AUGUST 22, 2011
BRUCE A. BRENNAN BLOG FROM THE WORLD AND MY MIND
The news as I see it and the views as I want them.
August 22 is … Be An Angel Day
The world, helped by a strong nudge from the United States, has another black hole to watch deteriorate. Libya is now leaderless. Like Egypt and Ethiopia before it, nothing will change for the better. Syria and Yemen are close behind and will fall into a leaderless bog shortly. Iran is going to be the leading power in the Middle East and the United States will have caused it. Be careful what you pray for, you might just get it. We need to learn not everyone wants to be like the United States, except for the living of the backs of the wealthy part.
Who the hell is steering this boat? First S & P downgrades the United States government credit rating for no intelligent reason. S & P made a multi-billion dollar mistake in its calculations but when told of the mistake, which they acknowledge making, downgraded the credit rating anyway. They did not even recalculate the formula they used in the first instance. Then it is leaked that the government is investigating S & P over its involvement in the collapse of worldwide economic markets. Now S & P threatens downgrade city and state credit ratings.
Standard and Poor's decision to downgrade the United States' sovereign credit rating has already sent shock waves through the stock market and worsened fears of a double-dip recession. But for local and state governments, the worst may be yet to come.
State and local governments are likely to face credit downgrades following a finalization of the U.S. budget, Standard and Poor's said in a report Thursday.
The threat to governments at the state and local level is only the latest shot fired in an ongoing battle between the public sector and S&P and the other major rating agencies. Earlier this month, Standard & Poor's became the first agency in history to lower the nation's sovereign debt rating to AA+, one notch below a perfect triple-A. Then, following two weeks of unpredictable market volatility, it was reported that the Justice Department was going ahead with a probe into the agency's activities in the years preceding the financial crisis, particularly its habit of endorsing mortgage securities that later turned out to be toxic. S&P and the rating agencies Moody's and Fitch are believed to have played an instrumental role in setting up the conditions for the financial panic of 2008.
Despite a growing number of people calling the credibility of these agencies into question, S&P warned this week that it's considering further revisions to governments below the national level. While the the U.S. Budget Control Act of 2011 already includes at least $2.1 trillion in deficit reductions over the next decade, further cuts to be determined by a bipartisan "super committee" by late November will largely inform S&P's decisions over which state and local governments do or don't get downgraded.
Credit ratings vary by state, and "differing levels of reliance on federal funding, and varying management capabilities” will play a significant role in determining which ratings change, S&P says.
"In our opinion, the longer-term deficit reduction framework adopted as part of the Budget Control Act of 2011 (BCA) could undermine the already fragile economic recovery and complicate aspects of state and local government fiscal management," Gabriel Petek, an S&P analyst, said in a statement.
Already this year, S&P has revised the credit ratings for several state governments. Six states have received upgrades, including South Dakota and Wyoming, while New Jersey and Nevada have both had their ratings lowered. Meanwhile, many counties and municipalities have also fared poorly, experiencing "super-downgrades," a fall of three or more notches on the rating scale. Manassas Park, Va., for example, was downgraded a full five notches on Standard and Poor's scale, from AA- to BBB, due to "significant and rapid deteriorations of the city's financial position," the WSJ reports. Despite the grim outlook, S&P says that since budget cuts would not take effect until 2013, state and local governments have time "to implement budget adjustments that, in our view, could prove important in the maintenance of their credit quality." Likewise, the agency said that it was possible that the highest-rated local and state governments could maintain their AAA rating.
S & P better hire an army of lawyers. Every state, city, town, county and country they downgrade will be suing them. S & P will not exist in 18 months and no one will care or notice.
Karl Rove thinks Sarah Palin will get in the Republican race for the Presidential nomination within ten days. She and Michelle Bachmann will cancel each other out, leaving an opening for Paul Ryan or Chris Christie; stay tuned. Christie likely dampened his chances when he acknowledged over the week-end that climate change is real and a problem. That is not playing to the Republican, business base.
Just a couple of thoughts I had and you should too or at least think about.
BRUCE A. BRENNAN
DEKALB, IL 60115
COPYRIGHT 2011
VISIT ANY OF THE SITES LISTED FOR REVIEW, RESEARCH, ORDERING MY WRITING PRODUCTS OR TO CONTACT ME.
Email: brucebrennanlaw@aol.com
Go to web sites below to buy books by Bruce A. Brennan. It is still a good time to purchase any of my books. The books are interesting and inexpensive reads. My third book should be available later this year, in late 2011. More information will be forthcoming.
www.ebookmall.com (Do search by my name or book Title)
www.barnesandnoble.com (do a quick search, Title, my name)
www.smashwords.com Do a Title or author search.
Book Titles:
Holmes the Ripper
A Revengeful Mix of Short Fiction
"Chance favors the prepared mind." - Louis Pasteur
No comments:
Post a Comment