There is another manifestation of this double standard...
In the last 3 months 3 'conservative politicians" who vote against gay rights and similar issues have themselves been caught in grotesque, debaucherous behavior which displays their nakedness.
| 2007/11/1 3:27||Profile|
Is "AAA" Rating of U.S. Treasury Debt Sustainable?
The major U.S. credit rating agencies, S&P, Moody's and Fitch, issue credit ratings to sovereign states. The United States enjoys the top "AAA" rating, but that could change if the rating agencies apply their sovereign credit rating methodologies to the GAAP U.S. financial statements, instead of the gimmicked accounting accepted for decades.
As an example of part of the ratings approach, Fitch notes in its Sovereign Ratings Rating Methodology:
Sovereign borrowers usually enjoy the very highest credit standing for obligations in their own currency. If they retain the right to print their own money, the question of default is largely an academic one. The risk instead is that a country may service its debt through excessive money creation, effectively eroding the value of its obligations through inflation.
Such risks will come into play in the future article on possible hyperinflation. The question at hand is the top "AAA" credit rating held by the United States, home base of the U.S. dollar, the world's primary reserve currency.
In determining a sovereign rating, Fitch reviews, among other factors, "the orthodox indicators such as ratios of debt to exports and debt to Gross Domestic Product, providing a measure of the current and prospective ability to service debt."
The United States is the world's largest net-debtor nation, has the world's largest current account trade balance and has the highest level of debt or financial obligations ever seen, irrespective of relative measure, for any major country, by at least an order of magnitude.
As of August 2004, Fitch gave the "AAA" rating to only 15 countries, including the United States. The other 14 are Austria, Canada, Denmark, Finland, France, Germany, Ireland, Luxembourg, Netherlands, Norway, Singapore, Sweden, Switzerland and the United Kingdom. Of those 14, five ran budget surpluses in 2003, including Canada, Denmark, Finland, Norway and Sweden. The worst deficit as a percent of GDP was for France at 4.1%, followed by Germany at 3.5%. In contrast, the not-generally-recognized GAAP U.S. deficit in 2003 was 34.2%.
Similarly, the highest level of debt to GDP seen among the 14 other "AAA" countries is at 75.6% for Canada, followed by France at 71.1%, Germany at 65.1% and Austria at 64.9%, versus a GAAP ratio of total financial obligations to GDP of 334.3% for the United States. The low ratio among the "AAA" countries is Luxembourg at 4.9%.
Where most of the other "AAA" countries have significant unfunded social insurance liabilities that are not included in the debt-to-GDP ratios, consistent 2003 numbers are not available. As a rough estimate, the high ratios mentioned for Canada, France, Germany and Austria would increase by two-to-three times, still well shy of the U.S. extreme. The ratings agencies are well aware of these circumstances and have noted the generally deteriorating credit quality of the major Western economies, particularly the United States. S&P seems comforted by expectations that most countries "will step up their efforts to more effectively confront the fiscal ramifications of aging ..."
Of the 15 "AAA" countries, all but Austria, Ireland, the United Kingdom and the United States run current account trade surpluses. As a percent of GDP, the Austrian, Irish and U.K. trade deficits are 0.2%, 2.5% and 2.8%, respectively, versus 4.8% for the United States.
At "AA," two credit notches below the U.S. (two notches taking into account the AA+ between AAA and AA), sits Japan. Japan's deficit and debt levels as percentages of of GDP are 8.0% and 157.3%, respectively, worse than the "AAA" rated countries but still much better than the U.S. GAAP ratios. Japan also runs a current account surplus.
In searching World Bank data, I couldn't find any nation with a debt-to-GDP ratio worse than the United States' GAAP obligations ratio of 334%. The closest found is for the West African state of Guinea-Bissau at 224%, but Guinea-Bissau is not rated.
