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S&amp;P’s Ill-Advised Downgrade<br /> Ushers in Buying Opportunities

by | published August 8th, 2011

A number of years ago, Standard & Poor's (S&P) gave me a desk in one of their offices on Wall Street. In those days, I was providing energy analysis for a short-lived S&P publication called Emerging Global Markets.

Never felt comfortable in that office. Actually, whenever possible, I avoided going there.

What happened this past weekend reminded me why…

S&P's horrendous decision Friday afternoon to lower the U.S. credit rating has rattled global markets, returning Wall Street to negative territory this morning.

Jack Bogle, the legendary founder and former CEO of the Vanguard Group, calls S&P “the gang that can't shoot straight.” I think this is an apt way to label a disgrace masquerading as a ratings agency.

You see, these are the same guys whose “advice” was regularly dismissed as almost laughable during the subprime mortgage debacle. The same greedy goons who made considerable money slapping triple-A ratings on collateralized mortgage obligations, directly contributing to a worldwide credit crisis.

Seems the opportunity to make 400% or more in fees over regular ratings decisions was too much for them to pass up. Forget that they barely reviewed the packages, never rated the underlying paper, and never understood them anyway…

Ratings agencies do not make money by downgrading countries. They make money by rating paper issued by companies. And for that, they need to be visible.

Well, judging by the fact that nobody of consequence at the 55 Water Street headquarters is answering the phone this morning, S&P got the visibility it so badly wants.

The downgrade is essentially a political lecture to Congress.

It's just hard to appreciate when it's delivered by the clowns who cavalierly missed the single biggest credit mess in memory… one their ratings activities were centrally complicit in.

What's Next?

There will now follow a series of other downgrades required by the move on the U.S. sovereign rating, almost certainly beginning today with the clearinghouses that deal in that debt.

U.S. Treasury Secretary Timothy Geithner was absolutely correct on this one, when he said S&P showed “terrible judgment.”

The other two ratings agencies – Moody's and Fitch-ICBA – have put the focus where it belongs.

A ratings downgrade decision more properly takes place after the 2012 election. With the new debt ceiling in place and a partial Congressional roadmap set up to begin addressing the budget problem, there must be time provided to see what happens.

Instead, the S&P honchos prejudged the issue entirely.

Almost makes you wonder whether they have some vested interest in the money currently being made by broadly shorting the market… After all, I suspect they could make some money rating synthetic paper cut on those maneuvers as well.

And then there is the ongoing debt contagion mess in Europe. This is actually the more pressing of the problems.

The European Central Bank, to be followed by the European Investment Bank and a range of national and commercial institutions, will now begin buying sovereign debt again from Greece, Italy, Portugal, and perhaps Spain.

In response, the market decline today is par for the course. Given the forward concerns over demand, debt concerns on both sides of the Atlantic are moving oil prices down more than the market as a whole.

And Where Does That Leave Us?

I repeat the advice I gave you last week (see “The Morning After,” August 5): We stay the course and move as soon as trading stabilizes.

This is a seriously oversold market.

Since there are no further shoes to drop after the downgrade, we will begin to see some amazing buying opportunities emerge later this week, along with options plays providing risk protection.

This is the result of the last three trading sessions… Over 40 of the stocks on my “Trigger List” are at least 20% below fair market value.

[Editor's Note: Kent's “Trigger List” is where he keeps the stocks he's analyzing before they're ripe to recommend to his subscribers. Currently, there are more than 50 stocks on the list. One of them he's recommending his Energy Advantage subscribers buy right now. Click here to learn more.]

Once again, the market reaction to the turmoil has depressed forward estimates of energy demand. That, in turn, has further drive down sector share values.

Yet, on a global basis, the demand itself remains.

That means this is a psychological reaction, not a data-driven one.

And that means you could be making some significant money once the dust clears.

Sincerely,

Kent

Please Note: Kent cannot respond to your comments and questions directly. But he can address them in future alerts... so keep an eye on your inbox. If you have a question about your subscription, please email us directly at customerservice@oilandenergyinvestor.com

  1. Robert Page
    August 8th, 2011 at 12:49 | #1

    Ratings downgrade was long overdue. When you do what’s right, the timing is irrelevant. Significant pain now or excruciating pain later.

