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Opening Bell: 08.08.11

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Obama And S&P Vie For Credibility (WSJ)
White House aides say President Barack Obama views the decision as unjustified, contending that it was based on a flawed process, a message he intends to convey to Americans in coming days. Officials worked the phones and made numerous calls to a range of investors "to mitigate any short-term negative impact," a Treasury official said. They also issued a series of public statements aiming to undercut S&P's analysis, trumpeting a dramatic, last-minute, $2 trillion snafu in the firm's calculations. S&P officials, meanwhile, took to a rare Saturday conference call and the Sunday morning political talk shows to establish their bona fides, defending their analysis and saying that the prolonged and near-disastrous conclusion of the debt-ceiling talks called into question Washington's ability to function.

Geithner: S&P Downgrade Showed Terrible Judgement (AP)
"I think S&P has shown really terrible judgement and they've handled themselves poorly, and they have shown a stunning lack of knowledge about basic US fiscal budget math, and I think they came to exactly the wrong conclusion," Geithner said in an interview with NBC News.

G-7 Seeks To Calm Investor Fear After World Stock Sell-Off (Bloomberg)
G-7 finance ministers and central bank governors pledged in a statement to “take all necessary measures to support financial stability and growth.” Officials will inject liquidity and act against disorderly currency moves as needed, they said after a call late yesterday European time. The G-20, which includes emerging markets, issued a similar communique.

Bank of America: S&P May Downgrade US Again in November (CNBC)
"We do expect further downgrades," said Ethan Harris, North American economist, on the call. "We doubt the newly appointed bipartisan commission will come up with a credible long-term deficit reduction plan. Hence by November or December we would not be surprised to see S&P downgrade the debt again from AA-plus to AA."

Moody's Says US Needs To Find More Deficit Cuts (Reuters)
"For the Aaa rating to remain in place, we would look for further measures that would result in the ratio of federal government debt to GDP, for example, peaking not far above the projected 2012 level of near 75 percent by the middle of the decade and then declining over the longer term," Moody's analyst Steven Hess wrote in a report.

Geithner Tells Obama He Will Remain As Treasury Secretary (Bloomberg)
Geithner, the last remaining member of President Barack Obama’s original economic team, will continue at least through the 2012 election.

Economist: US Downgrade 'Absurd' (CNBC)
"The downgrade is absurd in that default ratings are supposed to result in default… It's not possible that the US will default on its debt," he said.

I Heard It Through The Baseline (NYT)
"The point here is not so much the $2 trillion, which makes very little difference to real US fiscal prospects; it’s the fact that S&P stands revealed as not understanding basic analysis of budget estimates. I mean, I don’t think I would have made that mistake; real budget experts, like the people at the Center on Budget and Policy Priorities, certainly wouldn’t have."

Roubini: Soft Patch Delusion Is Dashed (CNBC)
Dr. Doom: "“The misguided decision by Standard & Poor’s to downgrade the US at a time of such severe market turmoil and economic weakness only increases the chances of a double dip and even larger fiscal deficits.”

China Should Not Sell US Debt: Ex Chinese Lawmaker (Reuters)
"In my opinion, at this moment, the best strategy is no buy, no sell," Cheng told Reuters when asked what Beijing should do with its U.S. debt investment.

Trichet Draws ECB ‘Bazooka’ as Italy, Spain Debt Purchases Begin (Bloomberg)
“The ECB’s credibility unfortunately has taken a real battering and it is now at the mercy of governments,” said Tobias Blattner, a former ECB economist now at Daiwa Capital Markets Europe in London. He estimates the central bank will have to buy about 200 billion euros ($287 billion) of Italian bonds and 60 billion euros of Spanish securities to make an impact.

Citi: Markets Moving Faster Than Euro Policy (CNBC)
This Just In: "Markets move so much more rapidly than EU bureaucracy understands," he said. "We are dealing with technology that moves markets in nano-seconds."

London Hit By Weekend Of Rioting (WSJ)
Police made a total of 161 arrests during a weekend of violence not seen since rioting the mid-1990s and a series of mainly race-related riots in the 1980s.

Woman Accues Planet Sushi Of Adding Semen To Spicy Sauce (Eater)
Her court filing: "...somewhere around midnight, she received a take-out order of tuna rolls, with spicy sauce on the side, and that the spicy sauce was tainted with human bodily fluid, which she believes was semen. She states that she noticed something amiss upon first tasting the sushi, after having dipped a piece of the tuna roll into the sauce, and that she spit part of the roll out but swallowed about half of the bite."