The S&P debt warning: Wall Street extortionists demand savage cuts

[Hannah Bell]

Five days after the US Senate Permanent Subcommittee on Investigations released a voluminous report detailing the criminal activities of the banks and credit rating firms that precipitated the 2008 Wall Street crash and global recession, one of the named culprits, Standard & Poor's Credit Ratings Services, issued an ultimatum to the White House and Congress demanding an agreement on savage austerity measures ahead of the 2012 elections.

In lowering its outlook from "stable" to "negative" on the top AAA rating for US Treasury bonds, S&P spoke Monday for the entire financial mafia that is headquartered on Wall Street. The ratings firm declared in a press release that failure to reach an agreement in the coming months to reduce the federal deficit by at least $4 trillion over the next decade "could lead us to lower the rating."

This amounts to a threat to crash the US and global economy and undermine the status of the dollar as the world reserve currency. The move is part of an internationally orchestrated drive by the major banks and speculators to push through devastating attacks on the living standards of the American working class.

http://www.wsws.org/articles/2011/apr2011/pers-a20.shtml

April 2010:

SEC charges S&P with Fraud

The SEC's civil fraud complaint alleges that S&P allowed Goldman Sachs, who made billions of dollars betting on the credit collapse, to help select securities in the S&P500.

S&P didn't tell investors that Goldman was shorting the S&P500, or betting its value would fall... When the S&P500's value plunged by 30%, Goldman walked off with $10 billion, the SEC said.

The charge further alleges that S&P deliberately misrepresented the information communicated to investors by bringing in outside analysts such as J. Bogle who approves of the index and preaches that the index can never go down.

http://caps.fool.com/blogs/sec-charges-sampp-with-fraud/378334


Who is Standard & Poor's?

Standard & Poors is a division of McGraw-Hill. McGraw-Hill used to be a textbook publisher but it is now a global "information" corporation. Its other subsidiaries include J.D. Power and Associates; Platts; Aviation Week; McGraw-Hill Construction; & McGraw-Hill Education, as well as the Canadian McGraw & various foreign financial/ratings/credit corporations, e.g.:

http://www2.standardandpoors.com/spf/pdf/media/20050214_NewsSPCRISIL.pdf
http://investor.mcgraw-hill.com/phoenix.zhtml?c=96562&p=irol-newsArticle&ID=761611&highlight=

Its chair, president & CEO is Harold W. McGraw III, a grandson of the founder. He's a prep-school boy, U of PA, a free-trader who gets a $6 million compensation package. As Chair of the International Trade & Investment Task Force of the Business Round Table 2003-2006, he promoted free trade agreements; he did the same on GW Bush's transition team. He's on the Board of Conoco-Phillips; Chair, Emergency Committee for American Trade (ECAT); Business Council; Partnership for New York City.

A member of the Republic of Money.

Standard & Poors

The President of Standard & Poors was born in India. Deven Sharma got a BA at the Birla Institute of Technology, Ranchi, India & MA/PhD in the US (University of Wisconsin, Ohio State).

He started at Dresser Industries (the Bush-associated concern), then the similar corp Anderson Strathclyde. Then 14 years at Booz Allen Hamilton (consulting, primarily defense, HQ Spookville VA).

In 2002 he joined McGraw-Hill as Executive Vice President of Global Strategy. In 2006 he became Executive Vice President of Investment Services and Global Sales at Standard & Poor's, & President in 2007.

He's on the Boards of CRISIL (an Indian rating agency, McGraw-Hill = majority owner); The US-China Business Council and the Asia Society Business Council.

http://en.wikipedia.org/wiki/McGraw-Hill
http://en.wikipedia.org/wiki/Standard_%26_Poor's
http://en.wikipedia.org/wiki/Deven_Sharma

[suffragette]

1. Then they shouldn't mind implementing a financial transaction tax

to help avert the crisis they've helped create.

Though of course, we know they won't and will instead, fight tooth and nail against any such measure.

From an interesting editorial on the "Robin Hood tax":

http://www.guardian.co.uk/commentisfree/2011/apr/17/observer-editorial-financial-transaction-tax-good

