Friday, October 28, 2011

S&P puts its stupidity on display once again



Over the past few years we've seen numerous examples of S&P stupidity, from the toxic assets rated AAA (although that might have just plain, fraud not stupidity) to the downgrade of the US credit rating even though there is ZERO risk of a US default because it's a currency issuer, to this...a statement by S&P on Europe's EFSF fund:

""In our opinion, there is an "almost certain" likelihood that the EFSF's 'AAA' rated member governments would provide timely and sufficient extraordinary support to the EFSF if needed."

And who might that support come from? France? Germany? Those nations are all credit sensitive themselves and are, therefore, constrained due to the fact that none of them are currency issuers.

By establishing the EFSF as the mechanism by which the situation gets "resolved" and precluding ECB support, they have all gone into "Ponzi," a fact you'd think S&P would recognize. But then again, S&P doesn't think it just issues proclamations based on ignorance.

15 comments:

Mario said...

why is it ponzi?

mike norman said...

Borrow from someone to pay someone else. Keeps going until all funds are exhausted and/or no more lenders can be found. German, EU, funds are limited. Only ECB can keep them out of ponzi.

Ben Strubel said...

Wow S&P is beyond insane. US doesn't get AAA, but a conglomeration of infighting, incompetent Europeans with shaky credit does. I don't see how on earth they can justify AAA for the EFSF.

Mario said...

oh yeah right. duh! thanks Mike.

agreed Ben. I fade all things that come out of S&P. LOL :D

Letsgetitdone said...

S & P is purely venal and nuts to boot! What do you think Moody's will do, Mike. Think they'll recognize the difference between a currency issuer and currency users? -:) -:) -:)

john lutz said...

how can U buy CDs on these idiots?

SchittReport said...

OUR FRIEND IN SUPPORT OF OWS - MUST SEE!

http://www.youtube.com/watch?v=SEBvV6B_5b0

http://www.youtube.com/watch?v=Y2eX0dtzeH4

http://www.youtube.com/watch?v=W_FnfH8-wqI

Mario said...

well at least he's down there talking to people. I respect that.

But once again it all really comes down to MMT principles again and how taxation and expenditure really work. Until we all get those concepts, it's just drunken people blabbering off at each other.

His FDIC bailout argument is flawed b/c there was not bailout policy in place before the huge 2008 bailouts happened. The banks went for the bailouts with or without government policy and they behaved recklessly without government policy. The man has no point. He acts like a bludgeon in a debate. LOL

SchittReport said...

mario, with all due respect, i think the occupiers were very pissed off at him: 1) telling people that you are very rich (which in his case is questionable) when most of the occupiers are living hand to mouth; 2) asking poor people whether they would like to be rich like him; 3) starting (and losing) arguments with anyone with a mouth over there; 4) telling occupiers rich people need to pay less taxes when clearly higher taxation for the wealthy is a high priority point on the agenda 5) being such an ass that people shout him down for being a fool and an idiot

GLH said...

Earlier I was reading about Hyman Minsky and wondering if Europe was in Ponzi financing. Thanks for answering my question.

googleheim said...

With Norman's various list of MMT invariants ( aka Mike's Toolkit), it was easy to see how the currency, the banks, the markets, and the EU itself was all rigged over the past years.

googleheim said...

That gets back to how things should have been - like fading the Euro but what really happened - rigging.

googleheim said...

Europe Seeks Investment From China in Euro Rescue

on the front page of NY Times.

is this part of the Ponzi ?

If Europe lets Greece temporarily default and restart the old Drachma, then it would protect EU from China.

Default is bug spray to Chinese mosquitos.

I assume.

Now the Chinese want to buy into Europe which is wholly crass.

mike norman said...

The guy is insufferable.

Anonymous said...

As you suggest it may be the case that S&P are not being stupid...