  2. J. Curtis
    August 8th, 2011 at 12:50 | #2

    Gold is going up and up and up, yet gold mining stocks follow the market down. Why doesn’t the market recognize that most (perhaps not all but most) gold mining stocks represent huge gold reserves in the ground which increase the value of these companies astronomically

  3. jack gordon
    August 8th, 2011 at 12:56 | #3

    S&P expressed irritation over the lack of adult supervision in the u.s. house of reps. – brinkmanship they called it.
    well the t baggers did hold the u.s. voting public hostage to their irresponsible demands.
    november 2012 is payback time – public are you listening?
    guess S&P should have waited 24 hrs before venting steam.
    > jack

  4. RJD
    August 8th, 2011 at 13:07 | #4

    Sorry to see you have become a shill for the Obama regime. The downgrade was long overdue and a coureageous act by S&P. When you continue to pile up debt at a far faster rate than you can service it, a downgrade is inevitable and correct. Your decision to call it “ill advised” makes me question your financial judgement on all matters.

  5. Robert Page
    August 8th, 2011 at 13:10 | #5

    What demands, Jack? There wil be no spending cuts. The day after the new debt ceiling was signed into law, the national debt rose by $240 billion! It’s all a farce. And, for your information, Democrats have controlled Congress since 2007 – adding $4.8 trillion (or 35%) to the national debt in only four years. Direct your rage to where it belongs.

  6. Andy Starostecki
    August 8th, 2011 at 13:15 | #6

    I think your analysis is compelling, and am sorry to see people getting mad because you have a certain opinion about the downgrade. The important thing for your readers is to discern where the profitable opportunities lie. None of us is a policy-maker.

  7. R Clark
    August 8th, 2011 at 13:20 | #7

    “The fact that we are here today to debate raising America’s debt limit is a sigh of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increaseing America’s debt waekens us domestically and internationally. Leadership means that, “the buck stop here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our childer and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better” Senator Obama March 2006 Looks like the same old BS. S&P’s timing might have been wrong, by about 5+ years. Why would anyone trust anyone in the rating brotherhood?

  8. August 8th, 2011 at 13:21 | #8

    @jack gordon
    Jack are you blind to the fact that were it not for the Tea Party
    memebers in the House, there would not have been a discussion about the nation’s debt level at all? In addition, the House did pass “Cut, Cap and Balance”, which would have passed muster at S&P and it was pronounced “DOA” by the Democrat Senate Majority Leader. Where were the adults indeed?

  9. ST
    August 8th, 2011 at 13:31 | #9

    Very disappointed in your political rant. I disagree with you 100%. The downgrade should have come the day after Obamacare passed. And, whatever happened to those “TEXAS-SIZED RICHES” we were promised in your original promotional material ?

  10. Drew
    August 8th, 2011 at 13:43 | #10

    S&P hasn’t been perfect – but the facts are what they are.
    If you count current debt, GSE committments and unfunded liabilities, our debt-toGDP ration is 550% Greece is at 130%!
    BO talks to the nation, what doe he do?, he spews more of the same – tired policy and sorely misplaced digs against his competition
    He can’t blame BUsh anymore, he can’t run on his record so blame teh Tea Party! How sad…

  11. FG
    August 8th, 2011 at 14:04 | #11

    @RJD

    I AGREE 100% ! The gov has been WRONG for a long time ! Now WE are
    having to pay for it.

  12. Peter J R Holt
    August 8th, 2011 at 14:09 | #12

    yes of course the downgrade was necessary even if a guy that calls himself Dr instead of just putting Phd after his name and has to sell a news letter to make ends meet doen’t think so

  13. August 8th, 2011 at 14:26 | #13

    The stock market obviously thinks we are heading into a global recession. We’ll see if the market is right or just paranoid. The 1135 target of the head and shoulders pattern on the S&P was hit today. I suspect we are near an excellent buying opportunity.

