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S and P Downgrades U.S. Credit Rating: “Hail Victory” for the SS Kampfgruppe Norquist

Norquist photo

Gruppenfuhrer Norquist (photo credit, Gage Skidmore)

COMMENT: Well, folks, they’ve done it. The GOP’s Tea Party fascists (with a generous assist from an apparently clueless and definitely gutless Barack Obama) have succeeded in causing S & P to downgrade the U.S.’s credit rating from AAA–the first time in history that this has been done.

In FTR #412, we outlined the strategy of the GOP–run up massive government debt in order to force the rolling back of the New Deal-style social legislation that they despise. The point man for the “no new taxes” mantra is lobbyist extraordinaire Grover Norquist.

Some things to consider in this context:

  • Had the criminally negligent U.S. media (and the apparently clueless, and definitely gutless, American political establishment) nailed tax-cut maniac Grover Norquist and The Dark Lord Karl Rove on their overt ties to Al Qaeda, the Muslim Brotherhood, Hamas and Palestinian Islamic Jihad, those front-running fascist bastards would be in shackles down at Guantanamo instead of guiding the U.S. into catastrophe. Norquist himself is married to a Palestinian Muslim woman and may well have converted to Islam himself.
  • Had the criminally negligent U.S. media (and the apparently clueless, and definitely gutless, American political establishment) taken stock of the profound Nazi influence on, and participation in, the GOP, the Republicans would be seen as the traitors and fascists that they are, and would not be able to cloak themselves in a red, white and blue mantle.
  • One can but wonder how many of the Tea Party fascists are actual operatives for the Underground Reich and its economic component, the Bormann capital network. The events now unfolding will, if left unchecked, hand the mantle of world economic leadership to Germany. It is deeply tragic that people have failed to use the work of Paul Manning, a true hero if ever there was one.

Now comes the word that S & P’s action was largely driven by their belief that Obama (the black man with the white flag) and the Democrats will fail to block the extension of the Bush tax cuts.

“S & P Downgrades U.S. AAA Bond Rating to AA+, Outlook Negative” by Brian Beutler; TPM Muckraker; 8/5/2011.

EXCERPT: As threatened, the ratings agency Standard & Poors has downgraded the country’s AAA bond rating, despite acknowledging, according to multiple reports, that their initial calculations included a $2 trillion error projecting U.S.’s debt-to-GDP ratio over time.
You can read the entire explanation below the fold. But the key is that the use of the debt limit as a legislative bargaining chip, combined with gridlock in Congress, led S&P to publicly conclude that the country will have a hard time restoring gravity to its debt trajectory.
However, while they parcel blame across Congress — implying Democrats are rigidly opposed to cutting entitlement spending — they hint that Republican intransigence to raising tax revenues is more troubling.
From the agency’s press release:

. . . . Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade. . . .


17 comments for “S and P Downgrades U.S. Credit Rating: “Hail Victory” for the SS Kampfgruppe Norquist”

  1. We’ve seen a mysterious “impaired opponent” help Tea Party fascist Jim DeMint prevail in South Carolina — a bizarre “Democrat” who won without campaigning & with very mysterious “financial support” that was never investigated (in the sum of thousands to get him on the ballot, when he was homeless & broke):


    We’ve already seen the GOP use overtly “fake Democrats” here:


    Is Obama actually clueless and/or gutless?

    As Rep. John Conyers (D-MI) has pointed out, it was Obama and NOT the Rapepublicans who took the extraordinary & gutsy step to propose cuts to Social Security & Medicare.


    An op-ed in the NYTimes of Sunday, August 7, 2011 reads:

    “In contrast to FDR … Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it. He never explained that decision to the public — a failure in storytelling …”

    Maybe I’m way off base. I can’t buy that Obama is “clueless” — not when one of Rove’s key stratagems is to “play dumb” when convenient & use political candidates who excel at doing so. And, apparently, to use “fake Democrats” shamelessly.

