It's not just me that talks to complete strangers then!

Thank fcuk for that.

A six month(six year? time doesn't matter once you have started the exposure) moratorium with just enough money circulating to keep domestic retail and industry going.

Meanwhile all the fancy double, treble and probably quadrupled squared stuff of hedges, derivatives, bonds, primes subs and otherwise, fractionals reserved and unreserved, the totes and tits of credit ratings. the de-de- defaultering defaults, the talking in tongues to camouflage myth with mystique should be brought to a halt and under a moratorium ruthlessly audited until we know exactly what – if anything – is due to anybody – which may be nothing, or very little – and who is liable to whom and for what?

And was it worth, or in any way warrant all the fuss?

Because, at the end of the day it we don't actually prove and expose this liquidised toxic sludge is a scam – a deadly scam, a plastic plague created by and for confusion of digits, zeros and ones, the digital bullets that kill, maim and lay waste, covert and bloodless never staining the hands or conscience of its tyrannical Tribunes.

These Emperors really have no clothes -it's time we started jeering at them.

On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade.

More than that, everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.

So what was S&P even talking about? Presumably they had some theory that restraint now is an indicator of the future — but there’s no good reason to believe that theory, and for sure S&P has no authority to make that kind of vague political judgment.

In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.

So this is an outrage — not because America is A-OK, but because these people are in no position to pass judgment. paul krugman blog

Apparently according to The Guardian and others there was a lot of pressure – a lot of pressure – from Washington not to do it. And now Washington are saying that there is a $2 trillion hole in their calculations.

What with that and ratings agencies offices in Milan being raided I am reminded of what you said Golem a while ago in a post, about everyone turning on one another.

Its hard to see how this will play out….

"A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.

"Official reasons given will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited."

"The official was unsure if the bond rating would be AA+ or AA.

"20.54 Citigroup, the third-biggest US bank, said it has $31.7bn of gross funds at risk in Greece, Italy, Portugal, Spain and Ireland."

A bank admitting how much it has at risk??? Is this manoeuvring for a further bail-out?

"20.27 The dramatic spike in the borrowing costs of the Italian and Spanish governments has led Goldman Sachs to downgrade the countries' major banks amid worries that the increase will impact their profitability. The largest downgrade was for shares in Banco Popolare Di Milano, which had their price target cut by 40pc."