Most Popular Choices
Share on Facebook 46 Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 8/19/11

S&P and the Bilderbergers: All Part of the Plan?

By       (Page 1 of 3 pages)   15 comments
Follow Me on Twitter     Message Ellen Brown
Become a Fan
  (210 fans)

                                         

S&P downgrade
S&P downgrade
(Image by KansasCity.com)
  Details   DMCA

What just happened in the stock market? The week of 8-8-11, the Dow Jones Industrial Average rose or fell by at least 400 points for four straight days, a stock market first.

The worst drop was on 8-8-11, when the Dow plunged 624 points. That was the first day of trading after US Treasury bonds were downgraded from AAA to AA+ by Standard and Poor's.

But the roller coaster actually began on Tuesday, 8-2-11, the day after the last-minute deal to raise the U.S. debt ceiling -- a deal that was supposed to avoid the downgrade that happened anyway five days later.   The Dow changed directions for eight consecutive trading sessions after that, another first.  

The volatility was unprecedented, leaving analysts at a loss to explain it. High frequency program trading no doubt added to the wild swings, but why the daily reversals?   Why didn't the market head down and just keep going, as it did in September 2008?  

The plunge on 8-8-11 was the worst since 2008 and the sixth largest stock market crash ever. According to Der Spiegel, one of the most widely read periodicals in Europe:

"Many economists have been pointing out that last week's panic resembled the fear that swept financial markets after the collapse of US investment bank Lehman Brothers in September 2008.

"Then as now, banks stopped lending each other money. Then as now, banks' cash deposits at the central bank doubled within days."

On Tuesday, August 9, however, the market gained more points from its low than it lost on Monday. Why? A tug of war seemed to be going on between two titanic forces, one bent on crashing the market, the other on propping it up.

The Dubious S&P Downgrade

Many commentators questioned the validity of the downgrade that threatened to collapse the market. Dean Baker, co-director of the Center for Economic and Policy Research, said in a statement:

"The Treasury Department revealed that S&P's decision was initially based on a $2 trillion error in a ccounting. However, even after this enormous error was corrected, S&P went ahead with the downgrade. This suggests that S&P had made the decision to downgrade independent of the evidence."  [Emphasis added.]

Paul Krugman, writing in the New York Times, was also skeptical, stating:

"[E]verything 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 . . . .

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

In an illuminating expose' posted on Firedoglake on August 5, Jane Hamsher concluded:

Next Page  1  |  2  |  3

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

Must Read 11   News 8   Valuable 6  
Rate It | View Ratings

Ellen Brown Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling WEB OF DEBT. In THE PUBLIC BANK SOLUTION, her latest book, she explores successful public banking models historically and (more...)
 

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines

 
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

It's the Derivatives, Stupid! Why Fannie, Freddie and AIG Had to Be Bailed Out

Mysterious Prison Buses in the Desert

LANDMARK DECISION PROMISES MASSIVE RELIEF FOR HOMEOWNERS AND TROUBLE FOR BANKS

Libya: All About Oil, or All About Central Banking?

Borrowing from Peter to Pay Paul: The Wall Street Ponzi Scheme Called Fractional Reserve Banking

"Oops, We Meant $7 TRILLION!" What Hank and Ben Are Up to and How They Plan to Pay for It All

To View Comments or Join the Conversation:

Tell A Friend