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August 10, 2011

The Downgrade

German philosopher Arthur Schopenhauer: “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” About a rolling depression. As James Fallow wrote five years ago, “As it comes to the old parties, the story boils down to this: in the age of television, Democrats can’t win except when everything is handed to them or goes their way, while Republicans can’t govern without breaking the bank.”

Seaworthy vessels do not sink. There are boat inspectors who check out sinkability of those vessels. Likewise, the sole job of credit-rating agencies like Moody’s Investment Service, Fitch Rating and Standard & Poor’s is to gauge creditworthiness. As market concerns about France’s triple-A credit rating increased, shares in French banking stocks plunged Wednesday on renewed market jitters over their exposure to Greek debt. “If the maturity of Greek government bonds is extended to 2024, this could mean further depreciation of the assets of French banks that are exposed to Greek debt,” said the trader, who spoke on condition of anonymity.

Société Générale SA was trading down 17% at €21.61, as spokeswoman for Société Générale said, “”We categorically deny all market rumors.”

Loan demand, wise men and women argue, is so, those low interest rates won’t go higher anytime soon. So the downgrade by Standard and Poor’s of U. S. debt logically means a shift in credit quality. The rules of the game have not changed, only the grading system. “If the AAA is no longer AAA, then everything else has to get downgraded,” Edward Dempsey explained. And I wondered if Dempsey learned this from watching the effect of expansion on major league baseball.

The credit-rating agencies whose sole job is to gauge the creditworthiness of bonds, all reiterated that France has a stable outlook, with an unchanged triple-A credit rating. France’s credit rating was thrust into the spotlight Monday when cost of insuring its debt against default spiked. Amidst concerns France may be the next triple-A-rated sovereign to suffer a credit downgrade, as another leader came unexpectedly back from holiday to call a meeting with key cabinet ministers along with Bank of France governor Christian Noyer, President Nicolas Sarkozy sought to defend France’s credibility, saying France will do whatever it takes to ensure meeting its deficit-reduction targets.

Not long ago, consumers leveraged their homes to maintain a lifestyles in an era of limited wage growth. Subsequently the U.S. government took on debt to bail out the economy. However the U. S. government now collects less tax revenue than in did in 2008, yet its debt is trillions higher. The current scenario witnessed falling income levels and rising debt levels worldwide. Something has to give.

“They know,” Edward Dempsey writes, “which is why they are desperately trying to create inflation… to pay that debt back with cheaper money.”

In France, new concerns were triggered that the government may turn to banks to help reduce its deficit. During the latest round of global sell-off, changes were implemented to the Euro currency bloc’s bailout mechanism, along with a new bailout package for Greece. Before a July 21st summit, France’s minister for European Affairs had said initiatives weighing a tax on banks to resolve the Greek debt crisis would be discussed, though no mention was ever made in the conclusions of that summit.

In China, money meanwhile continues to flow in, as the government reported on Tuesday that consumer prices jumped 6.5% in July, its fastest pace in three years. With all these other export-dependent Asian economies, since Friday’s downgrade by Standard & Poor’s of the credit rating of the United States, foreign investors have been unloading shares in Korea – Asia’s fourth-largest economy attracting so much capital in recent years, heavily dependent on exports, accounting for roughly more than half of the country’s GDP. Those foreign investors hold about one-third of the market’s total capitalization in Korea. How long before China feels the affects of a recession which is in transition toward an European Depression?

On August 3, the Obama administration released its own eight-page national strategy for countering domestic violent extremism.
Religion Blogs

2015 POST SCRIPT: That Obama plan for domestic tranquility seems to have shown up, as U. S. Marshalls have taken to the night sky to monitor at night the Somali community. After nightfall, as the innocent are afflicted by those with power and the money to hire these low-flying planes from LCB Leasing of Bristow, Virginia, like last night over the mosque on University Avenue located in the capital city. So this was the ague what followed Kristallnacht? “Canards,” with both senses of the meanings of the word but more like the wing-like projection on a Cessna. Note the suspicion of others who speak a foreign language, with silence about stolen cellphone data by U S Marshalls, in their coverup with planes registered to these independent contractors like RKT Productions of Bristow, Virginia. So similar to living with domestic abuse on all sides of the great divide. Not racial profiling but the profiling of Creed by the United States Marshalls, so much like the 250 armed protestors who showed up yesterday outside a mosque in Arizona. See the attached article about the abnormal distemper called “Morbus.” Ague. Chilling cover-ups since at least 2007 of this program based upon suspicion of others who speak in foreign tongues — or pray differently than I pray– is the 21st Century kind of xenophobia on North American shores, with those with kingly power wondering about the inner goings-on of its subjects. From out of the plague of September 11th had come not only the Patriot Act, but the thinking that it was somehow Patriotic to spy on your fellow Americans. And the described Cessna flying over St Paul, Minnesota had occurred on the night before the Patriot Act was to expire.

http://www.startribune.com/nighttime-flight-circles-low-over-twin-cities-for-hours/305398901/

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1 Comment »


  1. Comment by paperlessworld — September 7, 2011 @ 4:17 AM | Reply


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