USA loses AAA credit rating!!

[singveld]

I saw the news and was shocked, a US company sabot own country economic? How can it be. Check the CEO of the company, an ah neh. Yup. Now i understand.


US loses AAA credit rating after S&P downgrade Washington has been locked in months of partisan bickering over the debt ceiling One of the top credit rating agencies, Standard & Poor's, has downgraded the United States' top-notch AAA rating for the first time ever.

S&P cut the long-term US rating by one notch to AA+ with a negative outlook, citing concerns about budget deficits.

The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough.

Washington was locked in months of acrimonious partisan bickering over a bill to raise the US debt ceiling.

As rumours swirled earlier about the downgrade, unnamed officials in Washington had told US media that S&P's analysis of the American economic situation was deeply flawed.

Correspondents say a downgrade could further erode global investors' confidence in the world's largest economy, which is already struggling with huge debts, unemployment of 9.1%, and beset by fears of a possible double-dip recession.

S&P said in its report issued late on Friday: "The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilise the government's medium-term debt dynamics.

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."

 

[singveld]

Wed, Aug 3 2011
NEW YORK (Reuters) - The United States lost its top-notch AAA credit rating from Standard & Poor's on Friday, in a dramatic reversal of fortune for the world's largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

COMMENTS:

DAVID MEGER, VICE PRESIDENT AND DIRECTOR OF METALS TRADING WITH VISION FINANCIAL MARKETS IN CHICAGO

"One would expect the S&P downgrade to positively impact safe haven assets like gold, which continues to lead the safe-haven asset class. But, because the move was widely expected, we probably won't see a huge move on this news.

"The industrial metals, like copper, may get hit from the move, because it will add to the already weak economic picture that sent it down today. Silver has been a laggard, and it has an industrial component, so it may not be able to benefit as much as gold.

"This will put even closer scrutiny on Bernanke and the Fed this week to see if they will come up with QE3 or some type of stimulus plan."

DEAN POPPLEWELL, CHIEF CURRENCY STRATEGIST AT OANDA IN TORONTO

"No one expected them to do it. They made sure Monday will not be boring! The dollar's woes will continue. Markets will apply further pressure on the dollar and equities. Investors will want to own the front end of the U.S. curve and sell 10s and bonds. The flight to quality trade will be extended."

BORIS SCHLOSSBERG, DIRECTOR OF CURRENCY RESEARCH AT GFT, NEW YORK

"It's probably going to put a little bit more stress on the dollar when we open in Asia on Sunday night. It's the first time in history that the S&P has downgraded the United States. Even though most of the investors are not required to hold a triple-A rating, there' still a significant minority that may decide to liquidate at least some part of their U.S. holdings now that the downgrade is in effect. At least initially, the impact on the market will be negative because there will some forced liquidation of U.S. assets. I don't think this is an unexpected move."

(About the timing of downgrade)

"They want the market to absorb the news over the weekend. It will mitigate the shock of the announcement. (Still), it may cause a pretty steep sell-off in Asia when we open as the market considers the significance of the news."

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK

"It's not totally unexpected. It's just the suddenness of the move and according to the S&P logic, it's justified. I don't know that it's unanticipated by the markets. There might be a mild reaction, but it won't be very pronounced. The timing is a little accelerated but it's no surprise. The S&P was looking for a longer term fiscal adjustment and that has not materialized and is unlikely to materialize before the election."

IAN LYNGEN, SENIOR GOVERNMENT BOND STRATEGIST, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT

"The Treasury market to a large extent has anticipated either an official downgrade of the U.S. credit rating to double-A plus, or the looming threat. To some extent I would expect when Tokyo opens on Sunday that we will see an initial knee-jerk sell-off (in Treasuries) followed by a rally. The reason I would call it that way is because the Treasury market has shifted from trading off the flight to quality dynamic to trading off of U.S. fundamentals, and U.S. fundamentals -- despite the slightly better than consensus employment report today -- continue to suggest ongoing broader economic concerns with the potential for a double-dip recession.