The twist here, of course, is the accounting method used in analysis. Based on the gimmicked, instead of GAAP, fiscal numbers, the U.S. deficit and debt ratios are a little high but relatively benign at 4.8% and 62.8%. Further, much more goes into a sovereign debt rating than the discussed ratios. Still, if any country but the U.S. had GAAP deficit and debt ratios of 34% and 334%, its debt most likely would be given junk-bond status by the rating agencies.
Accordingly, a case can be made that the risks of the United States "servic[ing] debt through excessive money creation" are high enough so as to be inconsistent with a "AAA" rating. Political practicalities, though, likely will forestall any formal downgrade of the U.S. credit rating. Since a downgrade would trigger global financial-market and currency turmoil, action even could be delayed until the last minute.
Nevertheless, Fitch had the United States on a negative rating watch in 1995, and there have been occasional rumblings by S&P and Moody's when Congress has been slow to authorize raising the ceiling on federal borrowing limits. Minimally, a shift to a negative rating outlook by one or more of the major rating agencies is not out of the question.
Irrespective of any credit rating actions, the credit markets usually catch up with underlying reality. That suggests there will develop a long-term higher floor under U.S. interest rates than has been seen previously.
end of article...
My question to all...if those who lead are unfaithful in this area, is there any reason to trust the leaders of this generation with anything else?
| 2007/11/2 0:54||Profile|
Below is an example of another double standard. We only hear of the "subprime" problem. But if you look closer, the real problem is that the comercial paper market that corportations use to finance short term debt is not functioning. So Paulson and Benanke lowered the interest rates and printed large sums of money to save their friends on Wall Street. What does that mean for common folk? The value of the dollar is dropping, therefore the cost of everything we buy is going up.
Paulson's Focus on Subprime `Excesses' Shows His Goldman Gorged
By Mark Pittman
Nov. 5 (Bloomberg) -- Treasury Secretary Henry Paulson says the U.S. is examining the subprime mortgage crisis to ensure that ``yesterday's excesses'' aren't repeated. He could be talking about himself and his former firm, Goldman Sachs Group Inc.
Paulson, 61, doesn't mention that Goldman still has on the market some $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was chief executive officer. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.
Goldman, the most profitable investment bank, was one of 14 primary dealers of U.S. Treasuries who contributed to a three- year binge as $1 trillion of subprime mortgages were packaged and sold to investors. The value of its remaining subprime bonds trails Lehman Brothers Holdings Inc.'s $33 billion, out of $106.8 billion created during Paulson's years at Goldman, and Morgan Stanley's $28.8 billion, out of $82.5 billion.
``He should admit to having been involved in creating the problem that we have now,'' said Representative Brad Miller, a North Carolina Democrat, who introduced a bill Oct. 22 to make firms packaging subprime mortgages liable for bad loans in some circumstances.
The subprime crisis developed earlier this year when falling home prices triggered defaults by homeowners who wouldn't have normally qualified for a mortgage. Many were unable or unwilling to make adjustable-rate payments that were due to rise. Home foreclosures doubled in the third quarter from a year earlier to 635,159, RealtyTrac reported Nov. 1.
Starting in March, Paulson said the damage was ``largely contained'' and was no risk to the larger economy. When other credit markets began to be affected, he and others began pushing for solutions.
``I can't help but notice that when middle-class homeowners were losing their homes to foreclosure, he was pretty nonchalant about it,'' Miller said of Paulson. ``But when Wall Street CEOs start seeing trouble in their absurdly complicated financial instruments built on the mortgages of middle-class homeowners, he feels their pain.''
Paulson declined to comment through spokeswoman Michele Davis, who said, ``he can't talk about Goldman business.'' Spokesman Michael DuVally of New York-based Goldman declined to say how much subprime mortgages contributed to the investment bank's profits, or Paulson's compensation, during his tenure from May 1999 through June 2006.
Goldman paid Paulson $38.5 million for 2005, and he received an $18.7 million bonus for the first half of last year.
