Well, it seems like another crisis has surfaced to the top. Thank you mis-managed government. Starting Friday, the rumors turned to solid speculation that certain bond rating services---namely Standard and Poor's, but soon to follow, Moody's and Fitch---will change the rating on U.S. sovereign debt, meaning our Treasury Bills, Bonds and Notes. I think the perception is worse than what the consequences will actually be, but perception becomes reality. More on this in a few paragraphs.
We have had a Triple A, AAA, rating since ratings began. What this means is a perfect score. We can raise money, by selling bonds, at the best prices going. Just like your own personal credit score, the higher the better. If you have a tough patch and your score goes down, your ability to get loans, credit, and mortgages is diminished. You may be able to get the credit, but it may cost you more money down, or a higher interest rate.
We cherish our national rating---remember the old (I write this nostalgically) adage, "the full faith and pledge of the United States Government?" Now thanks to the Commie-Pinko-Bedwetting Liberals, our debt has skyrocketed and it's now virtually in dangerous territory. It is unsustainable. Yes, we've raised the debt limit before, but nothing like today. The Republicans, which are historically as guilty as any politician, have seen the error of their ways, and are trying to bring sanity and a curtailment model to Washington. It will take awhile. We need deep spending cuts, we don't need tax increases. I've written on this extensively. Write cabdriver22@msn.com and ask for a report on Whether Raising Tax Rates Actually Raises More Revenue. You'll be surprised at the answer.
Okay, back to the issue at hand. I love trading in the stock market. No one wants to see it go down. This last week, with the debt deal signed by the President, the market tanked. It had gone down 10 days in a row. Wall Street, much to my pleasure, felt the same way that I do. Yes, it's the best the Republicans can do until they get control of the Senate and make Mr. Obama a one term President. But the real problem did not get addressed in this go-round.
Then Friday came and the rumors went wild. Watch the market on Monday. I said to others on Friday night that if the topic continues this weekend on all the news/talk shows, than watch out Monday. No one knows for sure. Maybe this next crisis is already built in to the current Dow---DJIA--- which you can buy calls and puts on under Ticker Symbol: DJX. The market could easily go down 200 to 400 more points. It has good support at this level, but it could break support. Remember, "Buy on Rumor, Sell on Fact." This is really bad, and it all depends on the speculators. It will settle down in a day or so, or a week or so. But, in short, this market isn't going anywhere until the cancer is eradicated and that means voting the President out of office---along with a bunch of Anti-American Liberals.
I will write more on the actual workings of the debt-limit change in the next blog. Any comments, send them along.
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