iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,227 Blog Posts

The S&P Downgrade is a Non-Event

So let me get this straight, they made a FUCKINGTWOTRILLIONDOLLAR error in their calculations, yet said “fuck it, we’re going in anyway” with a credit downgrade of the United States? Their main reasoning is political instability? Well, fuck you very much S&P. Would you prefer we have a dictatorship or authoritarian regime like China or Venezuela?

While it’s true our Congressmen acted like fucking morons, they still got the job done by the deadline. This is the same company who rubber stamped all of the CDO’s AAA, leading up to and causing the credit crisis. An argument can be made that the ratings agencies were key actors in bringing down the U.S. economy. Don’t tell me they didn’t know what they were doing. Now, after they helped cause joblessness, fuckery and pain, they downgrade US.

Excuse me for sounding cynical, but they should be held accountable for their errors and for stripping us of our AAA rating.

While you might say “well, Fly, we’re spending too much and we borrow too much. We don’t deserve AAA.” We do, AND MORE.

Look you, we print our own money and owe nothing in other currencies. Theoretically, we could print a few trilly tomorrow, buy China’s treasury holdings from them, then tell them to fuck off. As long as we are the reserve currency of the world and have the ability to create more dollars, our credit rating cannot be negotiated. It is AAA, or whatever the fuck you want to label it. How about A1, like the steak sauce?

The ripple effects might spook people a little, as the cock-gobblers from S&P start downgrading U.S. munis and agencies who rely on the government.

All in all, in my opinion, it is a NON-EVENT.

The real story is still in Europe. Don’t let this downgrade shit distract you. The ECB needs to start monetizing their debt now, else world markets will continue to slide. Providing a deal is announced by Sunday, I expect a patriotic “fuck you S&P” rally on Monday.

It’s the American way.

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158 comments

  1. jworthy

    Amazing. There is going to be blood on that rusty machete.

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    • Hovis

      At first I thought you had typed “rusty mustache.” Fly, you must begin using the phrase “rusty mustache” post haste.

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  2. pedro

    a trilli a trilli a trilli, im a young money trillionaire, tougher than nigerian hair..

    Love the idea of a Patriotic, FUCK YOU rally.

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  3. Testicules

    and the debt summit G20 meeting is what?….no not being a smart-ass….I agree for the most part of what you are saying…problem is lack of real leadership….the wolves are gathering here

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    • The Fly

      I disagree. The wolves are in Europe. Our rates are practically zero. People love our debt.

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      • weirdo jay

        I agree and disagree. They don’t “love” our debt but they don’t really have another choice. They fear we will not ALWAYS be the reserve currency hence the price action in gold, but the corps and central banks with tens, hundreds of billions and even trillions that largely create the demand, don’t have another place that is as large and as liquid to move so they buy the shit out of treasuries, and load up on gold every now and then.

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        • weirdo jay

          But by their direct action and willingness to purchase bonds, yes they effectively love our debt. I agree with your post but I am not entirely confident how the market will react. Theoretically it should be bearish for US bonds not stocks, and possibly a shift from treasuries to stocks, and globally a shift away from US markets if the ratings agency meant anything to anyone, afterall corperations connected with US treasuries and holding debt as well as the “oh nooos the government might not pay me back” could spark a rally in the global stocks and a transfer into international stocks.

          but in reality there may be increased volatility as people aren’t sure what the fuck is going on and there could be a “risk off” trade as Roubini says in that great video in the news feed, or they could say “oh fucks, hyperinflations is comings” But how many people really give a fuck about what the rating agency think after subprime AAA+?

          In terms of how “mom and pops 401k” will react, I have to bet they will sell the news and say “oh shit get me out now” and in IRAs they will say “oh shit sell at the market” which in my view will present a buying opportunity at least for the time being. For this reason I would bet on the upside, especially with oversold shit we are in, but occasionally the markets do whatever the fuck they want just to spite “rational”.

          Then again there’s a lot of financial news that has been saying “”it’s going to be okay” and the Krugmans of the world are saying “nothing to see here, ignore the men behind the curtains”. At any rate, Monday will be the day of reaction and everyone that is going to react to that news will have reacted. It will be an emotional “get me out now” by all the retail investors to create the low for the institutions that knew or suspected the downgrades were coming to load up.

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    • WTF

      G20 is meeting for political purposes. Having the reserve status currency has many, many tangible with it. What the Rat Pack will try to do is to create some sort of an alternative reserve currency. This political scene-stealing has already begun with Trichet’s and Chinese comments. Reality is that every currency bill is just a promissory note which is covered by the available economic resources. So far there’s no country in the world having better economic assets than the US. Hence no real alternative to the reserve status of its currency. G20 can be dismissed.