Bet Against Subprime
While competitors reported losses from their subprime portfolios in recent months, Goldman said Sept. 20 that it profited from the market's decline by using derivatives to bet that mortgage securities would continue to fall.
Paulson's involvement in the subprime crisis ``points out that there needs to be complete accountability up and down the system,'' said Allen Fishbein, the director of credit and housing policy at the Consumer Federation of America in Washington. ``Goldman wasn't alone. All the brokerages did this.''
Goldman ranks 10th among 118 issuers, based on the amount of subprime loans still on the market. Bonds with a face value of $484.6 billion remain from those created in the years Paulson ran Goldman.
Market leader Countrywide Financial Corp. has $40.7 billion in subprime bonds still on the market, or 8.4 percent of the total. GMAC LLC's Residential Capital LLC has $34.4 billion. Lehman's $33.1 billion leads Wall Street firms.
Calabasas, California-based Countrywide, the nation's biggest home lender; ResCap, the Minneapolis-based home lending arm of General Motors Corp.'s finance subsidiary; and Goldman were among those competing to create pools of mortgages consisting mostly of subprime loans, made to borrowers with poor credit records or high debt.
Goldman has more subprime debt outstanding than Credit Suisse, which has almost $10 billion; Citigroup Inc., with $6.8 billion; or JPMorgan Chase & Co., with $7.8 billion.
The data on subprime bonds, compiled by Bloomberg from reports by debt servicing companies, don't include all of the mortgage bond offerings managed by any of the firms. That's because all of them handle offerings by bond issuers outside of Wall Street, including Irvine, California-based New Century Financial Corp., a subprime lender now in bankruptcy.
The House bill Miller introduced is backed by Representative Barney Frank, the Massachusetts Democrat who is chairman of the Financial Services Committee. One provision would make firms that package and sell subprime mortgages liable for damages if loans violate certain minimum standards, including ensuring a borrower's reasonable ability to repay.
Paulson criticized the liability idea in an Oct. 16 speech at Georgetown University in Washington.
``We need to ensure yesterday's excesses are not repeated tomorrow,'' Paulson said. Penalizing Wall Street for packaging mortgage loans ``is not the answer to the problem,'' he said.
The House measure would ``potentially paralyze securitization,'' which, Paulson said, has been ``extremely valuable in extending the availability of credit to millions of homeowners nationwide and lowering the cost of financing.''
In New Delhi on Oct. 30, Paulson repeated his pledge to find what went wrong in the financial system. ``We need to shed light on it and make the policy adjustments so this doesn't happen again,'' he said.
When the subprime mortgage issue exploded as an economic and political issue this year, Federal Reserve Board Chairman Ben S. Bernanke was the federal government's point man. He was called before Congress to defend regulators' failure to prevent lending abuses.
Paulson's public role increased in the past month as the credit crunch spread to the commercial paper markets and off- balance-sheet structured investment vehicles, known as SIVs. He urged major lenders in a Sept. 12 meeting in Washington to help subprime borrowers keep their homes.
Paulson and Robert Steel, a former Goldman Sachs vice chairman who is the Treasury's undersecretary for domestic finance, helped persuade Citigroup and other banks to set up an $80 billion partnership to buy assets from any SIVs that couldn't refinance their debt.
Goldman under Paulson created 58 mortgage pools branded under the acronym of GSAMP, which originally stood for Goldman Sachs Alternative Mortgage Products, starting in July 2002. The value of the loans at risk of default is almost 50 percent for one Goldman pool, according to Bloomberg data, which includes pools identified as containing home equity financings as well as subprime mortgages.
The average delinquency rate for subprime bonds sold from May 1999 through June 2006 is 19.3 percent as of yesterday, according to data compiled by Bloomberg. Among the top 20 issuers that have more than $5 billion outstanding, Goldman's GSAMP ranks ninth with 21.7 percent for delinquencies of 60 days or more, foreclosures or real estate that has been taken away from borrowers.
