Junk: Jonathan Weil
By Jonathan Weil- Apr 20, 2011 4:00 PM PT

Fox Business reporter Peter Barnesbegan his televised interview with Treasury Secretary Tim Geithner two days ago with this question: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

Geithner’s response: “No risk of that.”

“No risk?” Barnes asked.

“No risk,” Geithner said.

It’s enough to make you wonder: How could Geithner know this to be true? The short answer is he couldn’t.

All you have to do is read the research report Standard & Poor’s published on April 18 about its sovereign-credit rating for the U.S., and you will see it estimated the risk of a downgrade quite succinctly. “We believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years,” said S&P, which reduced its outlook on the government’s debt to “negative” from“stable.”

There you have it: Geithner says the chance of a downgrade is zero. S&P says the odds it will cut its rating might be greater than one out of three.  So who are you going to believe? Geithner? Or the people at S&P who actually will be deciding what S&P will do about S&P’s own rating of U.S. sovereign debt?

It would be one thing to express the view that a downgrade would be unwarranted, or that the chance of it happening is remote. Either of these positions would be defensible. Geithner went beyond that and staked out an absolutist stance that reeks of raw arrogance: There is no risk a rating cut will occur. He left no room for a trace of a possibility, ever.

Battling Barney

The mystery is why Geithner would say such a thing. What’s he going to do if S&P or some other rating company winds up disagreeing with him? Send Barney Frank to beat them up?  The problem for leaders who make indefensible claims like this one is that, after a while, nobody knows whether to believe anything they say. Just remember all those government officials inGreece, Ireland and Portugal who kept saying their countries didn’t need bailouts, long after it became clear they did.

This was the same answer Geithner gave during an ABC News interview in February 2010, when asked if the U.S. might lose its AAA rating. “Absolutely not,” he said. “That will never happen to this country.” So, an asteroid could destroy the entire Eastern seaboard 100 years from now. And, in the world according to Geithner, we’re supposed to believe America’s top rating would be safe.

Perhaps Geithner would be well-positioned to make such assessments if he were the only person on the planet with the authority to grade sovereign debt — and if there were zero risk that he would ever die. Not only is Geithner mortal, he doesn’t even work for a nationally recognized statistical rating organization.

[...]

Timothy Geithner needs to go.  He needs to go like three years ago.

Geithner is the epitome of just how profoundly out-of-touch and arrogant Barack Obama and his failed administration is.

Case closed.  Geithner has got to go.

Barack Obama, Fearmonger And Demagogue Extraordinaire Gutting America’s Credibility With His Lies

July 27, 2011

When Obama was lying and making false promises to shove his so-called “stimulus” boondoggle through Congress, the Wall Street Journal wrote:

“President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.”

History now proves that everything Obama said about his $862 billion (actually $3.27 TRILLION, according to the CBO) was false.  Not only did unemployment not stay under 8%, as was promised, but in fact unemployment actually went HIGHER than Obama said it would have if we hadn’t ever done his incredibly stupid and incredibly wasteful porkulus to begin with!

But early in his presidency, Obama learned that he could get what he wanted if he fearmongered a situation and demonized his opponents enough.  And whether he was lying while his opponents were telling the truth was of little import.

As I (along with a few million other conservatives) pointed out, Barack Obama was lying and fearmongering the economy when he repeatedly claimed that the United States would default on its debt if we didn’t pass a debt ceiling hike (which he would only allow to pass on his terms, of course).  The facts said otherwise.  Republicans filled the airwaves pointing out that Obama was lying and that the United States could and would continue to meet its obligations to its debt.

Now we find out that Obama KNEW he was lying when he has repeatedly talked about default:

Obama to Banks: We’re Not Defaulting
By Charlie Gasparino
Published July 25, 2011

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date.  Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It’s unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation’s debt to a lower level.

Major ratings firms — namely Standard & Poor’s and Moody’s — have said even if the country raises the debt ceiling and doesn’t default, there’s a strong likelihood that the triple-A bond rating will be cut to double-A unless a budget can be crafted that results in $4 trillion in savings, the result of the massive debt load the country has accumulated in recent years. The nation’s outstanding debt is more than $14 trillion.