  14. P Tesch
    August 8th, 2011 at 14:57 | #14

    We have hit a number of our trailing stops in the Energy Advantage portfolio so I sold those but haven’t heard a word about this from Kent. On another note, I hope there are many more t baggers elected. Some people are addicted to alcohol and drugs this president is addicted to spending. Wish we could send him off to rehab before he does anymore damage.

  15. George
    August 8th, 2011 at 15:15 | #15

    And whose paper do they grade? Why, financial institutions of course. Who got hurt after the mortgage meltdown? Why, the financial institutions of course (If, you called being fined a few million dollars as being hurt). What happens now? According to the “talking heads,” interest rates on mortgages, car loans and credit cards will go up. Who benefits from this? Why, the financial institutions of course.

    Oh, and as with the mortgage meltdown, who, after all is said and done, will make the most money from the market collapse? Why,the big financial institutions and hedge funds that had “shorted the market,” same as last time. (Except for perhaps one or two sacrificial lambs) And once they had covered their short positions (while recommending some of the same stocks they had shorted), the market recovered, did it not? How much are you willing to bet that we will soon be reading the next Chapter in this saga where the same players will be praised for “figuring it out first.” Only one problem, they control the market.

  16. Don Merriman
    August 8th, 2011 at 15:17 | #16

    Standard and Poors judgment call on National Debt was wrong, Never once has there been any referance to Assets virsus debt, nothing but national debt. A true financial statement reflects the value of U.S. Government assets that have been paid for by taxpayer for many many years. The people(taxpayers) own Bureau of Reclamation dams,Many large power producing Dams, airports, highways, many millions of aces of Forest Service and other Federal land. Much of that has millions of acres of timber and has huge reserviors of oil underneath them. What about our ships and military equipment. Try putting replacement value on the above mentioned and readers will get a differant picture. S&P bought right into the line promoted by the richest 4 percent of the worlds population as well as the, T__ party know it alls, that are playing this for all it is worth. Election 2012 will be soon be here. Fear drives the market and as well as good news. I’m a 88 year old retired farmer, I remember well Franklin Rosevelt rally call as we entered WW2, we have nothing to fear but fear itself. Lets all take a deep breath and relax a bit. Try the Serenty Prayer, change what you can and ask for guidance to know the differance between those things you can change and the things we have no contro of. S&P does not have a very good track record so be careful when you listen and act on their judgment.

  17. Phyllis
    August 8th, 2011 at 15:21 | #17

    @RJD

    ME TOO!

  18. Bob
    August 8th, 2011 at 15:22 | #18

    Come on Kent;
    Blaming Standard and Poors is tantamount to blaming the referee for the score.
    If the S&P didn’t do its job in the fanny and freddy debacle they sure did it Friday. So sober up or do what you must to start making sense because your Liberalism is showing.

    Plenty of Blame to go round but But for those who can do simple math Obama is running up debts into uncharted waters to a complete precedence of history.
    Obama and his entourage are completely foreign to any concept of private industry and indeed have continually defamed and interfered with the healthy course this nation must take back to any semblance of fiscal sanity.
    May God have mercy on what America is becoming.
    Is it true that someone finally had the guts to issue an Arrest warrant for Barny Franks, Chris Dodd and Chuck Schumer ????

  19. W Smith
    August 8th, 2011 at 15:25 | #19

    Well Dr. Moors that was strike one. I thought you were kidding right up to “Sincerely Kent”.