That rate is higher than for JPMorgan, with 20.8, and Citigroup, with 19.9 percent, according to data compiled by Bloomberg through October. Goldman's delinquency rate is lower than the 26.2 percent for bonds in Deutsche Bank AG's ACE trust, as well as 25.1 percent for Barclays Capital's SABR and 23.8 percent for Merrill Lynch's MLMI.
One of Goldman's bonds, GSAMP 2006-HE2 B2, is valued at 47 cents on the dollar, to yield 14.5 percent, according to Merrill Lynch. The pool, which was sold March 1, 2006, already has a delinquency rate of 16.4 percent. The bond was cut five levels from investment-grade Baa2 to a junk rating of B1 on Oct. 11 by Moody's Investors Service.
| 2007/11/5 1:14||Profile|
Here is an example of how foreigners are starting to demand payment in something other than U.S. dollars...we most of us in the U.S. are oblivious to what is occuring...don't depent on our leaders to tell you the truth...
Supermodel 'rejects dollar pay'
The model reportedly demanded euros for a Pantene advert
The world's richest model has reportedly reacted in her own way to the sliding value of the US dollar - by refusing to be paid in the currency.
Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength.
The Brazilian, thought to have earned about $30m in the year to June, prefers to be paid in euros, her sister and manager told the Bloomberg news agency.
However, Ms Bündchen, 27, declined to comment on her pay arrangements.
Last week the dollar hit an all-time low against the euro, the British pound and the Canadian dollar.
According to Brazil's weekly magazine Veja, when Ms Bündchen signed a deal to represent Pantene hair products, she demanded that the brand owner, Proctor & Gamble (P&G), paid her in euros.
P&G was reported as saying that it could not comment on details of the contract.
There are also reports that she will be paid in euros for a deal with Dolce & Gabanna to promote its The One fragrance.
"Contracts starting now are more attractive in euros because we don't know what will happen to the dollar," Patricia Bündchen told Bloomberg.
Last month, billionaire investor Warren Buffett said that he was not confident about the strength of the dollar.
"We are still negative on the dollar relative to most other currencies so we bought stocks in companies that earn their money in other currencies," he said of his Berkshire Hathaway investment vehicle.
And last week, Jim Rogers, a former investor partner of George Soros, said that he was selling his home and all his possessions to buy Chinese currency, the yuan.
The dollar has slipped amid US interest rate cuts which have been trimmed to 4.5% after standing at 5.25% in September.
This means that investors are looking to buy other currencies that will give a higher rate of return.
end of article
| 2007/11/5 6:51||Profile|
Our nation is beginning to reap what it has sown...
Dollar Slumps to Record on China's Plans to Diversify Reserves
By Agnes Lovasz and Stanley White
Nov. 7 (Bloomberg) -- The dollar slumped to a record low against the euro after Chinese officials signaled plans to diversify the nation's $1.43 trillion of foreign-exchange reserves in response to a falling U.S. currency.
``We will favor stronger currencies over weaker ones, and will readjust accordingly,'' Cheng Siwei, vice chairman of China's National People's Congress, told a conference in Beijing. The dollar is ``losing its status as the world currency,'' Xu Jian, a central bank vice director, said at the same meeting.
The dollar fell against all 16 of the most-active currencies, declining to the weakest versus the Canadian dollar since the end of a fixed exchange rate in 1950, a 26-year low against the pound and a 23-year low versus the Australian dollar.
``The main reason for the very sharp move is the comment that China could further diversify out of dollar holdings,'' Teis Knuthsen, the Copenhagen-based head of foreign-exchange, fixed- income and derivative research at Danske Bank A/S, the Nordic region's second-biggest lender. ``Further weakening of the dollar is very likely.''
The U.S. currency slumped to $1.4704 per euro, the lowest since the 13-nation currency debuted in January 1999, before trading at $1.4682 as of 9:48 a.m. in London, from $1.4557 late yesterday. The dollar traded as low as 113.32 yen, the lowest since Oct. 22. The euro fell against the yen to 166.45 yen, from 166.99 yesterday.