    According to many sources, Stanley Ann Dunham (Obama’s mother) worked for Peter Geithner, father of Timothy Geithner, when he ran the Ford Foundation (an organization with many CIA ties). Dunham married Lolo Soetoro, a key liason between the U.S. oil industry and the Suharto government (a right-wing government installed via bloody coup with CIA support).

    Dave has alluded in the past to Obama being a “perhaps second generation” intelligence officer.

    Was Birtherism a smokescreen to dissuade the curious from investigating an intel “legend” (in the parlance)?

    Is there a UNPO, Russell Means-type, Francis Parker Yockey “Third Position” angle to Obama?

    Posted by R. Wilson | August 7, 2011, 4:50 pm
  2. Not to mention, both Paul Krugman & Dean Baker have stated that there is zero sound economic basis for the S&P’s downgrade:



    Are there Bormann-connected individuals running the S&P?

    Where were S&P when banksters repackaged mortgage-backed securities and sold them as AAA-rated?


    Moody’s, Fitch’s, and S&P directly bear partial responsibility for the 2008 meltdown.

    Where were Moody’s, S&P, or Fitch for the past 10 years?

    Answer: Pointing at the government debt, shrieking “THEY are the problem!” when, in fact, the PRIVATE SECTOR is the reason for the economic crisis. The government debt is NOT the cause of the banking crisis or the jobs crisis — Goldman-Sachs & their ilk are, and S&P for giving a thumbs up for 10 years.

    Masterfully, the S&P explicitly accuses predominantly Tea Party fascists’ intransigence — but is fairly low-profile with their accusation, and leaves room for the FOX Wurlitzer to blame Democrats.

    Meanwhile, it appears that S&P made a $2 Trillion dollar error in their arithmetic:


    I’m pointing fingers at all parties involved: Obama, the S&P, the Koch-backed & Dick Armey-operated fake “Tea Party”, and the long-game GOP.

    Let’s not fall for a masterful bit of verisimilitude-in-surface-storytelling. This is all Kabuki Theatre.

    Posted by R. Wilson | August 7, 2011, 5:09 pm
  3. PIMCO CEO Mohamed El-Erian has a realpolitik prescription for the U.S., and a realpolitik narrative to impose on the S&P downgrade:


    These guys are quick to impose a narrative without asking questions.

    El-Erian’s storytelling would have us believe that “financial soundness of the U.S. government” is the central issue that affects the U.S. economy, but NOT private-sector bankster securities fraud, NOT SEC failure to regulate, NOT the deregulation that murdered Glass-Steagall, NOT the 1999 Gramm-Leach-Bliley Act or the (Phil Gramm) 2000 Commodity Futures Modernization Act, NOT the $1.4 Quadrillion-dollar unsoundness of the derivatives boom.

    One more time: Government debt is not the issue. Government debt is misdirection. Private sector deregulation & bank fraud is the cause of the economic crisis.

    Posted by R. Wilson | August 7, 2011, 8:06 pm
  4. I too have been contemplating lately the possibility of Obama’s presidency being one big intelligence operation with Obama being perhaps both a witting and unwitting participant or either/or. After the WSJ printed Karl Rove’s advice to Obama, Obama’s strategy changed to excatly that strategy advised by Rove for the Iowa primary. And he defeated Hilary Clinton there and that changed the course of his campaign. I wouldn’t leave out the possibility of blatant threats from the intelligence apparatus to bring pressure to bear on Obama. It is well known that Rove himself has made such blatant threats of harm and those threats have been carried out. Dave’s image of Obama’s white flag seems fitting here.

    Posted by Sandra | August 8, 2011, 3:26 am
  5. Norquist in action:


    A few days after this article Norquist clarified his stance and said that he in no way supported letting the Bush tax cuts expire and told Republicans not to give on this.

    Posted by Sandra | August 8, 2011, 3:55 am
  6. Reading a brief bio of Deven Sharma (President of the S&P) I saw exactly why the market tanked after the S&P downgraded the US, stripping it of the golden AAA rating for the first time ever.

    Wikipedia says: Sharma worked with manufacturing companies, Dresser Industries and Anderson Strathclyde. After that he joined Booz Allen Hamilton where he worked for 14 years and led its strategy, operations performance, sales and marketing, and global expansion engagements for service-, marketing- and information-intensive companies.

