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Author Topic: SEC investigating S&P's downgrade of U.S. debt  (Read 3425 times)

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Offline Chris_

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SEC investigating S&P's downgrade of U.S. debt
« on: August 12, 2011, 04:21:45 PM »
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SEC investigating S&P's downgrade of U.S. debt

The U.S. Securities and Exchange Commission (SEC) has asked rating agency Standard & Poor's (S&P) to disclose which employees knew of its decision to downgrade U.S. debt before it was announced last week, the Financial Times said, citing people familiar with the matter.

SEC's move is part of a preliminary examination into potential insider trading, the FT said.
Reuters

Hmm. :tinfoil2:
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Offline rich_t

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #1 on: August 12, 2011, 04:41:33 PM »
Obammie going after the detractors?
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Offline JohnnyReb

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #2 on: August 12, 2011, 04:47:08 PM »
Quote from: rich_t on August 12, 2011, 04:41:33 PM
Obammie going after the detractors?

Maybe he's mad because they didn't lower even more?

He is running out of time to complete his destruction of the U.S..
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Offline CG6468

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #3 on: August 12, 2011, 05:02:36 PM »
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SEC investigating S&P's downgrade of U.S. debt

The U.S. Securities and Exchange Commission (SEC) has asked rating agency Standard & Poor's (S&P) to disclose which employees knew of its decision to downgrade U.S. debt before it was announced last week, the Financial Times said, citing people familiar with the matter.

SEC's move is part of a preliminary examination into potential insider trading, the FT said.

Huh? Why? This would have discussed at length at S&P, perhaps with many people. WTF are they looking for?
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Offline Chris_

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #4 on: August 12, 2011, 05:58:53 PM »
Meanwhile, Moody's still has the United States at an AAA rating.
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Offline DumbAss Tanker

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #5 on: August 13, 2011, 09:43:47 AM »
No political motivation at all, I'm sure...
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Offline BlueStateSaint

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #6 on: August 14, 2011, 01:02:10 PM »
Quote from: chris_ on August 12, 2011, 05:58:53 PM
Meanwhile, Moody's still has the United States at an AAA rating.

Moody's has said that they may downgrade the US credit rating, and S&P may do it again before 2011 is gone . . .
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Offline CG6468

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #7 on: August 14, 2011, 02:15:54 PM »
Quote from: BlueStateSaint on August 14, 2011, 01:02:10 PM
Moody's has said that they may downgrade the US credit rating, and S&P may do it again before 2011 is gone . . .

Another page in blammo's legacy.
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Offline Wineslob

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #8 on: August 15, 2011, 09:57:55 AM »
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The U.S. Securities and Exchange Commission (SEC) has asked rating agency Standard & Poor's (S&P) to disclose which employees knew of its decision to downgrade U.S. debt before it was announced last week, the Financial Times said, citing people familiar with the matter.



If this had happened under Bush.......................DUmmie OUTRAGE!  Obummer, not so much.
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Offline Erasmus

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #9 on: August 15, 2011, 01:46:30 PM »
There's always a bit of competition between S&P and Moody's as to who can be the biggest hardass since the credit crisis.  It's a tough call.  The issue really is about competency, though, having worked with the rating agencies getting bonds rated, I can tell you that not all the folks that work there are the best financial minds on the planet.  Most of the best and brightest work for the banks, not the rating agencies.

That said, the SEC investigation has to be political.  They (the US Treasury) should deal with it the way every other bond issuer does - restructure the bonds or take necessary actions to reinstate the AAA rating.  It's that simple.
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Offline cmypay

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #10 on: August 15, 2011, 04:13:50 PM »
IF, and it is probably a big IF,  the SEC is being honest, then this investigation is looking into who profitted immediately following the credit downgrade. Someone must have reported S&P employees for profitting.
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Offline thundley4

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #11 on: August 15, 2011, 04:28:32 PM »
Quote from: cmypay on August 15, 2011, 04:13:50 PM
IF, and it is probably a big IF,  the SEC is being honest, then this investigation is looking into who profitted immediately following the credit downgrade. Someone must have reported S&P employees for profitting.

The problem with that is the fact that S&P had telegraphed their intentions of dropping the rating.  They had repeatedly said that $4trillion in cuts were needed to prevent a downgrade.  The only problem I see is that they waited several days after the debt ceiling agreement was reached to issue their downgrade.  Anyone with money could have gambled a chunk on the downgrade coming, if they knew how.  Not me, of course, not the money or the brains.
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Offline Kryder

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #12 on: August 27, 2011, 04:57:20 PM »
People would make money on the downgrade if the interest rates of US Treasury bonds would have risen because of an increased risk foreseen by ratings agencies.  One of the major risks in bonds (corporate, and municiple) is interest risk, because if the interest risk rises, the value of the bond itself plummets because now people who had a bond paying 6% could buy a bond paying 10%.  So if you're trading bonds on spread, which means you are trading/selling bonds prior to maturation, you could see a significant loss in asset valuation because now people won't buy a bond for it's facevalue if it's interest rate is below the going rate.  Banks do this a lot to mitigate inflation on capital.  If the interest rates would have increased in US bonds they would have basically just lost a lot of potential liquid to invest, and essentially loan out to it's consumers. 

The good news is that the US Treasury bonds did not increase in interest.  The SEC is investigating trading by people who have ties to the S&P, to see if they had sold their bonds prior to the downgrade to try and mitigate their losses if the rate had gone up. 
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Offline NHSparky

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #13 on: August 27, 2011, 09:01:03 PM »
Scooter, you're talking about T-Bills. exactly when is the last time a 10-year note was over 6 percent, let alone 10?
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Offline Kryder

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Re: SEC investigating S&P's downgrade of U.S. debt
« Reply #14 on: August 30, 2011, 09:39:29 AM »
Quote from: NHSparky on August 27, 2011, 09:01:03 PM
Scooter, you're talking about T-Bills. exactly when is the last time a 10-year note was over 6 percent, let alone 10?

It was just an example of the potential interest risk that is associated with bonds.  Or did you actually read what I wrote?
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