Traders said the declines in the dollar accelerated after the euro fell below key levels where sell orders were placed.
The dollar also fell to an all-time low against the synthetic euro, a theoretical value that estimates where the currency would have traded before its inception. The prior record was $1.4557 set in 1992.
The U.S. currency may weaken to between $1.48 and $1.50 against the euro by year-end, Knuthsen said.
Chinese investors have reduced their holdings of U.S. Treasuries by 5 percent to $400 billion in the five months to August. China Investment Corp., which manages the nation's $200 billion sovereign wealth fund, said last month it may get more of the nation's reserves to invest to improve returns.
U.S. 10-year Treasury notes rose today on speculation a two- day increase in yields will attract investors at a $13 billion sale of the securities today.
``The world's currency structure has changed; the dollar is losing its status as the world currency,'' Xu from the People's Bank of China said at the conference. Cheng, speaking to reporters after his speech, said his comments don't mean China will buy more euros. The National People's Congress, China's legislature, isn't involved in setting currency policy.
In order to save the princes of Wall Street, the people will pay more for less....
| 2007/11/7 6:11||Profile|
IN HEAVENLY PLACES WITH JESUS
| Gas costs, falling dollar and Joe and Jane Blow|
Greetings in Jesus' Name bro Jeff by Whose Blood we are Saved.AMEN.
i was just perusing a message board on msn which had to do with the rising gas costs. interestingly, quite a few people are peeved by it and some are concerned that a depression is looming given the drop in the dollar and the failiure of the govt to prop it up. the rumblings of the Chinese diversifying their currency holdings are unsettling at best or a harbinger of the unthinkable at worst. if you remember, i believe our Lord spoke to me about 2.5 yrs ago concerning the collapse of the economy some time before this year is out which would be part of the undoing of our nation as we know it. there are 64 days left and the enemy from time to tme will try and have me believe that nothing will happen, yet i believe i hear our Lord saying "all I need is one day." i have been mulling that over, that in a day the unthinkable will come to pass...the dow slid 361 pts today. The Wall Street princes as you said keep talking the stock market up and the average Joe isn't really benefitting directly from this and people, perhaps few in number are getting fed up with the pillaging. in the time of unrest which will follow the economic collapse and the falling of fire from the sky on our cities of New York and D.C. i wouldn't be surprised if bank bosses get strung up by angry people who lost their shirts...
may those of us who have put all hope in God gird ourselves and not be found wanting. God is good to those whose hope is in Him.AMEN.
Grace and Peace are ours in Jesus.AMEN.
| 2007/11/7 21:31||Profile|
Loveland, Co. USA
| Re: Double Standards|
Hi Rookie, I'm sure you are not surprised by all of this are you? Opening "markets" has always been the secret mantra of the capitalists in the usa.
Have you ever read Howard Zinn's "The People's History of the U.S."? Fascinating stuff. I believe that the chickens are coming home to roost.
Nice to see some of this type of material on this web-site.Thanks....c
Charles H Holston
| 2007/11/7 21:58||Profile|
Brother Charles wrote:
I'm sure you are not surprised by all of this are you?
For some time there been some here on SI saying, Awake you sleepy Christians...there is a spirit of Balaam that permeates much of what we call Christianity in America today...
The Scriptures also declares what God finds evil in this world.
13 For everyone who partakes only of milk is unskilled in the word of righteousness, for he is a babe. 14 But solid food belongs to those who are of full age, that is, those who by reason of use have their senses exercised to discern both good and evil.
Only the love of the truth can save us from the deceptions cast upon this world by Satan.
Your brother in Christ
I read Zinn's book a long time ago. He is a devoted humanist. He only see part of the truth...
| 2007/11/8 1:23||Profile|
Brother Charles asked about Zinn,
I couldn't find the list for all who have the Humanist Manifesto. The page was no longer available. But Howard Zinn and Noam Chomshi have written for this publication....
