skysight-inc/HackerNews huggingface dataset:
Treasuries act as a money store for large institutions that I think would be hard for them to replace in practice. They use T-bills in particular as more or less a jumbo-sized version of an FDIC-insured bank account. Where would they move that money to? I.e., who else provides a similarly safe account where you can deposit $50 billion? Can't be to a bank account, because all the major banks have even lower ratings. There aren't enough AAA-rated corporates to move all that money. Eurozone bonds aren't looking too hot, and may also have institutional rules on proportion of the investment that can go into foreign bonds. I suppose they could buy large quantities of gold and physically store it in vaults, but many institutional investors also have rules on how much they can put into commodities. Perhaps giant suitcases of dollar bills? You can't pull money out of an instrument without putting it somewhere else!
I just watched that video. It's brilliant! I'm going to force my sister to watch it now :)
Thanks so much for sharing the link
They would do that without hesitation. The problem (at the moment) is they have nowhere else to put that much money.
You have a point, but the downgrading has symbolic value. Don't denigrate that symbolic value, either. Confucius say: "Signs and symbols rule the world, not words or laws."

As another comment on this thread pointed out, if the sole maker of the world reserve currency cannot keep a AAA rating, then who really deserves it? As the recent budget fight showed, the US government cannot make more than token attempts to improve its finances. The current debt is about one-fifth of the annual world GDP. Well-nigh invincible power blocs guard the biggest line-items on the budget. Tax increases are off the table and of doubtful effectiveness in this economy even if they were passed.

What confidence should such a government inspire?
Apple cracks down on unauthorized iOS 5 installs, bricks devices
That's exactly the point we wanted to convey. Erlang and node are great, but we know Python really well and were able to write a performant server with the tools we're familiar with.
Old joke: If you owe the bank a thousand dollars and you can't pay it back, then you have a problem. If you owe the bank a billion dollars and you can't pay it back, then the bank has a problem.
My C++ brain must be getting too old -- head is swimming :( From all the talk, these must be very useful, but I don't understand why? Why not just use an object?
How to Display Twitter Photos, Videos For Any Topic
... and now all the random crap financial code out there that simply hard-codes "AAA" as the US credit rating will have problems. I bet a lot of people will be bug testing this change over the weekend.

EDIT: This seems to sum it up:
http://lostechies.com/johnpetersen/2011/07/16/the-impact-of-...
That's a fixable problem; all we have to do is ostracize and make fun of holders of software patents.
I pay, I think $10 a month? It's worth it. Many people will probably grow into paying for it. It really is a nice product. The sharing function is the killer part, not the backup. People new to it might not have discovered how easy it is to share files with it, and then your Dropbox can fill up pretty fast.

Agree that the current accounts probably aren't worth $40/each - the valuation includes the technology, brand, and growth potential of course, not just the current userbase. But a lot of people will pay. Really, sharing big files used to be a major pain point online. Dropbox makes it ridiculously easy.
I'm sorry but this seems alarmist to me. Any automated system can make an exception. For your logic to hold these institutional investors would have to not take notice of the U.S. Government having its credit rating dropped. You're arguing they'd treat the United States and "any other investment" and rely on an automated system.

That's not going to happen.

Plus S&P's logic is shaky on this. The whole reason the threat of S&P dropping our rating has had no impact is because their demands were impossible to achieve. Cut $4 trillion from the budget in 10 years when we're expected to add $9 trillion in the next 4? Not possible and everyone knows it.
I created http://home.nibzy.com/ or http://nibzy.com - basically bookmarks to all my favorite sites and then some to site with optimized mobile. Check it out and set it to your homepage if you like it. Heres a plain text version also - http://home.nibzy.com/plain (loads slightly faster)
This has caused quite a stir here in SoCal. The Fullerton PD is now under investigation by the FBI, the officers in the video are in hiding due to death threats, and three of the city council members are being targeted for recall.
I checked with my partner, and he's under the impression that getting a visa would require at least five years of experience, but he's going to double check. Is this not the case?
China could either put it back in their coffers or invest in Brazil. Consider that they have Sino-Brazilian trade and technology agreement.
I am totally flabbergasted that media and governments would give one-shits-worth of consideration to what the credit ratings agencies have to say. The same agencies that gave high ratings to the sour derivatives market which eventually collapsed our economy. The ratings agencies are Wall Street shills. Lowering US Debt ratings will result in the US having to pay higher interest rates, which go into the pockets of the major financial firms. Government et al playing right into the hands of the banks.
I don't think this is correct. Planet Money did a recent podcast on this very subject (Would A Downgrade Matter?)[1], and they concluded that a downgrade from AAA to AA+ doesn't matter very much in the long run. Yes, it's somewhat embarrassing, and interest rates are likely to go up _slightly_, but that's about it.