    He left the company as a partner and joined McGraw-Hill in 2002. He served as Executive Vice President of Global Strategy of McGraw-Hill Companies Inc., from January 15, 2002 to October 2006 and as Executive Vice President of Investment Services and Global Sales of Standard & Poor’s, from November 1, 2006. He was named president of Standard & Poor’s in August 2007.

    If that’s not enough of a lead for you, nothing is. Those three major names are tied to interesting events in the past and have a habit of sitting quiet ,watching and waiting to make their move. Sharma is obviously the point man of this “invisible hand group”, who will all sleep quite well tonight, and tomorrow…

    The faster we connect the dots and trace actions, the better. What we need is “Annonymous” hackers that could trace the financial and personal communications of inside players to get some proof and clarity.

    Posted by Coogan | August 8, 2011, 11:51 am
  7. Standard & Poor’s is a subsidiary of McGraw-Hill.

    It appears that the McGraw family are very, very old & close friends with the Bush family:


    Reading Between the Lines
    Stephen Metcalf
    This article appeared in the January 28, 2002 edition of The Nation.

    “…Both standardized testing and textbook publishing are dominated by the so-called Big Three–McGraw-Hill, Houghton-Mifflin and Harcourt General–all identified as “Bush stocks” by Wall Street analysts in the wake of the 2000 election.

    “While critics of the Bush Administration’s energy policies have pointed repeatedly to its intimacy with the oil and gas industry–specifically the now-imploding Enron–few education critics have noted the Administration’s cozy relationship with McGraw-Hill. At its heart lies the three-generation social mingling between the McGraw and Bush families. The McGraws are old Bush friends, dating back to the 1930s, when Joseph and Permelia Pryor Reed began to establish Jupiter Island, a barrier island off the coast of Florida, as a haven for the Northeast wealthy. The island’s original roster of socialite vacationers reads like a who’s who of American industry, finance and government: the Meads, the Mellons, the Paysons, the Whitneys, the Lovetts, the Harrimans–and Prescott Bush and James McGraw Jr. The generations of the two families parallel each other closely in age: the patriarchs Prescott and James Jr., son George and nephew Harold Jr., and grandson George W. and grandnephew Harold III, who now runs the family publishing empire.

    “The amount of cross-pollination and mutual admiration between the Administration and that empire is striking: Harold McGraw Jr. sits on the national grant advisory and founding board of the Barbara Bush Foundation for Family Literacy. McGraw in turn received the highest literacy award from President Bush in the early 1990s, for his contributions to the cause of literacy. The McGraw Foundation awarded current Bush Education Secretary Rod Paige its highest educator’s award while Paige was Houston’s school chief; Paige, in turn, was the keynote speaker at McGraw-Hill’s “government initiatives” conference last spring. Harold McGraw III was selected as a member of President George W. Bush’s transition advisory team, along with McGraw-Hill board member Edward Rust Jr., the CEO of State Farm and an active member of the Business Roundtable on educational issues. An ex-chief of staff for Barbara Bush is returning to work for Laura Bush in the White House–after a stint with McGraw-Hill as a media relations executive. John Negroponte left his position as McGraw-Hill’s executive vice president for global markets to become Bush’s ambassador to the United Nations…”

    Posted by R. Wilson | August 8, 2011, 5:50 pm
  8. Police raid Milan offices of Moody’s and Standard & Poor’s (S&P)

    As stock and bond markets across the world tumbled on fears about Italy and Spain, it emerged that police acting on orders from prosecutors had raided the Milan offices of rating agencies Moody’s and Standard & Poor’s as part of continuing investigations into their role in the recent financial turmoil.

    Italian shares plunged on Thursday, with some leading firms losing more than 10% of their value. But the closing level of the benchmark FTSE MIB index was not released for reasons that remained unclear more than an hour after the close.

    Among the factors behind the share fall was a widening of the risk premium on Italian state debt. The extra return demanded by investors for holding benchmark 10-year Italian bonds rather than the German equivalents touched 3.7 percentage points.