A thousand economists have signed a letter to G20 finance ministers, urging them to implement a financial transaction tax. The idea is to levy a very small charge – no more than 0.05% – on transactions in financial markets. Money raised from the charge could be used to maintain rich nations' commitments to the developing world at a time when most are experiencing periods of budget austerity.

~~~

The complexity argument is nonsense. Share transactions are already taxed. The idea that the people whose appetite for convoluted financial instruments brought the world to the brink of bankruptcy should then reject a tax measure on grounds that it is a bit tricky to implement is laughable.

The capital flight argument also evaporates under scrutiny. As long as agreement can be secured between the world's major financial centres – London, Hong Kong, Frankfurt, Paris, New York – there will be nowhere for trading to go. A few rogues might move to dodgy offshore havens, but big volume deals worth billions will prefer the security of reputable jurisdictions. Besides, 0.05% is hardly an onerous charge. It would scarcely dent the successful traders' wealth, while raising billions for more deserving recipients.

When the financial sector was bailed out en masse by the taxpayer, it forfeited the right to demand exemptions and special treatments. It cannot excuse itself from obligations to the rest of society. The question G20 finance ministers must consider is not whether a financial transactions tax should be implemented, but how quickly it can be put in place.

[Hannah Bell]

2. why is the US allowing a *criminal* corporation to "rate" its creditworthiness?

why aren't these lying, cheating, thieving fucks in jail?

[The Magistrate]

5. Indeed, Ma'am: The Proper Response To This Is Arrest And Indictment

Followed by pulling the charter of the corporation, the 'capital punishment' applied to the late Arthur Andersen concern....

[Sherman A1]

8. Precisely

They need a nice quiet (meaning well publicized) visit from the US Attorney's office for a lengthly chat, that goes along the lines of "sit there keep your mouths shut and listen to all the things that are about to happen to your company".

[suffragette]

7. Great question, Hannah

And the answer is they should be.
You've made the point capably as did the Magistrate below.

Yet this headline sadly sums it up:

"Guys in suits guilty - but they still get away with murder"

Read more: http://www.smh.com.au/business/guys-in-suits-guilty--but-they-still-get-away-with-murder-20110415-1dhog.html#ixzz1K2piRz6d

Good article, by the way


And still in the zone also is the banner held by the students in the UK during their protest:
"Our austerity, their prosperity"

[One_Life_To_Give]

22. Who else will spend $35,000 a plate for dinner with Candidates

Power and money go together very well.

Something is inherently wrong when one must raise $1Billion to be a viable candidate. We can be sure they aren't spending much time with people who see $35K as a years pay.

[lonestarnot]

3. Don't we have enough private prisons to house these fuckers? While are they still running loose?

[Sherman A1]

10. I think there is a nice Federal Facility in Cuba where they

could spend some time working on their tans.

These guys are the true terrorists.

[BobbyBoring]

23. Yeah! we could use those FEMA camps for them

They should all be nationalized. Strip every dime from them, put in in the treasury, reduce the debt, then, send every tax payer a check from the remainder.

[DCKit]

4. Geez, who could'a seen THAT coming?

Actually, I'm shocked that it's taken so long. They pretty much announced that any new regulations/restrictions/taxes would result in another HUGE hit to the economy, but they've waited more than two years to flex that muscle again.

[noise]

6. Sickening truth from the wsws article

Instead, still at their posts and having suffered no consequences, they are using the disaster of their own making to gut bedrock social programs such as Medicare, Medicaid and Social Security upon which tens of millions of people depend.

[dreamnightwind]

9. K & R

Excellent points here. Chris Hayes was on yesterday's (Tuesday) Scarborough show and did a pretty fair job of presenting this case, as much of it as they would allow in his 60 seconds or so.

[inna]

11. k&r; thanks for the thread/research

[Hannah Bell]

12. I should add that McGraw Hill is one of the big players in the school testing industry.

They like school privatization & ed deform.

[malaise]

13. It's mind-blowing

These criminals gave the corrupt banks AAA ratings.

Rec

[datan]

14. ok

compared to other developed nations, the US is the worst in terms of funded + unfunded public liabilities (including state and federal).

the real question should be why the US has managed to keep a AAA rating for so long. and the main reason is reserve currency, issues debt in own currency blah blah blah.

but looking at the numbers alone, does the US deserve to have a AAA rating?

[Hannah Bell]

15. bullshit. where does s&p get off "rating" anything? they're fucking criminals.

[datan]

16. hm

i don't understand your question about where do they get off rating others?

anyway, even without any rating, why would investors lend money to a country which huge deficits when there's a chance that their bonds could be inflated away?

[Hannah Bell]

18. because they're criminal. it's like bank robbers rating the soundness of banks.

fuck standard & poors & fuck "investors".

"investors" should be drowned in the oceans of blood they've spilled.

[datan]

20. ok

if you're anti-investors, who's going to lend money to the US government?

Or you think the US government shouldn't borrow and close the deficit immediately (which is what this whole thread is supposed to protest)?

[Hannah Bell]

21. are you high?

[Starry Messenger]

17. k&r

The movie "Inside Job" has a scene in it with these jokers, where they repeat over and over again that their ratings are "opinions". What a racket!

[blindpig]

19. Capitalism is a racket. n/t