S&P downgrades US debt from AAA..... (treason, county, voters)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
They are GSE but they are not completely backed by the full faith and credit of the US. They are publically chartered and do get special privileges, but they are still private companies. Its nothing like the post office. If it was why would they have to be taken into conservatorship. So while they do get preferential treatment in terms of credit there are no guerantees of creditworthiness from the US government.
As an investor in properties leased to the federal government, I can tell you first hand that ALL GSE's enjoy the viewing by the investment community of the full faith and insurance of the federal govenrment.
Not even the USPS is "guaranteed" by the federal government, but not one investor I've ever talked to about government limited partnership balked at the idea that the government guaranteed their investments.
Special bond discounted rates arent available to anyone, without there being limited risk for the limited returns.
As an investor in properties leased to the federal government, I can tell you first hand that ALL GSE's enjoy the viewing by the investment community of the full faith and insurance of the federal govenrment.
Not even the USPS is "guaranteed" by the federal government, but not one investor I've ever talked to about government limited partnership balked at the idea that the government guaranteed their investments.
Special bond discounted rates arent available to anyone, without there being limited risk for the limited returns.
Even so GSE =/= T-Bonds. T-Bonds have the explicit assurances of full faith and credit lumping them in the same boat is silly. Again...
"Although many investors assume that F-F obligations are effectively guaranteed by the U.S. government, the fact is that the guarantee is implicit only. I will not attempt to forecast what would happen should either firm face a solvency crisis, because I just do not know. What I do know is that the issue is a political one, and political winds change in unpredictable ways."
That is a federal reserve bank executive telling you you are wrong. Once more he is saying you that what you are saying is a commonly held but completely untested assumption.
On top of that Fannie and Freddie have trillions of those increasingly risky assets. That is a lot riding on an implicit guerantee.
Last edited by Randomstudent; 08-06-2011 at 12:57 AM..
Even so GSE =/= T-Bonds. T-Bonds have the explicit assurances of full faith and credit lumping them in the same boat is silly. Again...
"Although many investors assume that F-F obligations are effectively guaranteed by the U.S. government, the fact is that the guarantee is implicit only. I will not attempt to forecast what would happen should either firm face a solvency crisis, because I just do not know. What I do know is that the issue is a political one, and political winds change in unpredictable ways."
That is a federal reserve bank executive telling you you are wrong. Once more he is saying you that what you are saying is a commonly held but completely untested assumption.
If something is purely implicit it is hardly a guarantee. Especially when the people supposedly guaranteeing it are saying they do not really know what would happen if the s*** hit the fan. The only reason to take such an implicit assumption seriously is because of the catastrophy that would occur if it was not followed through upon. It is similar to betting on large non-gse investment banks with horribly lopsided balance sheets getting bailouts. Investors tend not to balk at anything until they realize whats going on and then they balk a lot. That is the entire point of charging interest above inflation is there is ultimately going to be some risk.
The fact of the matter is if stuff gets really bad the government has to choose between paying its T-Bond holders, social security receipents, and military personal, the GSE investors are long gone. That is why GSE investors cannot be said to be on the same level as priorities that have explicit assurances.
Last edited by Randomstudent; 08-06-2011 at 01:12 AM..
In all fairness this is something that's been coming for several years. Both bush and obama are responsible. Both republican and democratic parties are responsible. The american people are responsible, at least when we tell our pollsters and politicians we want both less expensive government and our ss, medicare, ect..., ect... benefits.
I pretty much agree with Dutchman that the responsibility is shared...no one person or political party is solely at fault. Even the common citizen living way beyond their means on borrowed money has contributed to this mess.
One comment though: Social Security funds do not belong to the government...that is money the people have payed into all their working lives...it is their money...which they can claim in monthly payments when they retire. So yes, we retired folk do tell our pollsters and politicians we would like our money back!
Standard & Poor’s rating downgrade is a strong indicator of our country’s decline under hybrid Obama. Voters never should have elected a spurious born person to be President. Our country deserves better.
America has gone from AAA to AA under Obamas watch. How was the turn out for his Hip Hop party. How much did it cost taxpayers.
How many at the Hip Hop party are paid up on their taxes?
For a nation whose priorities over the last decade or so are..
1) What the Kardashians, Lohan, Situation,Spears and whatever the newest latest trainwreck the media creates did last night is much more important than what is going on in the World
2) Having kids and then deciding that some meaningless fling is more important than your kids thus having the kid ask "where's mommy/daddy?"
3) making a buck no matter who you hurt and step on
4) Look the other way saying "its none of my business"
5) Pointing the finger at the other side and saying "its all your fault"
and finally allowing themselves to become more easily brainwashed by the mainstream media pornographers than Annikan was by the Sith
The problem is more than dirty politicians.... it is YOU AS WELL
Take the time and educate yourselves and we can avoid more trainwrecks like Bush, Obama, Reid, Pelosi, Boehner etc.
This is very, very bad. I have to wonder how this is going to affect all of us. Regardless, our bonds realistically should be rated junk. I pray that officially never happens.
I don't know that our bonds are junk, but our president sure is.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.