    Carlo Maria Capistro – chief prosecutor of Trani, a small Adriatic port – told Reuters that his office was checking to see whether the rating agencies “respect regulations as they carry out their work”. The raids took place on Wednesday as Italy’s prime minister, Silvio Berlusconi, addressed parliament on the mounting crisis.

    Article continues at:

    Note: Considering the boss of the Milan police is Berlusconi, another fascist & Bush associate, it may be premature to take this story at face value. Planting exculpatory evidence may not be far-fetched.

    Posted by R. Wilson | August 8, 2011, 6:04 pm
  9. http://www.bloomberg.com/news/2011-08-08/s-p-seen-surrendering-to-tea-party-at-expense-of-u-s-taxpayer.html

    S&P Seen Yielding to Tea Party at Expense of Taxpayer

    Standard & Poor’s, the rating company that downgraded the debt of the United States to AA+ from AAA for the first time, now finds itself assailed by investors led by billionaire Warren Buffett for making a political decision that has more to do with Tea Party politics than the financial stability of the U.S.

    S&P officials, shrugging off a $2 trillion calculation error, blamed “uncertainty” in the policymaking process on Aug. 5 when they cut the assessment of the U.S. government’s ability to pay its debt, citing Congress’s failure to agree on as much long-term deficit reduction as the credit-rating company wanted. Buffett, the world’s most successful investor, said S&P erred and the U.S. should be rated “quadruple-A.”

    The New York-based subsidiary of McGraw Hill Cos., whose inflated grades of mortgage-backed investments — paid for by the banks that created the toxic debt — were blamed by Congressional investigators for fueling the financial crisis, rattled investors around the world and provided fodder for President Barack Obama’s rivals in the 2012 elections. U.S. equity futures and global stock markets tumbled, oil sank and gold rallied to a record.

    “Clearly the ratings downgrade was a ‘political decision’ in the sense that the politics explained the timing of this, because the numbers have been irrefutable for a decade,” said Robert Litan, vice president for research and policy at the Kauffman Foundation in Kansas City, Missouri. “It gives an enormous amount of ammunition to the Tea Party. They said the deal didn’t go far enough and they’ll say ‘see.’”

    Posted by R. Wilson | August 8, 2011, 6:08 pm
  10. […] Dave Emory on S&P downgrade […]

    Posted by Right-wing useful fools: When Tea Partiers become Tea Baggers | lys-dor.com | August 9, 2011, 10:11 am
  11. Important context for the following news item:

    Robert Zoellick was named head of the World Bank in 2007. Zoellick was a longtime Bush crony & appointee. Zoellick was one of the original Neocons & signatories to PNAC (The Project for a New American Century) that called on Bill Clinton in 1997 to invade Iraq & remake the Middle East.

    Zoellick’s Wikipedia entry adds some interesting information: “Zoellick is considered an influential advocate of US-German relations. Fluent in German, he possesses considerable knowledge of Germany, the country of his family background.”

    In 2010, Zoellick published a noted call for the return of some form of gold standard in a post-Bretton Woods II world.

    Zoellick worked in BOTH Bush Administrations, was a managing director at Goldman Sachs, and “used his perch as U.S. trade representative to advocate for Wall Street’s policy goals abroad”. His various positions and duties under Poppy Bush & Junior are too numerous to mention.

    Yet he has somehow been “reborn” as a respected, “mainstream” economic voice, with considerable clout, despite his previous Neocon incarnation.



    World Bank says ‘more dangerous’ times ahead

    August 14, 2011

    Robert Zoellick says the European Union has not taken enough action on its debt trouble.

    World Bank chief Robert Zoellick has warned of a “new and more dangerous” time in the global economy, with little breathing space in most developed countries as a debt crisis hits Europe.

    Mr Zoellick says the eurozone’s sovereign debt issues are more troubling than the “medium- and long-term” problems which saw the US credit rating downgraded by Standard and Poor’s last week, sending global markets into panic.

