The S&P Credit Agency now ranks right up there as the most hated company in the world. And Deven Sharma, President of the S&P should probably go into hiding.
President Obama is breathing a huge sigh of relief because the public will no longer only associate the market meltdown with his lack of leadership. History will show that Deven Sharma, and his quest for fame and power rocked the market and caused millions of people around the world to lose trillions of dollars as well as their jobs.
It would be one thing if the S&P Credit Agency had any credibility by downgrading US sub-prime mortgages back in 2007. But no. They rode those security to the ground with their investable grade rating. With an already frustrated public and a weak market after the debt ceiling debacle, it is absolutely low quality to go ahead and downgrade the US sovereign debt rating on a late Friday evening on August 5th after the market closed. The S&P had already been in discussions with the White House and Treasury Secretary Geithner, and for the sake of their “principals”, they spat in our political leader’s faces, as well as our faces and downgraded anyway.
EVERYBODY IS PORKED FOR NOW
You may think that this downgrade only affects the rich. But, oh my, you’d be totally mistaken. This downgrade affects EVERYONE! You know what job security means? Well you can now throw your definition out the window. Job security now means always looking over your shoulder, working longer hours, and kissing more butt. Expect massive rounds of layoffs before year end, especially right around the holidays. You think you’re going to get a bonus for a job well done this year? Cut that expectation in half, and maybe, just maybe you’ll be in the ballpark. Thinking of retiring sometime soon? Forget about it!
Think about the hundreds of thousands of college graduates who can no longer find work, or whose offers have been rescinded thanks to the sovereign debt downgrade. If you were a hesitant small business owner who was worried about tax increases and an uncertain political climate, you certainly are not hiring anybody now thanks to the S&P! If you are a cashed up major corporation, you are going to hold onto your cash like Pirate’s Booty just in case another power hungry organization attacks. Everybody, and I mean everyone is screwed to some degree.
Everybody knows that the US has debt issues. For goodness sake, we saw Congress wrangle for months over the issue! At least there was progress made. More time should have been given to recover from the debacle and discuss things through with the Super Congress. Global confidence is absolutely shattered, as markets everywhere sell-off. We are talking a downgrade cascade that will affect every single country in the World. Nobody feels safe anymore, not even the 40,000 baseball fans I witnessed during a workday at last weeks’ Giants game.
BATTEN DOWN THE HATCHES
The good times are OVER for many of us, including myself. I’m going to try and save even more than the 70% of after-tax income currently as that’s what it’s probably going to take to live a comfortable retirement in who knows when now. You’ll need $4.2 million cash in the bank to earn $100,000 in interest income at today’s 10-year risk free rate of 2.4%. Savers are crushed as everybody piles into US treasuries and yields go lower. Good luck to all I say.
You can thank not only our jokers in Washington, you can now thank Deven Sharma for destroying your wealth and trying to take away your future. He didn’t have to downgrade that Friday evening, just like Moody’s and Fitch didn’t downgrade. We’ve got a printing press and are the world’s reserve currency for goodness sake. You can never underestimate the power of one’s ego and desire for fame. Once you taste a hint of power, it’s like an addiction that makes you crave for more. Get ready for the S&P to hand out downgrades like pancakes! Munis, you better run and hide!
Readers, what are your thoughts on the S&P and Deven Sharma? Would you chop of your pinky if you had a stomach ache? Would you slice your wrists if you sprained your ankle? Is there something about Deven we do not know about? Did someone wrong him when he was younger and now desires to exact his revenge on the world? Could this downgrade by a great wake up call that will benefit America and the World in the long run?
PS I’m buying stocks by asset allocating 15% more into equities (~70%) post sell-off Monday in the 401K. I suggest you asset allocate more towards equities too if you’ve been underweight. S&P and Deven be damned. They are a farce and the way to spit back is to make some money from the carnage.
S&P rated the following AAA: Sub-prime, Enron, Fannie Mae, Freddie Mac and more. France is currently rated AAA.