  20. Joel
    August 8th, 2011 at 15:33 | #20

    With military spending comparable to the amount spent by the entire rest of the planet we can’t look at military spending OR return revenues , as a percentage of of GDP, to what it was before the two wars.? The Tea party is certainly part of the problem and has been since the Bush cuts were re-upped. A booming business environment is the third ingredient that with cuts and revenues will pull us out. Pass the nat gas act and get out of the way! href=”#comment-4389″>@Robert Page

  21. Perry
    August 8th, 2011 at 15:40 | #21

    If the The US werein such bad financial condition the market would not be there for our Bonds. Folks would move to French debt, or some other AAA rated country. But the only thing up in todays market was Gold and T-bills. The markets have decided that S&P and the Tea Party are wrong about the US financials. It is apparant to anyone willing to look. Don’t kill the messenger because your political philosophy proved wrong, Dr. Moors is right. The demand did not disappear over the week end. Reality is that many of the so called Socialist countrys like France, Norway, Sweden etc. have largly avoided all of the pain that we have enjoyed the past few years. Even with their very high tax rates and extensive social programs they enjoy a higher standard of living and higher per capita income along with stable currency and high employment. I am not saying we need to copy them, but we sure need to reconsider where we place the blame for our problems.

  22. Richard P
    August 8th, 2011 at 15:43 | #22

    In the last Oil & Energy Investor Dr. Moors said to watch the PowerShares Dynamic Oil & Gas Services Portfolio ETF(PXJ) for the broader move coming. Looking at Vector Vest PXJ it was down today 10.74% or $2.31. Vector Vest now recommends a sell on PXJ as the current $19.19 stock price is now below the Vector Vest stop of $20.94. Until I see Vector Vest indicators turning positive(Green) I will buy no existing, or current recommendations from either Energy Advantage or Energy Inner Circle. The market is making a series of lower lows and lower highs.
    Watch you back fellow investors. Those energy buys now may not be such great buys next week.

    Regards,

    Richard P

  23. mark
    August 8th, 2011 at 15:58 | #23

    Simply cash in 10% of that 250 Trillion $ derivatives market and pay off the WORLD debt! End of media-driven apocalypse.

  24. Bob
    August 8th, 2011 at 16:19 | #24

    One of the most simple questions to ask about the Economy is this;

    If you were starting a new business or looking to increase production or expansion of any kind, how would any of you submit a business plan to a banker that makes any sense what so ever? If I were your banker I probably have to call security and escort you to the door. Who is really speaking for the small businesses (nations back bone) these days? Its that simple. If by chance it became law that all Executive branch appointees must have at least 2 years in charge of making payrolls in any private business, Obama would completely without a staff in 5 minutes. I’m thinking of starting a collection of any successful buiness plans in America to date. They are truly a collectible item. Those with any sanity that is. LOL

    Fix your problem Mr President. LOL

    Nough said!!!!!

    PS If there were any real fiscal sanity in the house and senate Chuck Schumer, Chris Dodd, and, Barney Franks would be hanging from the gallows right now. Nancy Polosi and Harry Reed are but clerks in the store who disovered that any amount of stealing or debauchery is legal for them. So remember, Leader is not an appropriate name for most Congressmen-women. We could pass hundred and hundreds of bills from Nancy and never really know what see is about. What a dingbat LOL

  25. Bob
    August 8th, 2011 at 16:43 | #25

    Perry;
    You just got an “F” on your social studies paper above. Any of Europe is not comparable to American Ideals. Dugh…That must be why we have lead all these years. Of those governments spawned in the aftermath of WWII, Germany is possibly the only exception in that they have adhered to the more soundness of a fiscal responsibility (a uniquely American hinterland (flyover county) Ideals. Not the Washington beltway for sure. Unfortunately that wont keep Germany safe from the Euro brake down. This is far more critical than what’s happening in America by the way.
    Also, unfortunately this will have no impact on our opinion either. I’ve found those who buy the European ideology crap are usually too far gone to be saved from their defective reasoning.

    My eternal optimism is that you may yet be different than most of your persuasion.

