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S&P Downgrades Fannie, Freddie, Others

First, from an unfazed Associated Press:

S&P begins downgrading credit ratings linked to US

By MARTIN CRUTSINGER – AP Economics Writer
August 8, 2011

WASHINGTON (AP) — Officials at Standard & Poor’s are downgrading the credit ratings of mortgage lenders Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt.

The agency says it has also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options.

Even after these agencies have been completely ‘reformed’ by Dodd-Frank? How is that possible?

All the downgrades were from AAA to AA+. S&P says the agencies and banks all have debt that is exposed to economic volatility and a further downgrade of long-term U.S. debt.

Officials at Standard & Poor’s say they will also indicate shortly how local and state governments will be affected by their decision on Friday to lower the long-term U.S. debt from AAA to AA+.

In other words, states could get downgraded, too. Funny, how the AP neglected to mention that detail.

And here is a bit more amplification from CNBC:

S&P Downgrades Fannie Mae, Freddie Mac, Others

Published: Monday, 8 Aug 2011

… Officials at S&P said they plan to indicate how local and state governments and insurers will be affected by the rating agency’s downgrade of long-term U.S. debt.

S&P officials told reporters Monday that the agency is looking at key sectors that are linked to the U.S. debt, and will announce "shortly" how those ratings might be affected.

The officials did not name any specific governments or insurance groups. But they said triple-A-rated insurance groups and state and local governments affected by possible consolidation of programs in Washington would likely be reviewed

The S&P earlier said that it thinks its sovereign ratings are robust and ahead of its rivals, and that it plans to continue that track record. It also noted that printing money doesn’t deliver a triple-A rating.

Don’t tell the Keynesians!

Still, isn’t it better that we all pay much higher interest rates and probably state and local taxes, than that we should even think about cutting government spending?

This article was posted by Steve on Monday, August 8th, 2011. Comments are currently closed.

6 Responses to “S&P Downgrades Fannie, Freddie, Others”

  1. Mae says:

    Yes, in the works since Marx first put pen to paper.

    Marx’s White House descendant has subconsciously planned for this downgrade since he first listened to Frank Marshall Davis and smoked his pot. Payback time has been The Dictator President’s psychotic necessity since childhood. Real and imagined grievances have fueled the need to destroy The Great Satan rather than improve it. 17 months until we’re rid of this @#%&* and if there still is a country to save by then, it will call for that “sacrifice” all Oby’s acolytes are always calling for, only without the phony tax increases but with deep, slashing cuts to all entitlements, governmental bodies and First Lady staffs.

  2. tranquil.night says:

    Psst, don’t look at California.

  3. untrainable says:

    What good does it do to downgrade Fannie and Freddie? No matter how irresponsible F&F practices are, they’ll never default because they have their own dedicated printing press at the mint. The real shame is that they will never be held to account the way Bernie Madoff was. F&F’s ponzi scheme makes Bernie look like a 5 year old with a lemonade stand. (Of course, Bernie would still be in jail for not having a lemonade licence)

  4. Mae says:


    That certainly did not receive any press/media space.

    The Dems certainly know how to spell disaster. Name one major state or city in the U.S. which is having deep financial troubles/poverty/welfare overloads/can’t-stop-the-spending syndrome that is not Dem-run.

  5. Nora says:

    Well, it’s all pretty f*&ked up but the good news is that it looks like Soros made 10 billion dollars betting we’d be downgraded. Thank G-d for Zanax.

  6. Mae says:

    Whatcha mean, Nora? Explain how it’s good news that Soros made 10 billion dollars! Hopefully you just made a typo. That Nazi collaborator who worked against Jewish survival, tried to bankrupt nations, spent millions on Kerry, and finally has found his soul mate in the White House, deserves not a drop of good news. His fortune is off the backs of decent people everywhere.

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