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  4. PASS THE A1

    These s and peas are bland.

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  5. JTU

    Agreed! We might see a huge sell off first thing in the morning and then a sharp reversal. I hope so because I plan on dumping some shorts that I have and adding some stocks at this level.

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  6. ed

    get ’em fly, rip their heads off and punt them down a particularly long hallway

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  7. mtp

    we may get a rally… a nice 50-60 point rally in next week… if it does get back to S&P 1260 GO SHORT… does anybody remember how to go short anymore? how soon we forget 2008.. the brainwshing has worked again.

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  8. Trading_Nymph

    Ah the barely bear Mortal Kombat Nymph and her little US Dollar is getting ready for battle. Not just the Clam next week…but the G-7 Gang that is meeting to try and fix europe, etc….the Clam had his power taken away a couple of months ago with a rise in NFP and Core CPI when we battled. The NFP numbers on Friday kept his powers weak. But now We do battle with 7 warriors that are coming at us with sharp swords of liquidity. Be strong little dollar…this is going to be one heck of a Battle.

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  9. The Fly

    If we didn’t have this European crisis, everyone would be pointing to the BETTER THAN EXPECTED US jobs number.

    Anyone home?

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    • Mike Kerr

      Fly,

      Yesterday you hinted the job’s number was fixed as to not spoke the already fragile market.

      I know of not a single person who has landed a solid new job in ages, but I do know of three people on extended unemployment that are about to run out of elgibility. The entire focus of the Prez and Congress for the last 24 months was to allow Wall Street to convert their equity holdings to other assetts. Now, as always, the middle class of America is the bagholder of the equities. Measure a rise in the S&P 500 to the Swiss currency and you will see very little gain over the last 2 years. The American people has been hoodwinked once again, as the Wall Street bankers have exited and converted their equities to foreign assetts and gold.

      The fat lady hasn’t song on the USA, but she is on standby. A true economic plan needs to be executed and done within the next 90 days. One needs to be a 95% tax on stock gains held under 10 years, and zero tax on gains held over 10 years. Quit making turning a trick the key to making money; instead, make long term success of publically held corporations the key driver to the restablishment of the USA economy.

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      • 401ker

        So if I buy a stock, I’m obligated to hold it for 10 years otherwise risk it all for a 5% gain? That makes no sense. I would give up at that point and put my cash in a matress.

        It’s not the stock owners, it’s the CEO’s and execs who make all their money off their bonuses. All short term “profits” over the last year. If all US companies just cut their R&D, they can save a butload of money now, but will be in deep shit in 5-10 years when they have no products.

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      • go2mars

        If the get off the pogi, they are no longer technically unemployed. Are they?

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    • Trading_Nymph

      The Better than expected job numbers is a Fed Focus to not to act but wait. Last week the Global Markets finally got the hint that Australia, Swiss, Japan, Europe were not going to raise rates when their central banks had rate meetings.That resulted in a unwind of the Carry Trade..Look how the AUD/USD has rolled over since the slightly dovish statements from the RBA. So much of the Italy Crisis, US Debt Crisis, etc crisis is just noise imho. BOTTOMLIINE The higher interest rates in Australia, etc is killing their non mining export biz and they just can’t keep raising and letting the carry trade continue. This is the Super Ugly Bubble that I have watched formed for over 2 1/2 years…it SHOULD have popped in the Summer of 2010 but the Claim with QE2 stopped that and ripped off my Bear Face…now, he doesn’t have the power imho and the bubble is even uglier now…So I sit in my Faz Mobile and just enjoy the ride down…

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  10. wilmer

    We have plenty of spare Tomahawks laying around that say otherwise S&P…..

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  11. Wilco

    Dollars are federal reserve notes, quarters on the other hand come straight from the US mint…We could pay off all our debt with quarters .

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    • The Fly

      We can pay the Chinese in nickles.

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    • asshole bob

      we could issue 2 balls of steal and denominate them in 10 trillion dollar denominations while telling the federal reserve as well as the chinese and anyone we owe money to, to kiss our ass.

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  12. Dishobgyn

    The market knew about the downgrade. When senate passed the debt ceiling the market began to tank. It was nomystery that s&p will downgrade US. They even said it. Now what happened on thursday was a systematic deflation ofthe market in an orderly, fuck you, fashion to avoid a black monday or another flash crash. The fed is not going to let trillions of dollars of cash infusion to inflate the economy to go to waste over a retarded down grade by the most fucked up people on the planet, s&p.

