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●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
If you never read my blog post: More on (moron) the S&P downgrade of American national credit,
or my blog post: S&P downgrades itself,
you absolutely must read this article: S&P’s Public Relations Nightmare
July 12th, 2013, Jonathan Weil
The (court) argument S&P made was that company statements extolling the objectivity, independence and integrity of its ratings are only “puffery” and that a reasonable investor wouldn’t depend on them.
After S&P cut Italy’s sovereign-debt rating this week, the website Zero Hedge posted a copy of the company’s report under the heading “Full ‘Puffery’ Statement.” Another blogger joked that S&P stands for “Snake-oil & Puffery.”
If you are an investor, relying on S&P and other rating agencies to guide you to the safest investments, my question is: Why?
I ask the same question of all stock brokers. (I already have written to my broker, Schwab, asking why they show S&P ratings for their bonds. I’ll let you know if/when they answer. Meanwhile, you should ask your broker the same question.)
And as for you media experts who loudly have bemoaned the rating reductions of U.S. government debt — what do you say now?
[Meanwhile, I have a new business model: If you want a good rating from someone who will charge you less than S&P, contact me. For just a few bucks, I’ll to give you an AAA rating. It will be as accurate as those high ratings S&P gave to worthless mortgage debt.
As for my new business: I give it an AAAA+ rating.]
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone. Click here
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
4 thoughts on “S&P admits its claims of objectivity and independence are “puffery.””
It’s actually a shame S&P has sullied their reputation giving out high ratings, or withholding them, for a fee. Their classic index – the S&P 500 – is actually something quite valuable as a benchmark. This week’s Business Week’s cover story (with it’s phallic cover: http://www.huffingtonpost.com/2013/07/11/businessweek-hedge-fund-cover_n_3579350.html) about how hedge funds on average under-performed the lowly S&P index 8 out of the last 10 years, while collecting millions, or even billions, in fees, ought to remind every serious investor that beating the market with “special knowledge” is a mug’s game. Perhaps S&P should read it too.
The S&P….so few with so much control….sound familiar?
Those who invest in the criminal financial sector are complicit with them in the destruction of this nations society, environment and economic system. Like the great mr. mosler, they wish to have their cake and eat it too.
once again it’s the S&P minority with all the power to decide what’s right for the rest of us.