"When you look at what has happened to other triple-A rated countries who have lost that rating it has tended to be a bullish period, which has been characterized by lower interest rates. That is more a factor of the broader economic expectations than it is of what the ratings agencies are saying.

"In the credit crisis of 2008 and 2009, the ratings agencies were dealing with a credibility issue. The fact that they have now downgraded the United States suggests to me that they are now going to be dealing with a relevance issue, because the fact of the matter is that 10-year (Treasury note) yields are near 2.5 percent, and that in no way suggests a lack of sponsorship for U.S. debt."

PAUL DALES, CHIEF U.S.ECONOMIST, CAPITAL ECONOMICS, TORONTO, CANADA

"I don't think it will mean too much to be honest. There will probably be an initial market wobble -- fx markets might struggle and Treasury yields might fall a bit.

"The bigger picture is really that the world is not much different than it was a few hours ago. People are simply going to focus on what is happening on the ground and that is the economic news."

VASSILI SEREBRIAKOV, CURRENCY STRATEGIST AT WELLS FARGO IN NEW YORK

"It's not entirely unexpected. I believe it has already been partly priced into the dollar. We expect some further pressure on the U.S. dollar, but a sharp sell-off is in our view unlikely. One of the reasons we don't really think foreign investors will start selling U.S. Treasuries aggressively is because there are still few alternatives to the U.S. Treasury market in terms of depth and liquidity. It will probably put additional buying pressure on other safe-haven currencies such as the Japanese yen and Swiss franc. It will probably complicate the task for Japanese and Swiss authorities who are trying to curb currency gains."

STEVE BLITZ SENIOR ECONOMIST ITG, NEW YORK

"I don't know how seriously everyone is going to take it. There is S&P and there is Moody's and we don't know if Moody's is going to follow with a downgrade of its own.

"If you think about the things they have rated AAA over the past few years, then you think about the U.S. economy with 15 trillion dollars of income every year and it's never not paid its debt.

"I think maybe S&P is under a lot of heat. I think the other side of it is they are also ready and willing to downgrade the whole financial system because the whole financial system holds its capital in Treasuries and it leverages itself off of that capital."

WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY

MANAGEMENT, SALEM, MASSACHUSETTS:

"I think we are going to test the system on Monday. One of the problems that everyone is worried about with a downgrade is there is a lot of investment guidelines where you are forced to maintain certain credit quality, and if you are bumping up against it, all of a sudden you are going to fall below your guidelines, so that means you probably have to buy more Treasuries and probably sell corporate debt or something like that.

"The interesting thing is going to be the impact on the municipal bond market because a lot of municipal bonds have as collateral U.S. Treasury securities. It is a tiny market and it is easily spooked but it is heavily invested in by retail investors. That is going to be the one I am going to be keeping an eye on.

"When they finally dealt with the debt ceiling they obviously kicked the can down the road, and the market did not need that. I thought at the time when they released it there would have been a downgrade.

"I don't think it is a great shock. If it didn't happen now I think it probably would have happened in a couple of months.

"A double-A plus is not a big issue, but it is going to have an impact. There are going to be ripples going across the pond."

 

[singveld]

Ah neh cut usa rating- world economic going down fast

US loses triple-AAA rating for first

The United States' credit rating was cut for the first time when Standard and Poor's lowered it from triple-A to AA+, citing the country's looming deficit burden and weak policy-making process.

Standard and Poor's on Friday revised the nation's rating downwards to a AA+ with a negative outlook, despite a push back from the White House, which said its analysis of the US economy was deeply flawed.

It was the first time the US was downgraded since it first received a triple-AAA rating from Moody's in 1917; it has held the S&P rating since 1941.

Moody's and a third ratings agency, Fitch, say they continue to study the deficit plan to see if the US merits being kept in their ranks of AAA countries.

The blow came after the White House, Democratic and Republican legislators finally agreed on Tuesday to a deal to raise the nation's debt ceiling after months of wrangling that sent jitters rippling through the global economy still trying to recover from the 2008 recession.