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    • Never Enough

      I agree with Dishobgyn, thye sold the rumor on the downgrade and now it is reality. On to the next bag of bullshit.
      Naturally the Wall Street boys knew the downgrade was coming, however they drove the Treasury Bond futures up 3 points in 1.5 days to screw the shorts and then reload their shorts.
      Expect the unexpected and never trust any one on Wall Street for informatin, because they are on the other side of the trade. What they do never makes sense at first, but that is part of the master plan to take your money. It still is a dollar for dollar war out there. You have to lose so they can WIN.

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  13. Johnny2time

    This is all posturing by the Germans and there’s no way they would let a full on meltdown happen. This is just like the debt ceiling negotiations, they will come to an agreement in the 11th hour.

    This has all played out a thousand times before and betting that “this time it will be different” is a foolish bet.

    When the situation stabilizes the market will as well…and who knows, we might even rally.

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  14. Juiceyfruit

    I’m hoping for yet another selloff. I wouldn’t mind buying a trillion shrinking dollars worth of SPY calls.

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  15. JohnN

    Oh the irony,
    if Obama had actually done what he promised and went after these crooks, they wouldn’t even be around today to be destroying any chance he has of re-election.

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    • ruggyup

      The best part of your comment is the last seven words! Be still my beating heart, let it be so.

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      • Absolutely right
        Absolutely right

        All of this hope and change is killing my portfolio.

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  16. FIG

    No chance it is a non-event, and you know it. You had a great quote in your last post about the perfect storm, and that is what we are getting. WNR to $10 on Monday.

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    • The Fly

      Now you earned yourself a full ban fig.

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    • WTF

      Yeah, let the asshats sell their WNR, I’ll be happy to add this money-maker for $10. They’ve already HEDGED third of their output for hefty margins. If no serious operational failure occurs it’s gonna be a milking cow.

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      • The Fly

        Hedged at 27

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        • j

          Yes but there’s also an end to the end, don’t forget. It doesn’t go on forever. having said that, it does appear that the spread will continue I hope. Even this week that spread has held on, which is a good pointer and it’s especially good because the oil price took it in the nuts.

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          • j

            oops

            Should read.

            Yes but there’s also an end to the HEDGES,

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          • WTF

            They have hedges for gasoline output up to Q4 2012 (mean hedge 22.85% of capacity), and distillate up to Q4 2013 (mean hedge 30.03%) at weighted-average $14.92 and $27.80 respectively.

            The WTI/Brent spread seems to be a structural/infrastructure anomaly and as such is expected not to be resolved for some more years (arguably). As gasoline share of output was 54% in 2010 (biggest profit-generator) and the hedge is 35.4% highest WNR has potential upside due to higher margins related to the unhedged output.

            The only real non-management threats I see here are disruptions of operations (refining + transportation/distribution) and drop of demand shall the double-dip occur.

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    • Hermes

      Interesting $WNR thought experiment from a few days ago in case you missed it. http://www.fool.com/investing/general/2011/07/30/is-western-refining-a-buffett-stock.aspx

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  17. Johnny2time

    Lest we forget, there’s a lot of new short money that will need to cover.

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  18. david

    http://www.menafn.com/qn_news_story.asp?storyid={7c244af8-bf5b-45bc-99ac-89c438415d24}

    Worth a read, your right , the downgrade is just a sideshow indued.

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  19. montana grzzly

    Need to recognize that the MO is to the downside. Averages broken on all indices. Not just one black swan but a whole flock. Prudence would dictate either cash or short. Why stand in front of this train with your little pecker hang’n out. The continued calls for rallies seems ridiculous at this stage. Wake up I see where we are.

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  20. The Fly

    It’s one thing to be a bearshittr. It’s another to target my holdings with your mindless rhetoric in my house.

    Would you go to someone’s house and talk like this to the host?

    You are no longer welcomed here.

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    • Johnny2time

      I always thought FIG stood for “Fly is God”…

      As a side note I’ve never known anyone who made big money in the stock market by endlessly shadowing someone else trade for trade. I’m hopeful most here already know that.

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    • Chicken Little

      You should never soil someone else’s carpet!

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  21. Hugh Hendry

    I agree, it’s a non-event. Also, FIG.

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  22. bob

    Even if are entering a bear market, a rally to 1270-1280 is very likely. If we go in a bear market, it is not nearly going to be as vicious as the last one and it is more likely going to be a 3 month affair. As crazy as it may sound right now, there is a good chance that we see all time new highs next year.