A senior banking official told FOX Business that administration officials have provided guidance to them that even though a default is off the table, a downgrade “is a real possibility for no other reason than S&P and Moody’s have to cover (themselves) since they’ve been speaking out on the debt cap so much.”

This guidance is a big reason why Wall Street has largely dismissed the possibility of default, and though the markets have been jittery amid the talk of default, they haven’t imploded as would be the case, many economists fear, if the nation missed a payment on its debt.

The banking official said the administration understands that if there were to be a default, it would likely spark another financial crisis.

“They also know they can pay the debt with cash on hand,” this official told FOX Business. The Treasury collects around $2 trillion in tax revenues, and is scheduled to pay out $200 billion in interest to bond holders. In order to meet its obligations to contractors, social security recipients and others, the administration would have to raise another $1 trillion either through cuts, higher tax revenues, the issuance of debt or a combination of all three.

Congressional Republicans believe that the Administration is raising the possibility of a default as a way to ramp up pressure on Republicans to agree to a budget deal that includes tax increases, which they oppose.

A Treasury spokesman said that “when we exhaust our borrowing authority, as we will on August 2nd, there is no way to guarantee that we will be able to pay all of our bills. Any suggestion to the contrary is simply false.”

Even without a default, banks expect some market turbulence if the triple-A sovereign-debt rating is cut, sources tell FOX Business. While bank officials do not believe there will be a “catastrophic” effect to a downgrade, that’s not to say there won’t be negative ripple effects, notably to bond deals and derivatives priced off triple-A-rated  Treasurys.

So Obama was privately trying to say one thing to the bondholders to reassure them while publicly saying the exact opposite thing to fearmonger the crisis.

Does it make you feel better to know that Barack Obama is not a profoundly stupid man, or does it make you feel worse to know that he is so dishonest and so cynical that he would actually deliberately fearmonger his nation – and push credit agencies to seriously consider downgrading U.S. credit given the president of the United States’ own constant warnings that the U.S. would default on its debt – in order to push his rabidly leftist agenda???

Here’s Obama’s tax-cheating Treasury Secretary Timothy Geithner predicting the US would default on its debt while ideologically trying to demonize Republicans for said default:

“Speaking to a New York audience, Geithner said that Republicans would bear responsibility for the first debt default in the nation’s history if they insist they will not vote for an increase in the $14.3 billion borrowing limit unless they win approval of a House Republican budget plan.

“If Republicans try to impose that plan on this country as a condition for raising the debt limit, then they will own the responsibility for the first default in our history, with devastating consequences,” Geithner said in a speech to the Harvard Club of New York” (by Pallavi Gogoi in the Associated Press, 5/18/2011)

Here’s the SAME tax-cheating Obama Treasury Secretary Timothy Geithner assuring that the US would NOT default on the debt due to Republicans, as he had falsely claimed would happen:

“It’s not going to happen,” Geithner predicted, amid a warning from US ally Britain that “right-wing nutters” were posing a bigger threat to the world economy than the eurozone crisis.

And now let me return to a statement from the credit agencies that is highly illustrative:

A senior banking official told FOX Business that administration officials have  provided guidance to them that even though a default is off the table, a  downgrade “is a real possibility for no other reason than S&P and Moody’s  have to cover (themselves) since they’ve been speaking out on the debt cap so  much.”

So why are the credit rating agencies seriously considering downgrading American credit?  Because they “have to cover themselves since they’ve [that's Barack Obama, Timothy Geithner and numerous Democrats] have been speaking out on the debt cap so much”

The sheer cynical depravity of Barack Obama and his administration and his entire Democrat Party is simply beyond astonishing.

Who are the people who are most playing with fire?  Republicans have been saying PUBLICLY the truth even as Barack Obama and his top officials repeatedly lied and fearmongered and demonized.  And the credit agencies had to listen to Barack Obama’s public lies and take what he was saying into account.

If America’s credit rating is downgraded – which is actually now likely – Obama will demonize Republicans for it.  But OBAMA WILL BE THE REASON.  HIS REPEATED PUBLIC STATEMENTS, ALONG WITH THE STATEMENTS OF HIS TOP OFFICIALS LIKE TIMOTHY GEITHNER, WILL HAVE FORCED THE RATING AGENCIES’ HANDS.