    Regards

  26. Jacob Haight
    August 8th, 2011 at 17:02 | #26

    Jack are you blind or just so into Obama you are willing to lie. Are National debt is over 14 trillion, the compromised deal the was passed cuts 3.6 trillion over the next few years but our estimated debt is estimated to increase over 6 trillion so the bill cuts nothing. Secondly Obama’s insistent rants on how the market need to be regulated more and higher taxes paid “they need to pay there fair share” does nothing to help the economy. Lastly Obama and the Dem led by failed former speaker of the house Nancy Pelosi still wont come to the table and make long lasting deep cuts into entitlement programs instead they ask for more money to expand these programs. If Obama was serious about helping this economy he would of followed S&P’s advice a month ago and urge the senate to pass the tea parties bill as S&p advised and he also would have gotten rid of Obama care which all by itself adds trillion to the national debt and stifles economic growth. Obama is a social justice president the wants to attack big business even if it destroys America’s economy and there no facts, stats, or tragic enough event to cause liberal’s like you jack to disagree with him.

  27. Leroy
    August 8th, 2011 at 17:31 | #27

    If we weren’t the U.S.A., our rating, based on our financial statement as a nation and ability to pay our debts without just continuously raising our debt ceiling, would probably be a C+. The Democrats in congress have not come up with a budget in over 800 days. They just automatically say whatever budget ideas the Republicans come up with are terrible. And Obama’s socialist/Marxist ideas, along with his crushing bureaucratic nightmare regulations for business, and stimulus for unions, banks and new government employees, if not abated will destroy us!

  28. Stephen Baze
    August 8th, 2011 at 17:43 | #28

    Seriously only a complete blind fool would say the T Party has any part in this downgrade ? This should have happened 2 years ago and CRA should have never happened . I am always amazed at the ignorance in America, but that is why we are where we are at combined with criminals in congress and elsewhere in high places. Unbelievable comments . The downgrade is the first bit of good sense in a long time and perhaps will force some reasoning ? Dodd/Frank should have all assets siezed and be behind bars as a good example, just for starters !

  29. Stephen Baze
    August 8th, 2011 at 17:50 | #29

    Just to be clear and fair , toss H Paulson in the slammer as well and seize his assets too ! They are nearly all criminals, are many of you asleep or just brain dead ?

  30. Thom Baker
    August 8th, 2011 at 18:42 | #30

    This is an opportunity to make some serious money once the market stabilizes. Unfortunately we as a nation have become way to politistized to take advantage of this. It’s all about Obama, the t-party & the endless finger pointing. The point is if people would get their heads out of their political asses & look around for a change they may actually accomplish something positive financially.

  31. Stephen Baze
    August 8th, 2011 at 20:05 | #31

    Kent is not at fault for the markets collapsing, he has no control of that . But I have not gone long on much of stuff because I knew a correction was coming. Although I did not think this much now , I thought it would be slower and not so extreme. Truth is it needed to hhpen and we all should hhe seen it coming. I played some of the NG moves and simply took my lumps and got otu before the big dive last Friday. The writing was on teh wall and the Downgrade was the icing on the cake. This is gonna last for a while so don’t get sucked in by a dead cat bounce. This is gonna go deep and more dwngrades are coming to europe and US munis and states. we will break 1100 ES and go into 1050 or evn lower before it is over. I lost about 1K but better than 5 or 10 K by trying to hang on in a major selloff. We may get some rebiunds to get out , but don’t think this is over, it isn’t ! Kents oil calls have been far to optimistic, but I like the NG palys and will get back in at an even lower price at some point once teh dust settles. Take your lumps and buck up.

  32. brutally honest
    August 8th, 2011 at 20:24 | #32

    there are only two things wrong with the downgrade. 1st,it´s about 8 years too late if not longer. 2nd, they didn´t have the balls to rate it as low as it belongs.
    While I would have to agree that Obama is not doing the best job (he´s f#@%ing it, to say the least). He´s still better than the idiot that preceeded him (the one who really got us into this mess)!

    A FOOL CAN THROW A STONE INTO A POND THAT 100 WISE MEN CAN NOT GET OUT!!!

  33. August 8th, 2011 at 20:28 | #33

    My point of view, AAA or AA+, is there any difference. USA us still USA. If USA is a corporation, it must be a good target to investor.
    It is USA not Spain. Almost every country in this world must pay protection fee or financial process fee to USA to use its currency for transaction. We should admit that USA should entitle and already enjoy some privilege. This world still need to trade off and compromise to accpet that USA could borrow more money to maintain US currency and keep balance among different powers.