The big leap is from "investment grade" securities to "junk bonds" ('BB'/'Ba' or less). We're still a long way from there.

[1]: http://www.npr.org/blogs/money/2011/07/28/138721364/
Erlang is compelling because it's been built from the ground up to support reliable distributed computing and heavily battle tested in incredibly high-volume applications. Non-blocking I/O is just the plumbing in a far more sophisticated machine.
You're making the assumption that the dollar remains the world reserve currency. Now there's a huge additional argument for moving to a trade-weighted basket of currencies. Besides, there are EUR issuers that are still AAA.
:)

Bob's software sucks, let's switch to Bob's software.
For those who aren't sure why this matters there are two things to note.

First, interest will go up. US Bonds are now considered riskier than they were before. This means investors in US Bonds will expect to collect more interest due to the greater risk they are taking. Instead of paying China and Japan 3% (for example) on $1 trilion (each), the US will now have to pay 3.5% (and climbing). Of course, the higher the interest rate, the harder it is to pay back (the quicker a new ceiling is reached), the likelier this happens again.

There could be some pretty massive dumping of US bonds. A number of foreign investors can only carry AAA risk. (It's kinda unclear where they'll run to though, since I think all the other AAA countries combined don't issue as much debt as the US). So, the economy might take a pretty big hit by losing all those investors.

Now, generally you need 2 of the big 3 rating agencies to trigger any of this. So it remains to be seen whether Moody or Fitch will follow. I think they both will.

Also worth mentioning is that Canada recently came back from a downgrade (by S&P) mostly by tightening their spending belt. Took 10 years (1992-2002). Australia did it too, though it took 7 years longer.
Its really not. If what you say was true they wouldn't still be actively buying U.S. Debt.

Their hesitation is they wouldn't get all their money back. If China pulled even 25% of its investments out of the U.S. the dollar would free fall. They wouldn't be able to cash out before most of the dollars value was inflated away.

China continues to buy our debt because they don't want the value of their current investment to collapse
so a human driving a car, got in an accident. interesting
Sadly, both parties will see this as an advantage going into the 2012 election.
Maybe long-term the interest rates don't go up much. But the main impact is a huge rocking-the-boat in the banking system : one of the bedrock ideas has just changed. You wouldn't want to do this if the banking system were strong. Now is really not a good time...
It'd have to get very bad for China to pull out. If China pulls out and damages our economy, our imports will dry up, their exports will dry up and their economy will dry up. I understand that China and the US might not be the best of friends right now, but their interests are generally aligned on US debt.
Japan has no defense investment. 'nuff said.
That's pretty much all I got from that article.
(Reference: http://www.federalbudget.com/)

Steps to recovery:

1) End all offensive military actions overseas. Finish winding down Iraq and abandon Afghanistan wholesale. These actions have cost several trillion dollars over the last 10 years. We can't get that money back, but we can stop spending more.

2) Defense spending is in the top 3 highest budget expenditures. Cut it by 1 third across the board. Maintain important overseas installations such as Japan and Taiwan. Given China's rise, its wise long-term to keep a presence in the region. Scale back deployments in Europe unless Russia still is still a threat to western Europe.

3) The most amount of money the U.S. spends is Health and Human Services. The U.S. health system is a fucking mess. Somehow we spend the most on healthcare and get some of the worst societal benefits out of any industrialized country. I don't have an answer here, but it likely involves completely tearing down the existing system to its nuts and bolts and building it back up. I'd love to hear ideas on this point from others that know more about it.

4) Social Security is the other one. My mom relies on it, so does a lot of my family. We're from meager backgrounds and traditionally have come from poorer parts of the nation. That being said, cut it.

When I look at my paycheck and see that upwards of 40% of my income is being sucked out by the government and used more for things I oppose than things I support (e.g. war spending versus scientific investment) it pisses me right off.

Yes, I have heard the naive argument "But taxes are there to run the things you use like roads and government services that you use every day". This is true only in part. Yup, we need an army. Yup, we need local police. Yup, we need roads. Yup, we need a justice system. But it doesn't take trillions of dollars a year to run those things.

The government shouldn't interfere with business like propping up failing business models. It should work to make sure that business plays fair, i.e. anti-monopoly or collusion, etc.

I'm more liberal than conservative, and definitely not one of these people that wants business to have free-reign over everything. But there are bottom lines that we have crossed and need to back off.
Naive question: the money that gets de-invested will be reinvested where? France? UK?
"Sorry, boss. Our positions are busted because we hard-coded AAA as the T-bill credit rating. Look on the bright side, everyone's got bigger things to worry about."
Devs, how to find the perfect blogs & websites to tell the world about your app?
Again this is based on the same logic that people will treat the U.S. Government the same way they'd treat any other person and that's just not going to happen.

