Well, the unimaginable has happened. S&P has downgraded US debt to AA+ from the AAA rating we’d had for as long as I can recall such things (It’s been AAA since 1941, which is before my time). Remember, this is the rating agency that missed the fact that Enron was a scam, and more unbelievably, agreed that by combining enough sub-prime debt into one security, you get AAA as a result. Personally, I think S&P should have gone the way of Arthur Andersen, and Bear Sterns. Instead, they are putting the recovery at risk. David Beers is the London-based managing director of sovereign credit ratings at Standard & Poor’s. You can view An Interview with S&P’s Global Head of Sovereign Ratings at Larry Kudlow’s blog.On to the roundup –
At Boomer and Echo, a clever post, 9 Ways To Avoid Buying Things You Don’t Need. It’s really a trick for some to avoid accumulating too much stuff, as the growing decluttering movement shows, Booker gives some great advice on how to stop this process in its tracks.
At Credit, Eh I learned that Polymer Money is going to Replace Paper Money in Canada. Security, durability, and a cool new look. I’m curious how long currency will even be around, as electronic transactions seem to be taking over. I’d bet I touch less than 1% of our income as cash over the course of the year.
At Best Rates In, the prolific Miranda Marquit authored Choosing Amongst Credit Repair Companies. While I’ve been fortunate to never need such services, it’s good to know they are there for those that do.
Chrystal offers a great Retirement Checklist at Stupid Cents. Retirement seems to be on everyone’s mind, but have you really planned for it or are you just dreaming? Check out Chrystal’s list and see if you have any additions to suggest.
Nelson Smith suggest we Start Thinking Like A Wealthy Person. Not the Porsche driving glittering rich, but the Dr Thomas Stanley type millionaires next door. A good lesson to learn and great advice to follow.
Fiscal Fizzle offered advice on Buying in Bulk for Singles and Small Families. Remember, it’s not saving if it spoils or is otherwise wasted. Buying in bulk takes a bit of practice and understanding, but can become a real money saver when done right.
Jason at Frugal Dad has a First of the Month Financial Routine. A seven step list, pretty neat. Mine is broken up a bit different as we’re paid every other week, so the bills, including credit cards, get processed then, along with the plans for the next two weeks. I update the balance sheet once a month as Jason does. With the S&P where it is now, I prefer not to look. Maybe August 31 will be better.
And last, I saw a late night tweet reminding me that August 5th was International Beer Day. I guess I need to mark the calendar for next year.
Hi Joe, thanks for including Boomer’s post on how to avoid buying things you don’t need.
Glad to do it, a nice article, Echo.
I tend to agree Standard & Poor’s is inept. For further support of this, see the discussion of the $2 trillion error S&P made as part of its decision-making to downgrade.
On the other hand, this downgrade reflects the realities of overspending and refusing to raise taxes meaningfully. It may be a step towards more sensible taxation of the wealthy and ultimately even single payer, socialized medicine.
(I write this as someone owning mostly stocks — but for the long run.)
I think the downgrade does not make any sense, since U.S. can always print dollar to pay debt. But it causes inflation
Agreed, a bond rating is supposed to be an objective determination of the borrower’s ability to repay, not a political statement.
It seems to me “politics” and the way the country’s financial affairs are managed are as mixed together as that of any corporation. When the directors etc. of a corporation struggle to agree and drag their feet on a certain plan of action or important aspect of the plan, shouldn’t rating agencies take this into account?
I still want the SEC to audit Standard and Poor’s personnel for who sold or bought whatever at a gain before the announcement of the downgrade.