A debt downgrade will be a symbolic embarrassment for President Barack Obama, his administration and the Americans, and could raise the cost of US government borrowing.

Since the dollar and US Treasury bonds are so central to world trade and finance, a downgrade theoretically could rock the global economy, which is already being battered by the eurozone crisis.

But some analysts have questioned whether a ratings cut would impact demand for US debt, have dismissed the raters as having low credibility, and questioned whether the markets would take much notice.

Ratings agencies Moody's and Fitch both reaffirmed their AAA rating of US debt shortly after Obama signed a bill raising the debt ceiling on Tuesday.

The downgrade technically signalled that it is more likely than before that the United States could renege on its debts.

There was no immediate comment from the White House or the Treasury on the reports.

But a source close to the discussions said: "There are deep and fundamental flaws with the S&P analysis."

S&P is considered the most influential of the three major rating agencies.

It has been the most aggressive in moving towards a US downgrade. On April 18, S&P lowered its outlook attached to the AAA rating from "stable" to "negative", citing the absence of a credible plan for reducing Washington's huge fiscal deficits.

In July, during the protracted standoff over raising the government's debt ceiling between Obama and Republicans, S&P placed the United States on credit watch and warned there was "at least" a one-in-two chance that it would cut the rating within 90 days.

S&P also suggested any deficit plan needed to trim about $US4 trillion ($A3.84 trillion) over 10 years; the plan that has passed only envisages cuts of up to $US2.4 trillion.

There are currently 17 nations boasting a AAA debt rating from S&P along with three other territories - Hong Kong, Guernsey and the Isle of Man.

Moody's, the oldest credit agency, placed the US on a downgrade watch on July 13 and upheld its rating on Tuesday after congress passed the last-minute deal which avoided a debt default.

But Moody's also added a "negative" outlook to its rating, warning it could still downgrade the United States if the deficit-slashing plan goes astray, if fiscal discipline weakens, or if growth deteriorates significantly.

Fitch opened a review of the US rating on June 8 and said it would be completed by the end of August.

After the debt deal was clinched, Fitch said the United States would keep its AAA rating but warned it was under review.

 

[Loofydralb]

Re: Ah neh cut usa rating- world economic going down fast

Interest rates will shoot through the roof soon.

Everybody is dumping the dollar, central banks, pension funds, China, me.

 

[singveld]

Re: Ah neh cut usa rating- world economic going down fast

I die lah, i did not convert my hard cash into gold.

 

[soikee]

Re: Ah neh cut usa rating- world economic going down fast

Can expect Dow to plunge another 500 pts on Monday and 100 pts for STI.

 

[psy83]

Re: Ah neh cut usa rating- world economic going down fast

Anyways, Is this the start of a recession?

 

[bushtucker]

Re: Ah neh cut usa rating- world economic going down fast

Dow jones indus. Avg 11,444.60 60.93 0.54%
s&p 500 index 1,199.38 -0.69 -0.06%
nasdaq composite index 2,532.41 -23.98 -0.94%

 

[neddy]

Re: Ah neh cut usa rating- world economic going down fast

Anyways, Is this the start of a recession?

America has never recovered from the GFC recession. Just that there are too many optimists around.

 

[GOD IS MY DOG]

Re: Ah neh cut usa rating- world economic going down fast

even the elite that rule the world are dropping hints now......................

so the rest of the world cannot say it was manipulated........................


the elite are telling us.....................a global depression is coming.......................


when the USD crashes.....................it's game over........................

 

[RonRon]

I remember Sam Leong called for a buy on friday claiming contrarain investing. Come monday his backside will kana split into 2

 

[johnny333]

I remember Sam Leong called for a buy on friday claiming contrarain investing. Come monday his backside will kana split into 2

If I had the money I would also be looking for deals next week as a long term investment.

Buying american blue chips is better option than investing into the IPO of Sheng Shiong

 

[Devil Within]

It's a matter of time that they will lose another A rating. Look at how much they've got to repay their debts here... http://usdebt.kleptocracy.us/