If the U.S. falls back into recession we'll take everyone with us. Other countries know this. Banks know this. Institutional Investors know this.

Increase the interest rate on the U.S. and you'll trigger an increase on the U.S. consumer while exacerbating the U.S. debt crisis (which is the whole reason for the downgrade). That would guarantee a recession and would bring every investment down.

Finally everyone knows what S&P is up to. You said it yourself. They aren't happy with U.S. policy and they've been able to bully other governments into austerity in the past. So they think they can do it here. But S&P's opinion of U.S. policy isn't going to be enough to convince investors to willingly create another recession

(Please note I'm in favor of austerity and think we're already headed into a recession I'm just realistic about S&P's limited power)
Isn't Dropbox just filling a hole that Amazon isn't serving correctly right now? Aren't they the Twitpic of AWS?
I am not American, and here's what I don't get: America can borrow money right now at 1.5% for five years. Why is there such a clamour to stop? I would hope that the government would be able to get better than 1.5% return with the money - if the CEO of any company chose not to take on debt at this rate they'd get fired. It seems like all of the media coverage is glossing over this.
Isn't most of the US debt also financed by its own citizens?
No, I think it's just sloppy, probably the same incident from this quote (later in the article):

Chief Prosecutor Shawn Arthur writes, "[The videos] discussed a past incident tha has already been investigated.. regarding a dating relationship (a female detective) had with a suspect."
Ask HN: Ethernet at home
If I'm home, working at my desk, I always (still) switch to the wired LAN. It's slightly faster, and I dunno feels more secure.

I like the comfort of unplugging the wire from the laptop before bed: I know it's offline.

Anyone else?
But the most important aspect is on the banking industry, where there are huge positions that look like (X-X0). X0 may rise, which is a problem, but the bigger issue is that the overall size of this type of bet can be enormous, because it's overall AAA. Suddenly, a fundamental assumption underlying a lot of these trades has been shattered, and will force people to unwind losing positions... And the banking system wasn't a picture of health before.
Some institutions are obligated (by charter or contract) to only buy AAA rated bonds. That's why it's a big deal... Now that being said, I have no idea how this would work in practice.
In particular, their statement seems to claim that it's almost entirely due to their view that the U.S. might choose not to pay back its bonds, not that it couldn't; when explaining what's changed since previous assessments, their statement mainly focuses on the political will to service debt.
What was the original Erlang performance?

I mean, good enough is good enough, and local culture counts, no problem there, just curious.
I'm sorry but that's bull. Anything can be changed. Contracts can be revised and even charters can be updated by a Board of Directors. If you hold a significant amount of U.S. Bonds you aren't going to ditch them on S&P's say so. You're going to call a meeting of the Board of Directors or Trustees or whoever and decide based on your own judgement.

The whole point of a rating agency is to provide you with research that you couldn't get based on your available resources. But every economist in the world is a resource on the U.S. Government's viability. You can turn on CNBC and get 24 hour coverage of it.

So the U.S. is a special case and the ratings agencies don't mean all that much in regards to it.
> Again this is based on the same logic that people will treat the U.S. Government the same way they'd treat any other person and that's just not going to happen.

It's not a matter of how "people" treat it. Many funds are prohibited from holding anything other than AAA. Those folks will now be selling bonds.

For those that haven't looked at the math of bonds: When the price of a bond goes down (as it does when there are many sellers), the yield goes up. That yield is what the US Govt will be paying on future issued bonds, more or less.

Good luck to us all. We're gonna need it.
Why would you cut Social Security? It's in no danger.

And frankly, medicare wouldn't be if we killed the payroll tax cap. I never understood why it's ok for payroll taxes to be regressive.
Dropbox should be building their own data centers. At their scale, relying on amazon sounds like a bad longterm strategic move.
Listen to the Planet Money podcast. Lots of factors are considered, including political ones.
An answer to the question we're all wondering- "What happens now" answered well in a planet money from a couple of weeks ago:
http://www.npr.org/2011/07/18/138164761/what-happens-if-u-s-...

TL;DR - "I'm not sure it will have any impact. When you look at the bond market — 10-year U.S. Treasuries, for example — where is it today? In the light of all this hype about debt ceilings and possible defaults, it's at 2.93 today, so this is an extremely low interest rate in both nominal and real terms. It means that everyone in the world is willing to hold these bonds and is not the least bit worried about the possibility of a default. So, investors haven't changed their view of the creditworthiness of the United States at all, and I don't think they're likely to in the foreseeable future."
-Mark Weisbrot, co-director of the Center for Economic and Policy Research
We only have to look at Mexican field workers crossing into the US to see this is true. Though the New York Times reported that the number of Mexicans entering the US illegally for the first time has fallen from 525,000 in 2000 to fewer than 100,000 in 2010. The ROI for working in the US is lower, given the US's economical and political environment and Mexico's improving work opportunities.

https://www.nytimes.com/interactive/2011/07/06/world/america...
Perhaps an iphone / ipad / android client that makes this request to decide what skin to wear. Just sayin'
Why are you bringing up GDP? The discussion is about employment. Okun's Law isn't actually a law, it's a historically observed relationship.
API Stack – Image to CSS Conversion with Img to CSS API
The implication is really the other way around. The USD was the reserve currency in part because of the credibility of the US government's financials (and also because of amount of trade, etc). But obviously, the US has taken a huge beating credibility-wise recently.