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  23. shaz

    I’m seeing news outlets reporting that the Saudi market is down 5% on US credit downgrades. Their weekend is 2 days before ours, and their markets are just catching up (today) to last week’s beating that we’ve already been through. Just figured I’d mention this incase anyone was spooked by that news.

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  24. John Travolta

    It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden, http://lnkd.in/9UYQw8

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  25. HesaysShe

    Peter Schiff out now on the downgrade:

    http://www.youtube.com/watch?v=wZhl_uXq73U

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    • shaz

      He makes a lot of sense, and has for a long time. However, sense and reality don’t always jibe.

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    • Yogi & Boo Boo

      Mr. Schiff has had the same story for as he’s been in the public eye. I have a broken antique clock. I keep it in a display case to admire the fine hand work. I don’t use it to tell time.

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  26. Forex

    If /ES goes limit down Sunday night, we will get some major intervention Monday morning and the markets will capitulate in or before the afternoon.

    That’d be the best case scenario for the bulls.

    Otherwise… 1987 all over again?

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    • HesaysShe

      it’s going to be ugly, but not 800 points down or anything.
      but you are probably looking at another 350 points to wash this out. It was common knowledge that there was a greater than 50/50 chance S&P would cut the rating, and the market was going about pricing that in all week. The downgrade is worth maybe a 10% correction on the SPY -but most of that has already been happening.

      The dollar is going to be interesting to watch

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  27. WTF

    On a side note, Fly, do you have anybody of the Analyst Bomber’s caliber in sight? I’m missing his unique take of the buy-sider…

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  28. arizonaborderguard
    arizonaborderguard

    Liquidation of debt MUST occur before any meaningful economic recovery can happen.

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  29. itg

    Wise words from the fly. Unfortunately, the majority of people are fucking stupid.

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  30. logicalthought

    >>While it’s true our Congressmen acted like fucking morons, they still got the job done by the deadline.<>…we print our own money and owe nothing in other currencies… As long as we are the reserve currency of the world and have the ability to create more dollars, our credit rating cannot be negotiated. It is AAA…<<

    The credit rating isn't only about getting paid back in NOMINAL terms; it's also at least partially about getting paid in REAL terms. Paying something off via severely reduced purchasing power (which is what you'd eventually have with additional printing) is essentially just another form of default.

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  31. allcash

    Hope all goes well for everyone. Europe is in for a big surprise when they get back from vacation!

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  32. ckalt

    For a non-event there seems to be a lot of focus on the topic.

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  33. horsetradin

    Senior Tropicana Fly,
    Thank God the time machine just needed a little gas and it was nothing serious. As always, you are much too generous with the Internet leeches. Soo may ways to tell the Reds to “eff-off” to their Pagan God forsaken Hades, including printing, tariffs, whatever.
    Could this be a move to knock the plebes off balance till Tuesday so big boys can take a few more leisure positions before the “tit-rip” QE3 rally to be held Tues? Please advise. Thank you again, sincerely.

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  34. Raise taxes, Cut spending
    Raise taxes, Cut spending

    Regardless of what S&P says, the US is an extremely wealthy country and is more than capable of servicing its debt.

    That said, I wish all those “job creators” would hurry up and start using their 11 years of tax breaks to create some jobs. It would help.

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    • Yogi & Boo Boo

      Do people even read the comments before clicking on down karma? Oh, Oh. Oh I get it, you don’t like the guy’s handle. You are making a political statement, by clicking down. How brave.

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  35. Joshua Gamen

    they didn’t downgrade the debt as bad as it really is. just like they didn’t do with the CDO’s before the housing market crashed. betcha the banks aren’t betting on us treasuries going up..

    http://youtu.be/m4WNGTPG0v8

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  36. theedge111

    Not sure where the market goes On Monday.

    The trend over the next several years will be lower. S&P will be like a noose around the governments neck. They will downgrade us further if the government continues spending money on stupid shit like QE.

    One of the reasons for the downgrade was low interest rates according to CNN.

    I’ll be watching bonds on Monday. That will tell you what the credit market thinks of this and they are way smarter than the bulltards on Wall St.

    They already warned you that stocks were heading lower when yield caved over the past month. The days of the raging bull are over. I might dip into some divi stocks that are cheap but thats about it.

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  37. Colonel von Ryan
    Colonel von Ryan

    Non-event? Never under-estimate the power of the American media, we are clearly entering into a bear market. The eternal optimists will soon learn the hard way…

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  38. dave

    Don’t believe anything they say. This is how they are playing the suckers….
    http://www.youtube.com/watch?v=4DUmoJNQK2o&feature=related

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    • JakeGint

      Some of that Ren & Stimpy shit was pure brilliance.

