yoda Posted August 9, 2011 Posted August 9, 2011 Maybe I should grow a sense of humour? :(( Might take some time to get used to the lingo Nah, you just need to grow a sense of "what to ignore from which posters". :winky:
Texy Posted August 9, 2011 Posted August 9, 2011 fighting 2 wars is taking a heavy toll on us along w/ wasteful spending and overinflated contracts and incredible corruption. We gotta pull out of both countries and focus on rebuilding this country.
Alchemist Posted August 9, 2011 Posted August 9, 2011 Why are people solely pointing towards the govt. ? What about people who started living outside their means ? "Aamdani ath anni, kharcha rupaiyah". Why do a house hold of 2 people need 3 cars ? Why do a couple with 2 kids need a 5 bedroom house which they cannot afford ? You go around the town and all you see is, People who blame the govt, for them not having enough money in their savings. Where as they have all the latest cell phones, tablets, they want new shoes every week, new clothes every week. I think this is a bigger problem. There is greed at every level which is adding to the problem. May be people need to look at themselves and see if a change is needed in their own house.
rahuliverpool Posted August 9, 2011 Posted August 9, 2011 Doc, while I am not naive to not understand the implications of this, I don't see what the big deal is about. This is the same rating agency that made billions by giving a AAA rating to the disastrous subprime loans, CDO's and credit default swaps in '07 and said that this was just their 'opinion' so why not consider this again as, just their opinion? Please feel free to correct me if I am wrong, this is a 22 year old talking!
bihutoli Posted August 9, 2011 Posted August 9, 2011 Doc' date=' while I am not naive to not understand the implications of this, I don't see what the big deal is about. This is the same rating agency that made billions by giving a AAA rating to the disastrous subprime loans, CDO's and credit default swaps in '07 and said that this was just their 'opinion' so why not consider this again as, just their opinion? Please feel free to correct me if I am wrong, this is a 22 year old talking![/quote'] Well credit ratings are of course opinions of the agencies about the credit worthiness of a issuer or an issue. However the market takes these opinions seriously. Hence downgrading the US government credit ratings negatively impacts the price of treasury bonds thus making it more expensive for the US to borrow. And borrow they must since they are running a deficit. Thus raising the probability of the US defaulting on its debts. I don't think a blanket statement like the rating agencies giving AAA ratings to subprime loans etc is correct. These loans were structured in such ways some of the securities thus created may have deserved AAA ratings. Also in this case I think S&P has done the correct thing surprised it took them so long to do so, and why Moody's and Fitch are waiting for.
Guest Gunner Posted August 9, 2011 Posted August 9, 2011 Doc' date=' while I am not naive to not understand the implications of this, I don't see what the big deal is about. This is the same rating agency that made billions by giving a AAA rating to the disastrous subprime loans, CDO's and credit default swaps in '07 and said that this was just their 'opinion' so why not consider this again as, just their opinion? Please feel free to correct me if I am wrong, this is a 22 year old talking![/quote'] You are correct. Other than the ego factor, this downgrade has zero medium term impact. This has happened before to countries like Belgium with no major concern. Also bear in mind the two other major rating agencies have the US at AAA, it is not a unanimous downgrade.
rahuliverpool Posted August 9, 2011 Posted August 9, 2011 Well credit ratings are of course opinions of the agencies about the credit worthiness of a issuer or an issue. However the market takes these opinions seriously. Hence downgrading the US government credit ratings negatively impacts the price of treasury bonds thus making it more expensive for the US to borrow. And borrow they must since they are running a deficit. Thus raising the probability of the US defaulting on its debts. I don't think a blanket statement like the rating agencies giving AAA ratings to subprime loans etc is correct. These loans were structured in such ways some of the securities thus created may have deserved AAA ratings. Also in this case I think S&P has done the correct thing surprised it took them so long to do so, and why Moody's and Fitch are waiting for. Exactly, my point. This should have been done way back. Do you really think some of the securities may have deserved AAA ratings? Dunno, I mean, hundreds of billions of dollars were being rated and these were all very risky securities.
rahuliverpool Posted August 9, 2011 Posted August 9, 2011 You are correct. Other than the ego factor' date=' this downgrade has zero medium term impact. This has happened before to countries like Belgium with no major concern. Also bear in mind the two other major rating agencies have the US at AAA, it is not a unanimous downgrade.[/quote'] Fair point. It isn't a unanimous downgrade. Heck, we share a BBB- with Portugal :hehe:
bihutoli Posted August 9, 2011 Posted August 9, 2011 Exactly' date=' my point. This should have been done way back. Do you really think some of the securities may have deserved AAA ratings? Dunno, I mean, hundreds of billions of dollars were being rated and these were all very risky securities.[/quote'] IMHO I don't know if they deserved AAA ratings, but the way they were structured some of the tranches created had much higher chances of getting paid back no matter how risky the underlying loans.