    “We are in the early moments of a new and different storm – it’s not the same as 2008,” said Mr Zoellick, referring to the global financial crisis, in an interview with the Weekend Australian newspaper.

    “In the past couple of weeks the world has moved from a troubled multi-speed recovery – with emerging markets and a few economies like Australia having good growth and developed markets struggling – to a new and more dangerous phase.”

    People were in less debt than during the credit crunch and current events did not have the same “sudden shock” factor, but Mr Zoellick said there was less room to manoeuvre this time around.

    “Most developed countries have used up their fiscal space and monetary policy is about as loose as it can be,” he said.

    Mr Zoellick said the eurozone’s structure “could turn out to be the most important” challenge currently facing the world economy, with some hope for Spain and Italy but debt-crippled Greece and Portugal unable to devalue.

    European Union action taken to date falls short of what is needed, the World Bank chief said.

    “The lesson of 2008 is that the later you act, the more you have to do,” he said, questioning whether the troubled European nations could “ever get ahead of the problems that have plagued them.”

    Mr Zoellick also urged British prime minister David Cameron not to be deterred from austerity measures by recent riots – the country’s worst in decades – saying his spending cuts were “really necessary.”

    “My concern would be if the politics knocked them off course,” he said.

    Markets swung wildly this week on rumours of a French credit downgrade over the debt crisis, which started in Greece and is now fuelled by fears Spain or Italy might default, sparking a break up of the 17-nation currency.

    Investors are questioning whether France and Germany, the eurozone’s two largest economies, can continue to underwrite other states’ debts without losing their top credit ratings and falling victim to the crisis themselves.

    Mr Zoellick said power, influence and weight was shifting “very fast by historical standards” to developing economies led by China, but he described the Asian superpower was a “reluctant stakeholder” in the global system.

    Aside from tackling overheating, Mr Zoellick said Beijing faced a number of big domestic policy questions – keeping its industrialisation “green”, financial system reform, and the balance of state-owned firms with private enterprise.

    Allowing the yuan to increase in value would help curb inflation but also make foreign goods cheaper in China, a potentially sensitive issue.

    Beijing also wanted to increase social protections for its population but did not want a European welfare state model, Mr Zoellick said.

    “They say to me … it’s too expensive,” he said.

    Posted by R. Wilson | August 13, 2011, 11:35 pm
  12. http://business.financialpost.com/2011/10/23/u-s-likely-to-get-second-rating-downgrade-merrill/

    U.S. likely to get second rating downgrade: Merrill

    Reuters Oct 23, 2011 – 3:54 PM ET

    By Walter Brandimarte

    NEW YORK – The United States will likely suffer the loss of its triple-A credit rating from another major rating agency by the end of this year due to concerns over the deficit, Bank of America Merrill Lynch forecasts.

    The trigger would be a likely failure by Congress to agree on a credible long-term plan to cut the U.S. deficit, the bank said in a research note published on Friday.

    A second downgrade — either from Moody’s or Fitch — would follow Standard & Poor’s downgrade in August on concerns about the government’s budget deficit and rising debt burden. A second loss of the country’s top credit rating would be an additional blow to the sluggish U.S. economy, Merrill said.

    “The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan” to cut the deficit, Merrill’s North American economist, Ethan Harris, wrote in the report.

    “Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes,” he added.

    The bipartisan congressional committee formed to address the deficit — known as the “super committee” — needs to break an impasse between Republicans and Democrats in order to reach a deal to reduce the U.S. deficit by at least US$1.2-trillion by Nov. 23.

    If a majority of the 12-member committee fails to agree on a plan, US$1.2-trillion in automatic spending cuts will be triggered, beginning in 2013.

    Those automatic cuts, mostly in discretionary spending, would weigh further on a fragile U.S. economy, Merrill said. In the same report, the bank reduced its 2012 and 2013 growth forecasts for the United States to 1.8% and 1.4%, respectively.

    If there were a downgrade, it was not clear which ratings agency would move first.

    Moody’s Investors Service, which has a negative outlook on the United States’s Aaa rating, said it is looking at several other factors, including the results of presidential elections and the expiration of the Bush-era tax cuts late in 2012, to decide on the rating.