      ___________

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      • Yogi & Boo Boo

        Nick should be bringing them back for their new retro block. I’m waiting for the classic Kenan Thompson to come back.

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  39. theedge111

    You want an event? Here it is…We’re fucked.

    German Govt: Italy Too Big For EFSF To Save – Spiegel
    German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
    German Govt: Italy Must Make Savings, Reforms To Exit Crisis – Spiegel
    Italy Debt Guarantee Could Raise Doubts Over Germany’s Finances – Spiegel
    German Govt: EFSF Should Only Help Small, Mid-Size Countries – Spiegel

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  40. Damnit

    Let’s just hope that Spiegel is wrong. For some reason I doubt it though.

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  41. the man

    the krauts have said nein, Espana and Italia are going to get shafted. they better take a good vacation cause it might be their last for quite a spell.
    as for those S&P child porn fiends, they should be on a chain gang in the swamps of Louisiana, no offense to Louisiana intended.

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  42. The Fly

    I do not see anything out of Germany that jives with that spiegel shit posted here.

    Link please?

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  43. ruggyup

    I just heard from a guy who says all this downgrade and recession shit is of real concern. He says wives are having sex with their husbands because can no longer afford batteries.

    This comment is ‘up yours’.

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  44. theedge111

    Here ya go FLy…Merkel said no..

    http://66.163.168.225/babelfish/translate_url_content?.intl=us&lp=de_en&trurl=http%3A%2F%2Fwww.spiegel.de%2Fwirtschaft%2Fsoziales%2F0%2C1518%2C778764%2C00.html

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    • j

      Fuck zerohedge. They’re just gay bombthrowers, that’s all. They’re like those scum bag greeks throwing bombs at the parliament because they can no longer retire at 45 on full pension rights.

      Most of those pricks that post and comment at Zero hedge were banking interns that failed to get a job and are just sour at the world.

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  45. The Fly

    Read it. It means nothing. Yes the current mechanism is too small, which is why they need something bigger. Lets see.

    I find it hard to believe the Germans would let things collapse like this.

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  46. Theedge111

    Doesn’t. Look good. I am sure they want to. The problem is they can’t. They need the ECB and it’s unlimited line of create with the USA. It’s their only shot.

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  47. Indeed

    The ECB will print to buy Italian bonds. There is opposition to this move, certainly, and Der Spiegel gives them opportunity to voice their criticism. But it will not matter, because the ECB will print, and the ECB will buy Italian bonds, as long as Berlusconi fast-tracks and front loads austerity measures. Word from Rome is that Berlusconi will comply. I work two hundred meters from the ECB. I know the people there. I know how the game is played. DO not rely on Der Spiegel for you investment decisions. They are giving voice to a minority opposition. That is all. The system needs an Italian bailout and the system gets what it wants. Sorry. Do not look for the “Schroeder NO” to Afghanistan. This is CDU/FDP land Sorry. Deutsche Bank/Commerzbank was not positioned for the recent DAX collapse. They need relief. Berlin and ECB will provide it. Anyone who believes otherwise is living in the sane juvenile idealism of “the right thing.” The ECB will, in the end, just do the wrong thing to save time and sway markets in the direction of the books of the powerful on Europe. It is not right. But: Nobody wants a collapse here. Sorry. Germany/ECB is not NeroHedge. Make the adjustment in your perception and see both sides. Otherwise be disappointed by the cynical, untrue, unidealistic “ways of the world.” (Hegel)

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    • Theedge111

      We’ll know tomorrow. Merkel has caved before. This thing is going right down to the wire. Reminds me of the Lehman weekend in 2008.

      I don’t see how this works longer term. They backed Ireland and Greece and the bond vigilantes still shoved it up their ass. I think they will call this bluff as well. It’s becoming more and more clear that the emperor has no clothes.

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    • j

      Thanks indeed.

      I more or less made a similar comment below. As if the ECB and the elites could turn away fro buying members bonds. It would be like any bank or firm saying they would buy their own stock or bonds because it is too risky.

      Of course they will.

      However the problem that I see is that there is a systemic problem in Europe in that the ECB can of course buy those bonds but it also has to sterilize the transaction so net net there is no increase in the money supply.

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    • alphadawgg

      We’ve seen this movie before.

      The ECB has no choice. They cannot let one bank fail. If one fails, they all eventually fail. This is the ultimate Catch 22. Unlike their U.S. counterparts, Euro banks have more bond principal coming due in the short term than they can get refinancing on. Same story with the sovereign governments in the EU.