Dhondy Posted August 9, 2011 Author Posted August 9, 2011 KR is spot on. If you want to look at the role of manufacturing, look no further than Germany & UK. The former has lost 2 great wars, been through hyperinflation and has taken on an ailing, communist ravaged state and turned it into an economic miracle. Its strength lies in manufacturing, it wears the crown of the biggest exporter nation lightly. And UK? Need I say more? A pale imitation of the US model. What great strengths have been squandered by the shortsightedness of decision makers and fecklessness of the client state!
yoda Posted August 9, 2011 Posted August 9, 2011 You are correct. Other than the ego factor' date=' this downgrade has zero medium term impact.[/quote'] There are interest rate impacts, rates of those which are tied to US treasury, which is expected to go up as a direct result of the downgrade. I am not sure if that is only if all 3 agencies downgrade or even with just 1 downgrade. Ofc we all know that world markets have corrected majorly right after this downgrade, so to say there is zero medium term impact is incorrect.
Jersey #10 Posted August 9, 2011 Posted August 9, 2011 What are you guys buying btw? or what did you buy yesterday? buying y'day and selling today would have been a golden short term chance. I couldn't buy what i was trying to buy. It took forever for the transfer to take place between my bank and brokerage
Guest Gunner Posted August 9, 2011 Posted August 9, 2011 There are interest rate impacts' date=' rates of those which are tied to US treasury, which is expected to go up as a direct result of the downgrade. I am not sure if that is only if all 3 agencies downgrade or even with just 1 downgrade. Ofc we all know that world markets have corrected majorly right after this downgrade, so to say there is zero medium term impact is incorrect.[/quote'] Medium term is 3-6 months. What is happening is just short term scaremongering, it will stabilize rapidly. The interest rates won't move much for the US, this downgrade is fairly contentious to say the least and is not unanimous among all the rating agencies. So when I say it has little impact I mean in the medium term. Further like i pointed out earlier it has happened before with the Belgian government etc with relatively little impact.
Blue Panther Posted August 9, 2011 Posted August 9, 2011 All the experienced share holders will buy more shares at this time.
bulbul Posted August 9, 2011 Posted August 9, 2011 may be in short term the shares bounce back...but I ma not sure about Long term...if one of the big euro countries failed like Italy or Spain it will create bigger issues (Greece/Ireland doesn't matter as these are small countries Euro zone can sacrifice them). Most interesting thing now is to see moves of China as majority of it's forign reserves are infested in US debt... as for discussion regarding manufacturing - I believe Manufacturing is most important thing as it provides jobs to less educated and less skilled people also..unlike IT or Commerce sector... even though it's not manufacturing Textile sector is one of the biggest sector in India with more than 3 crore people working on it...majority of the people are Poor women..who can earn at least 3000 pm initially..they leant dream this kind of money otherwise.
Lurker Posted August 9, 2011 Posted August 9, 2011 may be in short term the shares bounce back...but I ma not sure about Long term...if one of the big euro countries failed like Italy or Spain it will create bigger issues (Greece/Ireland doesn't matter as these are small countries Euro zone can sacrifice them). Most interesting thing now is to see moves of China as majority of it's forign reserves are infested in US debt... as for discussion regarding manufacturing - I believe Manufacturing is most important thing as it provides jobs to less educated and less skilled people also..unlike IT or Commerce sector... even though it's not manufacturing Textile sector is one of the biggest sector in India with more than 3 crore people working on it...majority of the people are Poor women..who can earn at least 3000 pm initially..they leant dream this kind of money otherwise. Liked the post. Liked your nickname even more :haha:
bulbul Posted August 9, 2011 Posted August 9, 2011 Me thinks US will bounce back. If Obama wants to win next years election...! but I don't know whether Republicans have good candidate against him... * if he wins again he owes big time to Osama....
kumble_rocks Posted August 9, 2011 Posted August 9, 2011 KR, MM here, Howdy! :--D I am sorry but I donÃÕ think I agree with you here. The most valuable capital you can possibly own is not the ability to make things, but intellectual capital. Anybody can make cheap washing machines and DVD players, but its only the select few who have the ability and to create intellectual capital. And the US and other Western countries, with all their hi-tech labs and tons of PhDs and masters students who work in them, are best positioned to create this capital, not just today, but for decades to come. Think of it KR the US has been in debt for over 60 years now. Debt isnÃÕ something new to them. The problem now is that their borrowing is outpacing their ability to pay back their interest. They committed too much to social security, unemployment benefit and spent trillions on useless wars. The point I am trying to make here is it is possible to have a strong currency and yet be prosperous. This idea that if you have weak currency, you will be able to make things that can then be sold to other countries, is I think flawed. Hey MM, Been very busy , no time to post much , but do browse this site for my cricketing news. Still feel intellecual capital is overrated. Need to have more brick and mortar companies. Btw, did u move to SAP ?
kumble_rocks Posted August 9, 2011 Posted August 9, 2011 @cricaddict , I do support few libertarian ideas, not the whole enchillada. Don't agree with Ron Paul on so of the regaulartory issues , Need to have proper oversight . I do support health care bill because what we have now is a sham.
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