How will the market react to downgrade?

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Originally Posted by Parkbandit

Good to see the market isn't in full blown panic.. it's "only" down 200 now.. with signs of it leveling off. Maybe it won't be as bad as first anticipated.

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Down 344... the 10am leveling off didn't continue like I thought.

I think we just need to nuke wall street from orbit. It's the only way to be sure.

We just need to (anything) from orbit.

Fannie and Freddie downgrade with such excellent timing, on the plus side oil is down now too

Responding to this here rather than the rep thread:

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Originally Posted by Parkbandit

And Moody's, on the other hand, seems to give support for the decision to cut spending: ... The second bolded seems to suggest that the Tea Party didn't push hard enough for more cuts.

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This is a very interesting statement. S&P's statement specifically refers to Congress' current inability to raise revenue, and specifically finds the spending reductions implausible and irrelevant. Why would you respond about further cutting spending?

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Originally Posted by Latrinsorm

Responding to this here rather than the rep thread:This is a very interesting statement. S&P's statement specifically refers to Congress' current inability to raise revenue, and specifically finds the spending reductions implausible and irrelevant. Why would you respond about further cutting spending?

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You do know what Moody's is, right.. and the similarities they have with S&P?

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Originally Posted by Parkbandit

You do know what Moody's is, right.. and the similarities they have with S&P?

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The Moody's statement doesn't mention cutting spending at all.

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Originally Posted by Latrinsorm

The Moody's statement doesn't mention cutting spending at all.

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You might want to actually read the statement. Here, I'm feeling charitable today.. so I'll highlight the section and provide you a link.

http://www.moodys.com/research/Moody...ocid=PR_223568

In confirming the Aaa rating, Moody's also recognized that today's agreement is a first step toward achieving the long-term fiscal consolidation needed to maintain the US government debt metrics within Aaa parameters over the long run. The legislation calls for $917 billion in specific spending cuts over the next decade and established a congressional committee charged with making recommendations for achieving a further $1.5 trillion in deficit reduction over the same time period. In the absence of the committee reaching an agreement, automatic spending cuts of $1.2 trillion would become effective.

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Originally Posted by Parkbandit

Moody's also recognized that today's agreement is a first step toward achieving the long-term fiscal consolidation needed to maintain the US government debt metrics within Aaa parameters over the long run.

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There are other ways to achieve fiscal stability than cutting spending. Obama's original proposition to raise taxes and cut spending would have been far more effective than a cuts-only program.

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Originally Posted by BriarFox

There are other ways to achieve fiscal stability than cutting spending. Obama's original proposition to raise taxes and cut spending would have been far more effective than a cuts-only program.

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I can only think of three solutions, other than the three below, what are you thinking?

1. Increase revenue
2. Reduce spending
3. A blend of both the above

Balancing a budget isn't rocket science. I'd like to see justification for everything we spend money on, rather than a status quo budget with x% increases every year.