US will not Default but should be Downgraded, result is the same!

[Aussiejeff]

It's April 1st, right? I must be dreaming....the impossible has been made possible!

The US' credit rating downgraded for THE FIRST TIME SINCE 1917?? That's 94 freakin' years folks! Not only that, but with a NEGATIVE outlook (meaning further downgrades are likely) at AA+?

Oh, the irony of it all.... downgraded by ONE OF THEIR OWN AGENCIES. I bet that wiped the smiles off those US Treasury fatcat's faces last night after the tiny "better unemployment figure" rally! LOL

I'd be astonished if this didn't have a significant impact on investor sentiment come markets open on Monday. Every other financial institution that has been downgraded by the ratings agencies in recent times has suffered a significant hit to the share price. Will Treasuries or bonds get hit? Or will the S&P 500 tank?

Question is, will Moody's & Fitch ratings agencies have the guts to follow suit?

Will Obama declare a "War On Global Financial Terrorism" and arrest S&P perpetrators?

So many Q's to be answered next week.

Bring it on.....

aj

 

[Uncle Festivus]

Re: S&P Downgrades US Debt

OK so now the obvious has happened, has it been sell on the rumour buy the fact?
If US was a company it would carry a rating of C-.
Not just because of it's present ability to pay existing debt, but when you take into account future bills coming it's a C-!
Woops I can't edit Debt in the title.
Sorry, I am mildly retarded.

Actually, I think they are officially rated I - for INSOLVENT.

I don't think the US Fed uses the term DEBT either - it's now called negative collateral?

Same for default - now called re-profiling?

Up till now it's looked like it, it's smelt like it, only now there is general agreement it is **IT

 

[notting]

And of course then there's that little problem over there in Europe. Eurozone is bigger than US isn't it. I guess it all needs downgrading given it's basically worse!
Hmmmmm tap tap. Tap. Whistle. Sigh. Look at the roof. Pfffffffffffffff. Sniff. Walking up the road dazing ahead in my night gown.................... Is that you Rene?

 

[Aussiejeff]

And of course then there's that little problem over there in Europe. Eurozone is bigger than US isn't it. I guess it all needs downgrading given it's basically worse!
Hmmmmm tap tap. Tap. Whistle. Sigh. Look at the roof. Pfffffffffffffff. Sniff. Walking up the road dazing ahead in my night gown.................... Is that you Rene?

It's all so bad, we collectively want to bury our heads in the sand and make believe it IS just a bad dream.

Remember this from a long, long time ago - July 2011?

From Reuters

Moody’s said it screened 49 junk-rated companies and a few investment-grade firms in China against 20 red flags, grouped into five categories: weak corporate governance, risky business models, fast-growth strategies, poor earnings quality and audit concerns.

All 49 junk-rated firms triggered at least three red flags, with several tripping 10 or more.

Other common red flags were high levels of negative free cash flow, found at 43 companies, and aggressive growth, found at 41 companies. Aggressive growth can overextend management’s attention, company infrastructure and financial resources, Moody’s said.

Reflecting those risks, about 80 percent of companies it rates with predominately Chinese operations have junk ratings, in contrast to China itself, whose sovereign rating is Aa3, one of the highest investment grade ratings, Moody’s said.

You have to ask, if 80% of businesses in China are rated at no better than junk, how in the hell can they be sovereign rated at Aa3? It all beggars belief. Let's not even go near the corrupt India commercial sector....

 

[Aussiejeff]

Well, no surprise really that the Asian markets tanked after this lot of Gee-whizz buffoons opened their gobs to say.... stuff-all.

Group of Seven nations sought to head off a collapse in investor confidence after the U.S. sovereign- rating cut and a slump in Italian and Spanish debt intensified threats to the global economy.

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.

Stocks extended declines that have wiped $5.4 trillion off equity markets since July 26, driven investors to Treasuries and gold and rattled consumer confidence already hurt by European fiscal tightening and elevated American unemployment. The European Central Bank signaled it will buy Italian and Spanish bonds, and Japan warned it may intervene again to stem yen gains.

“The markets can’t see a light at the end of tunnel” even after the G-7 statement because the pledge of cooperation isn’t enough, said Atsushi Ito, a senior rate strategist in Tokyo at UBS AG, who previously worked at Japan’s finance ministry. “Each nation has to come up with specific and convincing measures but it will probably take a while.”

http://www.bloomberg.com/news/2011-...y-measures-to-stabilze-economies-markets.html

What, exactly, does "take all necessary measures" entail, pray tell?? This sort of fumbling, blowhard empty rhetoric at such a critical juncture in time seems just plain stoopid to me.

 

[notting]

Do you think that is why China's flag is red?

 

[DB008]

Jim Rogers: Don't See How US Can Ever Pay Off Debts

The U.S. doesn't deserve a AA-plus credit rating, much less triple-A, commodity bull and noted investor Jim Rogers told CNBC on Monday.

More on the link above...