S&P downgrades the US for the first time in history.

So now its official the US has been downgraded by a rating institute. In actuality this is a complete non event as everybody has seen this coming for a long while. Its more about joe public getting to understand something is happening. Something he already has begun to grasp as unofficial unemployment in the US now is some 20%, one out of 7 is dependent on food stamps and unofficial inflation as calculated by shadow stats now is over 11%. Sure Joe public has started to feel the pressure regardless of what these moron, private mind you, rating institutes are saying.

These guys S&P, Moody’s et all in fact where the people instigating the subprime debacle giving AAA rating for what turned out to be completely worthless paper with no underlying value what so ever. Remember these instruments where given these ratings by the rating institution when there were in fact just hand full companies in the world that had AAA rating.

That was not incompetence that was pure criminal behavior on behalf of the moron rating institutes. The results now is that banks and pension funds all over the world bought these papers and now it’s a total utter and complete chaos on the financial markets as nobody known who sits on what worthless paper.

It can explode anywhere and everywhere just as soon as one large player or country mind you defaults. That’s then Lehman times 10 in action. This as these paper with what in reality had no real underlying value what so ever then have been leveraged some 100, 200 possibly in some cases 500 times. The whole derivatives (completely unregulated and with no insight anywhere to speak of is worth more than $600 trillion. In fact that the key problem as of now is the fact that tractability of it all is totally nonexistent).

Bottom line this is the real reason why all the mayor US as well as European banks are insolvent as just very minute negative positions of some 1 or 2% can blow up the entire bank. The implications then is these are impossible to bail out. Mind you insolvent is something very different that liquidity problem and so pouring liquidity on these banks is not solving the underlying problem in any way, shape or form. By defenition they are and have been insolvent now since 2008.

Too big to fail is correct as today if one of the larger banks or even a country now where to default – all larger banks will have to default.

By changing the accounting principles e.g. by not marking assets to a market value but rather calculates a so called booked value the charade can continue for a while.

The situation actually, and I do not want to spread panic here but facts are that its completely out of hand. In a global world everything is intertwined and interconnects. The result is that German and French banks and Greece investors now sits on a bundle of junk, worth zilch and nothing originating from the US Subprime market, but is not able to write it off as if they did they go bust in a second.

Nouriel Roubini as an example recognizes this about the global economy when he Twitters: “Since S&P downgraded the Fed that is now holding AA+ Treasuries it should downgrade the ECB to junk as it holds lotsa BBB to CCC PIIGS debt”

Roubini here is not mentioning the fact tones of European banks in addition to sitting on risk relevant the PIIGS also has incomprehensible amounts of toxic waste originated from the US subprime debacle.

Then if a PIIG country wold default well then listen to what Atomic Earth is outlining:

If Greece -or, heaven forbid, Italy or Spain- were to default, and let's make that a "when, not if" for Greece, Société Générale et al will be desperately gasping for air because of their bond losses, the EU and ECB won't be able to come to all the rescues, the only way for these banks to come out alive will be their legitimate claims on CDS written on Wall Street once a credit event has been declared, and the US Treasury and/or Federal Reserve will once again be called upon to save the Mediterranean day at the cost of Joe and Jane Main Street, My Town, USA.http://theautomaticearth.blogspot.com/2011/08/august-3-2011-next-bank-bailout.html

So now the people that in fact made all of this possible the rating institutes are now once again being listened to. I mean what the hell do they know about anything? Fuck em. All of these moron rating institutes people by now should be behind bars, a long time ago. They should have been locked away for good and all these rating institute morons activity ceased.

Instead not only are they not hold accountable at all, non has been taken to court even and now they have the nerve to downgrade countries that have been forced to bail out their banks as a result of these rating agencies criminal behavior? It’s a F**** joke. It really is. The real joke then is these writers and bloggers all over the world now actually focuses on the S&P downgrade as that it it self ment anything???

Mind you in Italy these criminals are being treated for what they are and the prosecutors are giving them a hard time. Hope the result will be jail time and hefty fees for very high level senior level executives.

Aug 4 (Reuters) - Italian prosecutors have seized documents at the offices of rating agencies Moody's and Standard & Poor's in a probe over suspected "anomalous" fluctuations in Italian share prices, a prosecutor said on Thursday.
http://www.reuters.com/article/2011/08/04/us-italy-ratingagencies-prosecutors-idUSTRE7734FR20110804

This is exactly now what every country in the world should do as these rating morons with their downgrades in fact are in the process of creating yet another great business for international hedge funds. In fact the rating agencies work for these financial hyenas as country after country now is treated with austerity measures. Welth is transferred all over the world via the work of these rating institutes from the taxpayers to a few wealthy to an extent never ever seen before in history.

Check Out The Hedge Funds Profiting Off Big Europe Shorts
Read more: http://www.businessinsider.com/hedge-funds-profit-euro-shorts-2011-8#ixzz1UEJePPzW

It can be noteworthy that these rating institutes all have made great bussines selling their ratings to the financial markets. They have made a fortune on what in fact was false and completely incorrect. As voices has been raised against then acusing them of crime their reply has been- we have only sold our opinion.

So lets then understand that as the rating insitutes only priovide an opinion they can not be hold accountable. Question then why the hell does ANYBODY even bother about what they have to say?

Lets face it in the US consitution the US goverment has the right to print their own money without having to pay any interest. Thats then the end of these rating fucklers. Only question is why doesent the Trasurie print their own money? And what do they have to pay interest and listen in any way to rating fucker?

So then what are the implications of all of this? The implications are that borrowing is supposed now to get more expensive for the US government financing their deficit as creditor will demand a higher interest in order to compensate for higher risk.

So really for all countries then this is a real bad thing as they have to pay more and more in order just to simply finance an existing deficit as interest charges up. This of course while the hedge fund makes another fortune and tax payers are as a thanks for bailing out banks are given austerity. Whet we need is F***** austerity now for rating institutes.

The US however have in fact used the printing press to short cut any attempt by the bond vigilantes as they simply hold interest rates artificially low and print money to buy their own short-term treasuries.

Hope you all take the time to listen below to Max kaiser e.g. about how the financial hyenas acted against the people of Greece:
http://maxkeiser.com/2011/08/05/max-keiser-standup-rage-mott-st-nyc-august-2nd-2011/

And then why not also have a go at this as were now moving in to a stage of perpetual austerity moving from country to country. Remember we started with the Baltic Countries, then Island then Piigs etc. Soon well be back to Sweden again - trust my words as the swedish banks start to deteriorate given the housing buble they again have created.
http://intheendwerealldebt.blogspot.com/2011/07/thermophyle.html