      Dow to 5,000. (Sorry)

      …and gold is probably going higher than any of us care to acknowledge.

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      • SUBCOMANDANTE CHINCHILLLLLA!!!
        SUBCOMANDANTE CHINCHILLLLLA!!!

        Six inch Chinchilla trying to sound like six foot Alphadawg:

        A-WHOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!

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        • JakeGint

          That av is some funny schit, Sub-Commandante.

          ________

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          • SUBCOMANDANTE CHINCHILLLLLA!!!
            SUBCOMANDANTE CHINCHILLLLLA!!!

            Not as funny as watching Euro-crats try to save their pensions.

            We’re going to be hearing a lot of “Nein, danke” very soon. A metaphorical night of the long knives is on the way – either that or the Germans just wash their hands of the whole business.

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      • drummerboy

        here here dog

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  48. Jean-Paul

    The gouv. of Quebec will be pumping 200 Millions for a public ice Rink in Quebec city, to gain votes. $250M will be paid by the city itself. $450 Millions in time of crises. They don’t even have a NHL team and won’t have anytime soon. They are like 3 million (only) taxe payers there.

    Do you think it’s just USA that have morons?

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    • JakeGint

      What about the Habs??

      _______

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      • Jean-Paul

        Molson ( your favorite beer lol ) built and paid the Centre Bell in Montreal. So it’s 100% private. And the Bruins beat them 🙂

        Wanna know the joke about the future Quebec Colisée ? Videotron (important cable compagny) will operate it without having spent a penny in the building. They will rent it I think 25M / year. It means that the taxe payers will get only 15% of the profit on all of the venues in the building. Isn’t it enought of a joke??

        You know, it’s not just in USA that stupid things are done with public money.

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        • Jean-Paul

          What am I saying :-O

          The deal of Quebecor/Videotron with the new Colisée is that they rent the buiding for 3M a year… (5M if there is a NHL team in).

          Still 15% of profit to the gouvernments…

          What a deal !

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  49. Bullish

    The s&p downgrade maybe just what this country needed. A common enemy!

    Fuck s&p!

    Progressives and Tea Partiers unite to piss on the heads of the s&p mathematically challenged losers.

    We need to quit arguing with each other and start focusing on making USA the coolest place on Earth again.

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  50. sm

    Does anybody think S&P would have had the balls to downgrade if Hank Paulson was still Treasury Secretary? He would’ve ripped their head off and shit down their throat – and they knew it.

    I hated Geithner at the NY Fed. When AIG went bust the counterparties to AIG trades expected to take a major haircut. Instead he made sure everyone got 100 cents on the dollars because he was gutless and in over his head. The dude is a little dweeb.

    What a fucking horrible pick by Obama. It was applauded by Wall Street at the time because they knew Geithner was spineless.

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  51. Goldie

    I told those fools at S&P to carry the 2…

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  52. Damnit

    If they let Italy go down the crapper, this is nothing like Lehman. Lehman was a private company that was interconnected with other private companies. The “fix” for them going under was government free money to get the system back on its feet.

    This time, if an entire country in Europe goes belly up, there will be no one interested in bailing them out. It will completely unravel the Euro and have huge ramifications across the globe. This would mean the end of the Euro.

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  53. j

    This Monday is goign to be very illuminating. If the stock market starts off in crash mode and then bond prices take off it will more or less prove the SnP decision means shit. So what happens then.

    The Flymeister is right. The blackhole is in Europe and those fucking morons better get their shit together and start buying their own junk.

    This is fucking crazy. They allowed these zombie countries into the Euro and then the central bank won’t buy their bonds? Are they fucking lunatics?

    This is like a bank saying… we’re not going to buy our own bonds because we think they a risky investment and could end up losing money.

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  54. derrr

    oh shit….

    http://www.youtube.com/watch?v=MPd8FOVKHVw
    @18:15
    listen to that shit…

    completely changes my view on the effect this would have. If the reserve requirements change at all (increase at all) it would be deflationary and very bad.
    If not, I’m not concerned. Being that we don’t really know, I will still have to say the “buy the rumor sell the news” (or in this case the reverse) may happen for a relief rally.

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  55. Anton

    Poetically put. Alpha’s contribution a perfect punctuation.

    Well rested after sleeping through the housing bubble you shouldbe prison bitches helped to inflate? Hope the S&Ptards encounter much scrutiny about their role in our problems in the months ahead.

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  56. go2mars

    To add context, Rome was the last country with a global reserve currency that was substantially debased. After Rome debased its currency, there was a little period known as “the dark ages”. It`s the best analogy for the US droppin trills like Jadzia Dax.