During the 1995 budget battle, the debt ceiling was not raised for something like five months, and there was no serious talk of reducing America’s credit worthiness.  Why?  Because Bill Clinton did not resort to the despicable degree of fearmongering that Obama has.

What should Obama have been telling the world?  That no matter what happened, the US could and would continue to pay its primary obligations and that there would be no default under any circumstances.

But what are we getting?  Here’s an example from the White House Communications Director on July 26:

WH Communications Director Dan Pfeiffer: “We are seven days away from an unprecedented financial event in this country’s history. One that could potentially put us towards a depression because the House Republicans, led by Speaker Boehner, are unwilling to compromise one inch.”

Pfeiffer spoke to CBS News Radio on Tuesday morning.

Because of dishonest fearmongering like this, the credit agencies are duty-bound to downgrade our credit rating.  If you were a credit evaluator, wouldn’t YOU listen to such official pronouncements of doom?

I’m sure I’ll be quoting myself in the months ahead.  But if – or more likely when – the United States AAA credit rating is downgraded, it will ALL be on Barack Hussein Obama.   HE is the president, and HE is the one who made all the false and demagogic and fearmongering statements that lenders repeatedly heard him make.

I’ll also point out one final fact: Barack Obama’s presidency has been an abject failure.  He took a bad situation and he made it far, FAR worse.  He has nothing – NOTHING! – to run on but demonization of his opponents.  On my view, Obama is literally hoping for the very worst outcome for America so he can blame Republicans for it with yet more lies and more demonization and more fearmongering.  Because that’s pretty much his only hope of getting re-elected.

Pravda Takes A Look At The New Marxist America – And Laughs Hysterically

October 22, 2009

This piece that appeared in the Russian and formerly communist Pravda is worth a read:

The American Self Immolation, Truly a Sight to See

19.10.2009      Source: Pravda.Ru

As my readers know, I am a fan of economics and of history, as well as politics, a combination that forms some very interesting cycles to research, discuss and argue on. None is so interesting than the death of great nations, for here there is always the self destruction that comes before the final breakups and invasions. As they say: Rome did not fall to the barbarians, all they did was kick in the rotting gates.

It can be safely said, that the last time a great nation destroyed itself through its own hubris and economic folly was the early Soviet Union (though in the end the late Soviet Union still died by the economic hand). Now we get the opportunity to watch the Americans do the exact same thing to themselves. The most amazing thing of course, is that they are just repeating the failed mistakes of the past. One would expect their fellow travelers in suicide, the British, to have spoken up by now, but unfortunately for the British, their education system is now even more of a joke than that of the Americans.

While taking a small breather from mouthing the never ending propaganda of recovery, never mind that every real indicator is pointing to death and destruction, the American Marxists have noticed that the French and Germans are out of recession and that Russia and Italy are heading out at a good clip themselves. Of course these facts have been wrapped up into their mind boggling non stop chant of “recovery” and hope-change-zombification. What is ignored, of course, is that we and the other three great nations all cut our taxes, cut our spending, made life easy for small business…in other words: the exact opposite of the Anglo-Sphere.

That brings us to Cap and Trade. Never in the history of humanity has a more idiotic plan been put forward and sold with bigger lies. Energy is the key stone to any and every economy, be it man power, animal power, wood or coal or nuclear. How else does one power industry that makes human life better (unless of course its making the bombs that end that human life, but that’s a different topic). Never in history, with the exception of the Japanese self imposed isolation in the 1600s, did a government actively force its people away from economic activity and industry.

Even the Soviets never created such idiocy. The great famine of the late 1920s was caused by quite the opposite, as the Soviets collectivized farms to force peasants off of their land and into the big new factories. Of course this had disastrous results. So one must ask, are the powers that be in Washington and London degenerates or satanically evil? Where is the opposition? Where are the Republicans in America and Tories in England?

