Don’t look down: Ratings agency says they could downgrade U.S. too

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The negative outlook indicates a slightly greater than 50 percent chance of a downgrade over a two-year horizon.
Credit ratings agency Fitch • Explaining the negative outlook they gave the U.S.’ AAA credit rating. Why the lower outlook? Well, they say there’s “considerable uncertainty surrounding the economy’s potential output.” Well, there won’t be as long as we can figure out a way to turn riots over $2 waffle irons into a sustainable moneymaking endeavor for the U.S. economy at large. We’re sure we can make it happen. Fitch’s downgraded outlook follows S&P’s straight-up downgrade a few months back. source

Posted by Ernie Smith • 0 Comments • Permalink

19 Jul 2011 14:42

McConnell plan may not be enough for Moody’s: Some cautionary news on the United States’ triple-A credit rating today — Moody’s has been pretty open in saying the U.S. is risking a downgrade over the expanding debt and deficit. Senator Mitch McConnell’s fail-safe debt limit plan, which amounts to a transfer of power from congress to the President, would only occur if the “grand deal” President Obama yearns for (which would deeply cut spending and increase revenues at about a 3:1 ratio respectively) fails to catch on. Moody’s analyst Steven Hess estimates a whopping $4 trillion in deficit reduction might be needed to secure the triple-A rating. “I’d rather not opine on numbers in between,” he said. source

Posted by Chris Tognotti • 0 Comments • Permalink

Looking at the gulf between the parties, it has never been wider than now. It takes a lot of political will to bridge this gulf.
Standard & Poor’s global head of sovereign ratings David Beers • Suggesting that both parties aren’t going far enough to fix their deficit problem which could lead to a decreased credit rating down the line. Essentially, they think that the two parties are so divided that they won’t solve the problem. Standard & Poor has downgraded the credit rating of many countries of late, most recently Britain. source

Posted by Ernie Smith • 0 Comments • Permalink

Because the U.S. has, relative to its ‘AAA’ peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.
A statement from the Standard & Poor’s • Revealing that, while they affirmed the United States’ spectacular “AAA” credit rating, they were suggesting the the outlook of said credit rating could go negative in the future. They want the country to figure out its budget mess by 2013. “If an agreement is not reached and meaningful implementation is not begun by then,” they write. “this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns.” Feel that? That’s the grumble of the money beast, wanting to be fed. source

Posted by Ernie Smith • 0 Comments • Permalink