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    • Testicules

      “Rome was terminally ill, weakened first by internal corruption and unsustainable spending and then destroyed by the emergence of multipolar contenders for power.”

      WSJ article from Nov 2010
      Are Rome’s Last Days a Distant Mirror for America?

      http://online.wsj.com/article/SB10001424052748704312504575619143718091672.html

      who knows…history does repeat itself

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    • Yogi & Boo Boo

      The wealthy Romans also used to sprinkle lead “sugar” (lead acetate) on their food to show how rich and cool they were. Is this what they’re doing over at the WSJ now?

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  57. hitter

    This has all been played before. Mexico 1982, NYC banks 1989-1990. SE Asia/Russia 1997-1998. I understand that all us small leveraged stock punters want immediate relief but that is not of big league importance in the end. All the $ is paper is in columns. Erasers were invented for something. Unless $ physically goes to the moon it all stays here and if the powers that be want to apply said erasers and change the figures in the sheets they will. Publized chaos is very seldom the case and this to shall pass. As Chess always says – “Do not watch every tick”.

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  58. francesco

    this s&p story sound like the end of s&p agency .
    .. quote from Reuters .. : A number of Wall Street analysts have reacted to the historic downgrade of the U.S. AAA rating on Friday evening with a shrug. Some argue the ratings firm’s warnings about the U.S. debt deal offered an early signal, while others dismissed the action, questioning the company’s record of giving AAA ratings to housing assets that turned out to be toxic.

    Vassili Serbriakov, currency strategist at Wells Fargo in New York, said:

    It’s not entirely unexpected. I believe it has already been partly priced into the dollar. We expect some further pressure on the U.S. dollar, but a sharp sell-off is in our view unlikely.

    Paul Dales, chief U.S. economist at Capital Economics in Toronto:

    I don’t think it will mean too much to be honest. There will probably be an initial market wobble — FX markets might struggle and Treasury yields might fall a bit. The bigger picture is really that the world is not much different.

    Greg Salvaggio at Tempus Consulting in Washington was more scathing.

    I really find it quite amazing that a credit agency that could rate mortgage backed securities AAA has decided to downgrade the U.S. government.

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  59. DollarBill

    US debt is the definition of safe. We have the largest and strongest military, the largest and strongest economy, and we control our own currency.

    S&P is a joke.

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  60. mutabaruka

    Whatever happened to a good old back alley beatdown for these silver spoon fed, country hating motherfuckers. Who are their friends, who did they call before the downgrade, did their friends benefit from this, did they tip off Goldman sachs, why wouldn’t the market rally for the past two weeks. Somebody has to pay for this downgrade, making the prez look bad in election season. Maybe somebody needs to remove their nails one by one anyways I will go back shomping.

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  61. Spooky

    1000% correct Fly. Nothing else to add.

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  62. Quint

    The media is going to make this S&P downgrade an event, whether you like it or not in the short term. I agree it’s not an event in the long term.

    And the retail investor is going to sell stocks much faster this time…many didn’t make a move during 2008 and they got lucky with the rebound…they are not going to take that chance again.

    I had more than my fair share of calls from friends and family ever since the media started hyping the “default scare”.

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    • riggedgame

      For the first 45 MINUTES the USA stock market is open. MAYBE. A time to
      cover shorts and go long. The second “Generational Market Bottom” in 3 years.

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    • SUBCOMANDANTE CHINCHINCHILLA
      SUBCOMANDANTE CHINCHINCHILLA

      It’s an event longer term if Fitch also downgrades. Then it’s a party.

      Moody’s will never downgrade as long as Obama is in power and Buffett is alive.

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  63. riggedgame

    BTW: The AA+ rating given the USA is now the same ast those OTHER deadbeat countries like:

    China, Japan, Taiwan, Saudi Arabia and Kuwait.

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  64. DEVILDOG

    I expect a fuck you fly crash. You’re a fucking idiot. I hope you loose you bull shit ass.

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    • j

      like you did in Faz, Dev? How much of your lod man’s money did you waste betting it on Faz as it took a dump. You only have yourself to blame and no one else.

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  65. isaretard

    I expect Monday to be much like Friday as everyone will be cautiously waiting to see what everyone else’s reaction will be. Looking for a 400 point swing up and down closing within 80 points of Friday close on the DOW. Locked and loaded aug puts and sept calls on DIA on Friday. Now roll those fuckin dice!