    “It’s not that we’re waiting just for this committee to decide on the rating,” Steven Hess, Moody’s lead analyst for the United States, told Reuters in an interview last week.

    Failure by the committee to come up with an agreement, he said, “would be negative information but it is not decisive in our view about the rating.”

    To be sure, Hess did not rule out the possibility of an early move on U.S. ratings if the country’s economy slips into recession. So far, however, the economic performance “is certainly not super positive but not a disaster either,” he said.

    Fitch Ratings, on the other hand, still has a stable outlook on its AAA rating on the United States, meaning it is more likely to revise that outlook to negative before actually downgrading the rating.

    In its latest report on the United States, Fitch says a ”negative rating action,” which could be only an outlook revision, could result from a weaker-than-expected economic recovery or by failure by the bipartisan committee to reach agreement on at least US$1.2-billion in deficit-reduction measures.

    Posted by R. Wilson | November 3, 2011, 9:14 pm
  13. Grover who?:

    A simple yes or no would have sufficed, but when House Speaker John Boehner was asked whether anti-tax crusader Grover Norquist was a positive influence on his caucus, he feigned ignorance.

    “It’s not often I’m asked about some random person in America,” he said.

    Posted by Pterrafractyl | November 3, 2011, 9:55 pm
  14. @R. Wilson: Good info. TBH, though, I say that S&P can go kindly f*** themselves with a hot branding iron after the stunt they pulled. And frankly, I’ll be quite happy to say the same for any other company pulling any similar shenanigans as well.

    Posted by Steven L. | November 4, 2011, 8:13 am
  15. @Steven L.: To translate the ratings agencies: “if you [via the Super-Committee] don’t throw grannie and jr. under the bus we’ll do it for you and we might not stop at grannie and jr.”.

    It’s grimly fascinating to watch a society’s leadership simultaneously gut its past (bye bye Medicare) AND future (bye bye public schools). It’s like it’s some sort of metaphorical attempt to conquer the passage of time.

    Posted by Pterrafractyl | November 4, 2011, 11:09 am
  16. @Pterrafractyl: Sad but true. I have a feeling we may have a rough decade or decade-and-a-half ahead of us…… =(

    Posted by Steven L. | November 4, 2011, 3:13 pm
  17. Zerohedge has an interesting post on a GOP debt trap likely to be sprung in the weeks leading up to the November elections, with a downgrade assist from S&P and Moody’s. September Surprise?

    US Debt Ceiling D-Day: September 14, 2012
    Submitted by Tyler Durden on 03/28/2012 – 17:39

    Earlier today, outgoing Treasury Secretary and tax challenged part-time pathological liar (see here) Tim Geithner said that any worries of the US debt ceiling are misplaced, and that at best such an event would occur “late in the year” (and to think the August 2011 extended $16.394 trillion debt ceiling was supposed to last well into 2013). Naturally, coming from Geithner, it meant this statement was a flat out lief the second it left his mouth, which is why we decided to do our own analysis of just when the latest and greatest debt ceiling would be breached. The answer is that at the current rate of debt issuance, which incidentally is going to accelerate sharply due to the recent extension of the payroll tax cuts which will require an incremental $100-150 billion total debt to be funded, and extrapolating future issuance solely on historical patterns, the US debt ceiling D-Day will be September 14, 2012. This means that there will be just over 6 weeks for the GOP to hijack each and every presidential debate before the November election with just this topic. Because there will hardly be anything more humiliating for Obama than to have to defend his platform even as the country is once again past the verge of insolvency, and forced to “commingle” retirement funds to keep Treasury operations running. Which incidentally is just as we predicted would happen when we explained why the GOP fast shelved the payroll tax debate so rapidly. It was nothing but a prelude to precisely this. Because once it is raised, and it will be raised of course, next up will be yet another ratings downgrade by S&P and this time, Moody’s as well. All of which will most likely happen before November.

    Posted by Pterrafractyl | March 28, 2012, 6:47 pm

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