The unfortunate truth here is: the Republicans and Tories are the Mensheviks to the Democrat and Labour Bolsheviks. In other words, they are the slightly less radical fellow travellers who are to stupid to realize that once their usefulness is done, they will go the very camps they will help send the true opposition to. A more deserving lot was rarely born. Of course half of the useful idiots in the Bolshevik groupings will go to those very same camps.

One express idiocy of Cap and Trade in America will be the approximately additional $.19 per liter of gasoline, which is a rather very large increase in taxation, however indirectly. Of course this will not only hit the American working serfs in the pocket at fuel up, but will hit them in everything they buy and do, as America has almost no real rail to even partially off set the cost of transporting goods.

But how will this work itself out? Very simple and the chain of events has been worked out often enough.

First, the serfs will start to scream at the cost of fueling up and the cost of all their goods. The government, ever anxious not to take responsibility, will single out the petroleum factories and oil companies for gauging the people. They will make demands for them to cut prices, which of course means working for a loss. When plants start to close down or move overseas, they will be called racketeers and saboteurs. Their facilities will be nationalized so that the government can show them how to do things properly. Shortages will follow as will show trials and that’s as long as the USD holds up and foreign nations are still willing to sell oil and gasoline for other than gold, silver and other hard resources.

When food goes up, and it surely will, as the diesel the farmer uses goes up as well as his fertilizers, the government will scream that the farmers are hording, thus undermining the efforts of the enlightened. There will be confiscations of all feed crops while the farmers will get production quotas to meet or have their land nationalized again. Do not believe me? Look at the people running your governments and ask yourself: would they rather take some one’s land or admit that they screwed up and ruined everything? After a point, only the corporate farms will remain, food by oligarch, just a like the factory farms. There will be plenty of dissidents to work them.

This will of course spread from industry to industry and within a rather short order, you will be living the new fractional dream, that is a fraction of what you have now. But on the bright side, for once, your children, working for government/oligarch run joint ventures, will be able to compete adequately with the Chinese, to feed the demands of Europe and Latin America. But that will take at least a generation or two first along with a cultural revolution or two.

The article points out that European countries such as France, Germany, and Italy are exiting their recessions.  And its true.  They’ve pulled out of the downturn.

It’s also true that Europe rejected their failed liberal and socialist policies in a huge sweeping wave of conservatism to set up the above.

Where has our messiah led us?

Obama’s massive deficits – larger in just 9 months than George Bush accumulated his entire 8 years in office – dwarf anything seen since World War II.  That’s real bad, because during WWII, the United States had a manufacturing base that dwarfs what we have today, and it was Americans rather than Chinese who held that debt.  Furthermore, our WWII debt was temporary, and we quickly reduced it, whereas out current debt is skyrocketing faster and faster and faster, with no end in sight.  By 2019, we will be paying more than $800 billion a year just in interest payments.

Unemployment has increased from 7.4% to 9.8% under Obama.  And if we consider the U-6 rate measuring total unemployed as a percentage of the civilian labor force (which was how unemployment was calculated until the Clinton administration changed it in 1994), we’re actually at 17% unemployment.  And it isn’t over yet.  Respected analyst Meredith Whitney – who  nailed the prediction of the 2009 credit crash – sees unemployment rising to 13% (which would be 22.5% by the U-6 rate):

Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering government efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.

The United States is lagging behind other countries in high and rising unemployment.  Why is that?

Our dollar is in crisis.  Moody’s today warned that our AAA credit rating is in jeopardy unless we abandon massive deficit spending ways that Obama clearly has absolutely no intention of abandoning.  And many of the key countries on the planet are planning to cut the U.S. dollar out of the economic future, which will dramatically undermine U.S. influence and power.

As a result of the fact that Obama – in spite of all his massive spending – failed to deal with the mortgage crisis at the heart of the economic crash, we are about to see yet another huge wave of mortgage defaults.  And we’re just now truly beginning to see a horrifying emptying of our office space.

In spite of the media’s determination that everything is really getting better and better, we somehow just keep getting hit with “unexpected” bad economic news.  Go figure.

I suppose we can view the mainstream media propaganda as helpful: at least they’re supplying us with a blindfold while we hurtle headlong toward the cliffs.


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