In the Manifesto it asks this question to those who are reading it...
"How to Decide Whether You are a Humanist
Have you been a humanist, perhaps without even knowing it? To help you make up your own mind we offer the following guidelines:
(1) Do you believe that we will continue to learn more about the past, present, and future of planet earth and its inhabitants?
(2) Do you believe that humans are a part of nature and that there is no God or supernatural power especially concerned for their welfare?
(3) Do you believe that religions' sacred scriptures and ethical and moral systems were the creations of mortals and that these have served different purposes at different times and places?
(4) Do you believe that the kind of life we live and the helpful and just relationship that we have with other humans is of primary importance?
(5) Do you feel that our environment needs to be taken care of and protected for future generations?
(6) Do you frequently experience joy and comfort and an undefined mystic sense from the realization that you are a part of nature and of all that lives?
(7) Do you believe that the meaning of life is that which we give to it?
(8) Do you recognize that many philosophical questions such as, "What is the meaning of life?" and "Why am I here?" are irrelevant when our existence and experience are viewed as processes within the totality of nature?
If you answer "yes" to most of these questions you can classify yourself as a humanist, for you view humankind in naturalistic and humanistic terms. You have faith in our future here on earth and believe the highest goal for human endeavor is a better world for all.
Are you willing to consider new evidence of any kind and in every field of human thought and behavior, even though this may lead to a revision of some of your most cherished beliefs? We cannot see how anyone who is consistent in belief in a theistic religion or a non-naturalistic philosophy would be able to answer this in the affirmative. Humanists can."
Just a thought...
your brother in Christ
| 2007/11/9 4:02||Profile|
Ron Paul to Benrnake: Instead of looking at the prices the consumer prices, which nobody in this country really believes - we need to talk about the distortion, the mal-investment, the misdirection, the bad information that is gotten from artificially low interest rates. In many ways, some people refer to you as a price-fixer, you know, because you fix interest rates. The market is powerful and usually overwhelms and does come into play, but when the Fed fixes an interest rate at 1%, that is price fixing.
Ron Paul to Bernanke: The bubble has been burst. We saw what happened after the NASDAQ bubble burst. We dont ask how it was created. And then we a housing bubble and its deflating and its spreading. And yet, nobody says, Where does it come from? And what is the advice that you generally get, and that is, ---inflate the currency. They dont say, ---Inflate the currency. They dont say, --- Debase the currency. They dont say, --- Devalue the currency. They dont say, Cheat the people who have saved. They say, Lower the interest rates. But they never ask you, and I dont hear you say too often, The only way I can lower interest rates, is I have to create more money. I have to lower the discount rate. I have to make it generous. I have to increase reserves. I have to lower the interest rates and fix the interest rates, over-night rates. The only way you can do this, is by increasing the money supply. I see this as the problem that we dont want to talk about.
Ron Paul to Bernanke: When we create money out of thin air. We have no savings and yet, theres so-called capital, theres money available, but it comes from what you have to do and the pressure is put on you. So, I think we have to get back to the very fundamentals of where this problem comes from. The bubbles occur when we have this mal-investment and the creation of new money.
Ron Paul to Bernanke: How can you do this and pursue this, the policy you have, without further weakening the dollar. There is a dollar crisis out there and peoples money is being stolen. People who have saved, theyre being robbed. I mean, if you have a devaluation of the dollar at 10%, people have been robbed of 10%. How can you pursue this policy without addressing the subject that, somebody is losing their wealth because of a weaker dollar and its going to lead to higher interest rates, and a weaker economy. -- If youre retired and elderly and you have CDs and their cost of living is going up no matter what your CPI says. Their cost of living is going up and theyre hurting and thats why people in this country are very upset.
| 2007/11/14 0:19||Profile|