After all, Sterling used to be the world's reserve currency : things change.
This also triggers the automatic review of the debt rating for various states and hundreds of small towns across America. A lot of cities across the US are going to lose their ability to borrow cheap money because of this, not just the federal government.
> The biggest challenge for me was pushing the server from working 99.9% of the time to 99.99% of the time, because those last few bugs were especially hard to find.

Could you expand upon this some more? How do you know the server works 99.99% of the time (or 99.9%)? Do you run regression tests using actual past requests?
I think it's great you're working on this. I'd love to see a version of CoffeeScript that lets you output code compatible with Closure compiler's strict mode, considering the significant reduction in size you can achieve.

I've been writing some of my latest stuff in strict mode style and it's kind of a burden to keep track of what you can and cannot do (plus the code is fairly ugly). I'd love to be able to just write in CoffeeScript and know I'd be compatible. (Personally less interested in using Closure as a library, but still cool that the work is being done).
It sounds like they're accepting really simple HTTP requests (event updates) and inserting a job in a queue.

Really simple + rarely changing + needs to scale to really high req/sec = perfect candidate for being written in C. Maybe as an nginx module?
S&P and Moody's don't exactly employ an "army of experts" either. It's a few analysts making a rather subjective judgment and voting. (Literally, a few).

And the investors who are actually buying US debt don't rely on ratings agencies to give them guidance, and do in fact have expertise in-house to evaluate these things.

As has been mentioned elsewhere on this thread, institutional investors don't treat US bonds like any other, subject to triggers and rules like AAA-only. It's an exceptional case that is treated differently than the others, and one rating agency's opinion is not going to make as big an impact as people seem to think.

It comes down to this: where else would they put their money?
Letting the Bush tax cuts expire next year, and winding down operations in Iraq and Afghanistan would go a long way to balancing the Federal budget.

As far as reducing the deficit goes, I have less insight into this. Except that making the Federal government's budget revenue-neutral is a critical first step.
I doubt it will be that significant. Japan has been at AA- from all rating agencies forever (and has vastly higher debt) and pays lower rates than the US. Besides, as you pointed out there are so few large countries with AAA from all agencies.

Besides, there's no new information released today, other than what some analysts at S&P think.
Bang goes the only reason to ever visit Starbucks.
>how schools and parents can instill intellectual curiosity

They can't. But the good news is that all small children possess curiosity.

Parents and schools can help by not damaging it. This entails, among other things, no bribery or punishment.
So are you saying that the US shouldn't have been AAA? Or that S&P should be regulated so that its hands are tied behind its back?

While the {S&P, Moodys, Fitch} sub-prime department obviously got completely ahead of itself modelling-wise, the corporate and sovereign departments have a lot of credibility : partly because they haven't been trying to assign values to 'a whole new way of doing things (this time it's different, etc)'.
Strictly speaking, isn't "guess my large number" sufficient to break most encryption protocols that don't rely on security by obscurity? It's just that the numbers are normally larger by dozens of orders of magnitude.
You're more liberal than conservative. I'm more conservative than liberal. Bless your heart, I agree with all of your points. At the end of the Cold War, other conservatives were making the same noises that you're making now. For their pains, their careers were destroyed by the people who run the current mainstream conservative movement. Let's take a look at those points of yours.

Points 1 & 2. Cut defense spending and all of the cool people will call you an isolationist. Sure, argue rationally all you want; the name will stick. Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending. Many of those nations have budget problems of their own. Have fun.

Point 3. Touch social spending and the cool people will call you a heartless bastard who cackles at the sight of starving widows in between gulps of baby orphan blood. Sure, argue rationally all you want; the charge will stick. Of course, this doesn't solve the money problem. Iceberg? What iceberg?

Point 4. Social Security is the third rail of American politics: If you touch it, you will die. Sure, argue rationally all you want. It will help as much as it ever has.

Long story short, the bureaucracy rules us. The administration of administrators who administer the other administers who supervise the people in charge of those who actually get real work done cannot make any concessions to reality. It would be like Gorbachev loosening the grip of Communism; one exit through the Iron Curtain and it's all over.

The Cool People will double down. They will continue to double down until it is physically impossible for them to continue doing so.