    S&P may be right and that I think only GOD know it is right or wrong. I think this downgrade rating did not benefit no one; however, downgrade rating did damage the confidence of all investor around the world. This only make global economy weaker and will take more time and money to recover.

    My conclusion is that this time, as a reputable global player,
    S&P is not responsible.

  34. August 8th, 2011 at 20:57 | #34

    America has always been great, we did not need this debt change. Iam glad I voted for the American. lol

  35. Jesse Denton
    August 8th, 2011 at 21:46 | #35

    It is always amusing to see a radical progressive liberal Democrat run screaming with his diminishing hair and a pseudo-intellectual beard on fire in a tirade about the evil Tea Party. Using your logic, if a pest control guy told you that your house had termites, you would no doubt blame the pest control guy, not the termites. If you did you job as well as the S&P, your subscribers might have more winners and surely less political bovine scampi.
    The REAL tragedy here is that, as a professor, you are polluting and adversely influencing the minds of our Nation’s greatest treasure…our youth. Grow up, professor; it is no longer 1968. Bill Ayers might find your 60’s radical tirade appealing, but I do not.
    Let me close by reminding you of an old admonition, “It is better to be thought a fool and remain silent, than to speak and remove all doubt.”

  36. Michael Upper
    August 8th, 2011 at 23:10 | #36

    Kent’s evaluation of S&P may be correct but the ire should be directed toward a Federal Government that is clueless about how to manage the economy. This all started with George Bush in 2001 and the war on terrorism, which I supported then and now. At that time I asked “How is this going to be paid for?” Then almost immediately we got into the Iraq War. Again, I asked “How can we possibly afford this and how is it going to be paid for?” George and his group of geniuses had the answer…Print Money. They devalued the U.S. dollar so severely that today it is worth almost nothing. They did this in spite of the fact that no WMDs were found. We could have pulled out of than war and saved billions of dollars but the egos of a bunch of petty people would not allow them to say “Oops! We made a mistake. Let’s not go any further in this war.” Maybe this was W’s way of trying to show that “Daddy should have taken Hussein out but since he didn’t I will.” The Obama Administration had no choice but to spend more in bail out programs that had to be paid for by printing even more money thus devaluing the dollar even more. That spending postponed (not avoided)the worst depression in history that started during Bush’s last months in office, i.e. before Obama came into office! Let’s be honest…Don’t blame Obama, blame Bush and the idiots he surrounded himself with, including Bernanke. However, nobody in Congress or the Administration have any knowledge or experience in the “real world” and that is why they are clueless. It matters not whether they are Republican, Democrat, or Tea Pary…none of them have any practical experience and thus cannot possibly know what they are doing. The economy, the stock market, and the citizens of our great nation are hostages to a bunch of ignorant people that only know how to play politics. To me, these are the reasons S&P downgraded our credit ratings.

    Michael Upper

  37. Frank Payne
    August 9th, 2011 at 06:39 | #37

    Ratings agencies are very suspect and have an inordinate affect on market sentiment. However, what is worse is the attempt by American journalists and politicians to point fingers at the rest of the world when covering the parlous state of the world’s economy. Let us never forget that it has been the Great United States and it’s cowboy financial institutions who single handedly set the wheels in motion for the whole subprime fiasco as well as the rediculous state of the country’s debt levels. Pure greed,together with conscienceless marketing,was responsible for sowing the seeds of this disaster, creating the mother of all financial bubbles. The greed was aptly illustrated by the way the bail-out funds, given to financial institutions, inter alia, were appropriated – for the benefit of those in the industry who had in fact caused the problem in the first place. How sick is that? Government on the other hand has had absolutely no idea of what was going on, starting with the last inept governor of the Fed and ending up with helicopter Joe in office now. There is no excuse for what these guys did and are doing and maybe the only way out, hard as the consequences may be, is for the “mighty dollar” to lose it’s “world” status and thereby force Americans to get back to some solid real work and cut their clothes according to their cloth. Perhaps it would knock some sense into heads so that the cosy clique running the show, is replaced by representatives who have the moral will and courage to look after their constituencies, stay out of other people business and build a nation which might once again earn respect.
    However in a country where Government and those in power are so influenced by special interests and power broking,fundamental change has to take place and those in the driving seat are unfortunately not going to take the necessary steps willingly.
    There is a book which I heartily recommend for reading by all Americans “American Dream – Global Nightmare”. In fact it should be prescribed reading in schools, as it sets out the whole myth of modern day America’s self image of its own position in the world, compared with that of the rest of humanity. Splendidly written and spot on.