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  66. traderdan

    Non event eh? Good luck with that complacent attitude.

    http://www.voanews.com/english/news/Israeli-Stock-Markets-Falls-6-Percent-127087548.html

    By the way I thought this chart was interesting showing that brain dead Sarah Palin and her Tea Party retards caused this mess we are now in.

    http://www.businessinsider.com/the-sarah-palin-hells-no-market-top-2011-8

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  67. DEVILDOG

    Hey fly shit…how much did you nd your stupid followers loose on WNR? Prepare to loose more. Please back your stupid mouth and post the longs you’re buying tomorrow morning. You’re nothing but a NYC lying shill. FUCK you AND cramer!

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    • j

      Hi Dev

      You get bolder with each down move. I guess we’re near bottom then… like last time.

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      • DEVILDOG

        S&P will be DOWN at minimum 5% tomorrow. Just the beginning. S&P 154 by 2016. By the way I called the 5/2 high at 1370.58 EXACTLY for both the date and price. I’ve been making a fortune 3X SHORT since. Yes, I too played the bull shit bounce over the past two years. Difference is I know it’s bull shit and you’re a stupid member of the sheeple herd that believes.

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        • j

          Dog

          Bullshit. You bought FAZ three years ago and kept holding. people here LOL’ed at you so you threw a dummy spit and ran off like a big fucking crybay. We can go the tape if you want.

          All I have to do is do a google check and we’d get the records

          I don’t know why you’re biting your master’s hand by the way. Fly treated you well. He gave you a blog spot called ” Monday with the the Devil dog” and you’re now treating him like shit. Show some fucking manners for a change, you old buzzard. If you think the market is going down,well fine. However it doesn’t mean you have abuse fly because of it, you loon.

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        • Po Pimp

          I called the 5/2 high at 1370.58 EXACTLY for both the date and price

          I must have missed that post.

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  68. DEVILDOG

    Buy WNR…LOL.

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  69. Yogi & Boo Boo

    Welcome back DD.

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  70. mtp

    The S&P Downgrade is a Non-Event… this post title may look silly in morning… time will tell

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  71. AE

    I must agree with you Fly but unfortunately S&P ratings are linked to CDS contracts. This stupidity has triggered a credit event that will bring disruption to the markets.

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  72. j

    I’ve thought long and hard on this and here’s what I’m thinking about the downgrade. in of itself the downgrade is actually a pretty decent outcome for the simple reason that this completely change the politics in Washington finally about spending. No fucking politician in a marginal seat will ever again vote for or publicly state he supports any form of deficit spending for the entire time I will be alive and i hope to be alive for a long time. This doesn’t mean there won’t a downdraft this week on this alone. There may very well be. However eventually what i said will hit home to the market and people will begin to readjust and see the good side. This means also that with fiscal austerity the Fed will be super fucking easy over the long term, which is actually great for stocks.

    However as I’ve been saying for a while now the real fucking problem is Europe and there I’m not at all optimistic those fucking morons will be able to figure some ways out. That’s the problem that could bring this entire house of cards down.

    I thing the final outcome will be a southern Europe broken away from the north and they will either have a southern Euro or individual currencies.

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  73. wilmer

    DevilDog!

    This is like 2008 all over again! Memories…..

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  74. AConcernedReader
    AConcernedReader

    A non event? How can you say that. S&P Futures are down 32 handles and you say this is a “non-event”? On the open there is going to be sell orders. How is that a “non-event”? If there are people who are selling because of this downgrade, how is that a non-event?

    Jesus Christ you’ve lost your sanity. After all the year’s I’ve read this blog, it seems to me you are a “genius” when the market goes up. But when the market goes down, you lose all rationale. I noticed you rant and rave when things go against you like a child.

    Even to the point of holding WNR alone is irresponsible. Letting your losers run is disaster. And I’d hate to see you do that to yourself.

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  75. Marcos Northington

    Howdy! I realize this is sort of off-topic however I had to ask. Does running a well-established blog like yours take a large amount of work? I am brand new to writing a blog however I do write in my journal every day. I’d like to start a blog so I can share my personal experience and feelings online. Please let me know if you have any recommendations or tips for new aspiring bloggers. Thankyou!

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  77. Kevin Abdallah

    Can I’ve your whole facebook? Awaiting the outcome!

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  78. Deon Hartage

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  79. Monty Bess

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  80. Painters

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  81. del

    After all above said…i hope it will remain a non-event..but as Fly mentioned its an opinion..reality will dawn soon then we will really know if its non-event or not.

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  82. ruggyup

    Interesting to read different opinions. All I know, for a fact, is my son called to tell that yesterday he received in the mail a pre-declined credit card offer.

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