All other things aside, the WH has two options they must achieve in the next 48 hours:

[Poll_Blind]

:redbox: Downplay, destroy or discredit S&P (They're doing this already, off the record, calling it "Amateur Hour at S&P.")
:redbox: Get S&P to change their mind before the open of markets Monday. Asian markets' Monday is our Sunday in the afternoon (I believe)

Or markets open Monday and pensions and other organizations start trading on S&P's rating. Depending on the institution, some may be forced to divest in anything less than AAA-rated securities. I have heard that in most cases, at least, these automatic circuit breakers would not trip unless all 3 major credit rating agencies downgraded the US credit rating at the same time. But it sure doesn't help.

PB

[Pale Blue Dot]

1. Option #2 will not happen. No chance. nt

[msongs]

2. credit cards and agencies screw the general public the same way, can we depower them? nt

[Poll_Blind]

4. Fitch and Moody's still have us as AAA which is good news, at least. But the Prime Interest rate...

...could possibly go up if institutions balk at purchasing bonds. I just don't know how quickly that can go up- I think the Treasury has a lot of control over that, at least in the short term.

And Prime is going to drive your credit card interest rates, etc.

PB

[rhett o rick]

18. If people are paying credit card interest, it is a terrible shame. nm

[liberal N proud]

3. Monday markets will be bloody

They will make Thursday look like a profit.

He only has until Sunday at 6:00PM EST to accomplish this.

[nadinbrzezinski]

6. Stay 'way from the dang TV monday! Yeah, that't it!

[nadinbrzezinski]

5. On the bright side

read the POLITICAL commentary on it... this is not about our current ability to pay... but that lovely dysfunctional congress and the ideology of ome of the two major parties...

Perhaps... this is a way for WS to tell the REPUBLICANS get your head out of your ass.

[Poll_Blind]

8. Good point, Nadin! They're spot-on in their political analysis but I think everyone in Washington..

...is aghast that they'd feed something other than our flat ability to pay back debt into their analysis.

I guarantee you, the White House is feeling Royally Screwn at the moment. As if Obama had a bone in his body, but if he knew what he were doing he should be putting this shit on the Repukes' shoulders starting 30 minutes ago.

PB

[nadinbrzezinski]

9. Of course they are... I mean S&P is doing to us

what they have done to insert country here in the past.

The fact they are even looking at the POLITICAL outlook is actually telling on what they think of our POLITICAL stability.

[customerserviceguy]

16. This is WS coming in right on schedule

to hang this on President Obama. They're doing everything they can to orchestrate a Repuke total victory (House, Senate, and WH) next year.

Remember how the reich wing was able to hang the "weak on defense" albatross around Jimmy Carter's neck? That's what's happening here.

[Drahthaardogs]

7. I do not think so.

I think this is a huge political play, orchestrated by S&P and the Wall Street Bullies to get their point across. The US has NOT lost its AAA credit rating, they have one of three ratings agencies that downgraded it slightly. The other two have stated they will not. This is a stern warning to the Republicans to get their Tea Party dogs on a short leash and at least attempt to be somewhat fiscally responsible. It is also their way of telling the Democrats to cut some entitlements. Basically, they are showing the Tea Party who REALLY has the power. I predict a sell off, but nothing huge. Consider this a warning shot.

[Poll_Blind]

10. I'm not saying I entirely disagree but you ever notice how the price of gas goes up...

...immediately when there's some disruption in the Middle East, even though the price shouldn't be going up for days or possibly weeks because of fuel already being processed, in the pipeline? It's that kind of gouging that I'm worried about and I'm admittedly ignorant about how much pressure can be put to raise the Prime based on just the S&P downgrade.

PB

[quiller4]

17. I'm not sure I see a big sell off but there will probably be a run up

of some of the blue chip stocks that are very under priced right now. During the big drops this week, institutional investors ran to treasuries. While we were all watching the stock market drop, others were noticing the record sale of treasuries. Some of that money will move back into the market to pick up blocks of stock.

Quite a number of companies released good or even record second quarter earnings this week but that news was overshadowed. Investors that leave Treasuries will be picking these stocks up at prices that reflect fear about the global economy rather than the actual profitability of the companies themselves.

[Zenlitened]

11. Hearty K&R for option #1: Take this opportunity to cut them down...

...by any means available.

I mean, never let a crisis go to waste, an' all that, right? ;)

[Lorien]

19. That's the first rule of the Shock Doctrine. nt

[izquierdista]

12. Got to ask why

Max Kaiser had the best answer on why Wall Street wants to downgrade US debt -- they can't make any money trading AAA+ bonds. They NEED a lower credit rating so there can be more volatility and they can widen the spread.

[Zenlitened]

15. Good point. - n/t

[quiller4]

13. They don't need to get S&P to do anything since Moodys and Fitch

have re-stated their intend to hold the AAA rating. Institutions don't have to dump on the basis on one rating agency's change. S&P is the agency held in lowest regard by portfolio managers. Some pension funds refer specifically to the Fitch rating on public notes but none refer to S&P alone.

[Poll_Blind]

14. Do you have a citation for that last sentence? Just something I can look up which...

...might confirm that? I'm not saying I disagree, I'm just wanting to read more.

PB