  38. Crystal Clear
    August 9th, 2011 at 14:45 | #38

    Don Merriman :Standard and Poors judgment call on National Debt was wrong, Never once has there been any referance to Assets virsus debt, nothing but national debt. A true financial statement reflects the value of U.S. Government assets that have been paid for by taxpayer for many many years. The people(taxpayers) own Bureau of Reclamation dams,Many large power producing Dams, airports, highways, many millions of aces of Forest Service and other Federal land. Much of that has millions of acres of timber and has huge reserviors of oil underneath them.

    Where HAVE you been?

    Cities and states everywhere are selling thier assets to foriegn companies at record rates!

    I was paying attention in 2004-2006 or 7 when China became partners in several major investment companies(http://www.nytimes.com/ref/business/22blackstone.html)….so, in effect, China now holds controling interest in many of our big corperations and thus are now controling partners in how those assets are used and in descisions on how and where these companies do business.

    Second hand information claims that the dams and lakes were sold long ago and are now run by the U.N. along with our federal park lands etc, etc….(quote “recently sent a photograph of the entrance sign of the Great Smoky Mountains National Park. Notice the telling phrase on the sign: “AN INTERNATIONAL BIOSPHERE RESERVE.”
    )http://www.tetrahedron.org/articles/new_world_order/Rockefeller_UN_National_Parks.html

    We are screwed and the downgrade is the least of our worries.

  39. andy giertz
    August 12th, 2011 at 10:11 | #39

    Hi Don,

    I don’t know how many times I have heard people use FDR’s quote, “…nothing to fear, but fear itself” assuming it relates to WWII. FDR made that remark at his inaugural address in 1933 in regards to the Depression. Sorry. I’m a history buff, (or geek).

  40. Frank Payne
    August 12th, 2011 at 11:17 | #40

    Frank Payne :
    Ratings agencies are very suspect and have an inordinate affect on market sentiment. However, what is worse is the attempt by American journalists and politicians to point fingers at the rest of the world when covering the parlous state of the world’s economy. Let us never forget that it has been the Great United States and it’s cowboy financial institutions who single handedly set the wheels in motion for the whole subprime fiasco as well as the rediculous state of the country’s debt levels. Pure greed,together with conscienceless marketing,was responsible for sowing the seeds of this disaster, creating the mother of all financial bubbles. The greed was aptly illustrated by the way the bail-out funds, given to financial institutions, inter alia, were appropriated – for the benefit of those in the industry who had in fact caused the problem in the first place. How sick is that? Government on the other hand has had absolutely no idea of what was going on, starting with the last inept governor of the Fed and ending up with helicopter Joe in office now. There is no excuse for what these guys did and are doing and maybe the only way out, hard as the consequences may be, is for the “mighty dollar” to lose it’s “world” status and thereby force Americans to get back to some solid real work and cut their clothes according to their cloth. Perhaps it would knock some sense into heads so that the cosy clique running the show, is replaced by representatives who have the moral will and courage to look after their constituencies, stay out of other people business and build a nation which might once again earn respect.
    However in a country where Government and those in power are so influenced by special interests and power broking,fundamental change has to take place and those in the driving seat are unfortunately not going to take the necessary steps willingly.
    There is a book which I heartily recommend for reading by all Americans “American Dream – Global Nightmare”. In fact it should be prescribed reading in schools, as it sets out the whole myth of modern day America’s self image of its own position in the world, compared with that of the rest of humanity. Splendidly written and spot on.

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