Posted on 02/09/2013 5:45:30 AM PST by SeekAndFind
Staring at a another debt ceiling crisis, the president's punishing the one credit rating agency that dared downgrade U.S. debt in the last crisis.
And Wall Street analysts say the timing's no coincidence. Just weeks away from the next debt-limit showdown, the Justice Department filed a whopping $5 billion lawsuit against Standard & Poor's for alleged fraud.
The case appears weak, but the message it sends S&P and the other independent rating agencies is clear: Don't downgrade anymore.
"It's a foregone conclusion that no more downgrades will be coming," said Euro Pacific Capital CEO Peter Schiff. Curiously, Attorney General Eric Holder can't explain why the administration is targeting only S&P in its unprecedented investigation of Wall Street's credit rating industry.
S&P's subprime securities ratings were virtually identical to those of Moody's and Fitch, yet the government's singling out S&P for prosecution.
The reason seems obvious: Unlike Moody's and Fitch, S&P embarrassed President Obama ahead of his re-election bid by downgrading U.S. debt to AA+ from AAA.
The shocking 2011 reduction in the rating quality of Treasuries was the first in U.S. history.
Even so, S&P said it was justified based on the Band-Aid the administration stuck on the huge debt problem, one that now only looms larger.
At the time, Obama was quick to slam S&P's decision. Now many observers say he's getting even by shaking down S&P for billions in subprime securities losses at federally insured financial institutions.
"Given the circumstances and timing of the suit, can there be any doubt that S&P is paying the price for the August 2011 removal of its AAA rating on U.S. Treasury debt?" Schiff asked.
(Excerpt) Read more at news.investors.com ...
RE: Unlike Moody’s and Fitch, S&P embarrassed President Obama ahead of his re-election bid by downgrading U.S. debt to AA+ from AAA
And unlike Moody’s, Obama buddy, supporter, and tax hike enthusiast, Warren Buffet doesn’t own a huge chunk of S&P.
There is no Moody or Fisk 500 index. There is an S&P 500
Contrary to the article, the president has now picked a fight that will be lost with the next downgrade. Unlike the Peter Schiff toady, S&P has real power.
The president was foolish enough to bring a lawsuit to a treasury downgrade fight
Ain’t no smacking involved. This is pure balls to the wall get evenness.
What would happen if as a result of this attempted shakedown, all these “ratings Agencies” just FLAT OUT REFUSED TO RATE ALL GOVERNMENT DEBT?? Which is precisely what they should do IMMEDIATELY. Watch this lawsuit evaporate post haste.
You can take the thug out of Chicago, but you can’t take Chicago out of the THUG.
You can take the thug out of Chicago, but you can’t take Chicago out of the THUG.
oops, sorry
A socialist using selective enforcement of the law as a weapon against those who oppose him? Inconceivable.
So you say the President is bluffing and S&P will call his bluff with the next downgrade.
Sure will be fun to watch.
That was worth a double posting and very true.
Lord knows how many more of these vendettas 0banana has up his sleeve to distract attention away from hot issues like Benghazi, drone killings and F&F. He just orders Holder to have them cued up for the media when the need arises.
———So you say the President is bluffing and S&P will call his bluff -——
No, the president is not bluffing, he is acting foolishly. He has overstepped his bounds.
My reasoning is that at some point sane men will conclude that the abuse of power must be met with real power. The elected politicians are unwilling or unable to exercise their power effectively. There is no effective political opposition.
There is effective market opposition. We don’t know S&P’s supporters but money is at stake. Therefore, there must be several willing to finally engage and use their power.
S&P has the power to influence bond yields and thus force action. The law suit might just force the issue. Downgrade is there waiting for a trigger
It is going to be historically interesting to watch
The risk of downgrades is higher interest rates for federal borrowing, right? You can see what a huge threat this is to Obama. Higher interest rates would be put the kibosh on his whole debt-based megaspending and redistribution project. Higher interest rates would stop him more surely than the Republican House can. It’s no wonder Obama would go all Chicago on S&P. They dared put a finger on his Achilles heel.
S&P needs to name Obama as a witness, and notice his deposition. How long would it take for the suit to be dropped. You know he won’t sit under oath. The last President to give sworn testimony got hit for $800,000+/- worth of perjury and was a laughingstock for trying to redefine the word “is”..
The little napolean bastard needs a blanket party.
S&P is paying the price for honesty,something he doesn’t allow because it can spread if left alone.
Almost right. Just issue a statement:
“Given that the United States Government is in a judicial conflict with Standard and Poor’s over our rating services, it is a conflict of interest for us to continue rating the Bonds of the United States and associated entities, such as Fannie Mae, Freddie Mac, or Sallie Mae, and similar, until all legal issues are resolves. Standard and Poor’s also withdraws all ratings of these issues until resolved.”
And then see if ANYONE buys . . .
Thanks SeekAndFind.
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