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Please pass the hotsauce for my crow - US AAA rating

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August 05, 2011 – Comments (6)

Well I'll be a monkey's uncle. I never thought the rating agencies would do it.  But S&P actually pre-emptively lowered the US debt rating.  I am beyond shocked. I didnt think they would do it unless the US actually defaulted as I haven't known the rating agencies to do anything pre-emptively.

 

S&P downgrades US credit rating from AAA

 

Granted I would have lowered the US's rating a long time ago and if it were up to me the US bonds would be barely investment grade, but this shows progress.  I'm guess Moody's is next, then Fitch.  But wow....I still need to recover from the shock. 

6 Comments – Post Your Own

#1) On August 05, 2011 at 9:33 PM, dwot (56.31) wrote:

Timing is interesting, giving the market the weekend to digest the news...

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#2) On August 05, 2011 at 9:37 PM, outoffocus (23.12) wrote:

The skeptic in me can't help but think this is merely political...

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#3) On August 05, 2011 at 10:12 PM, Varchild2008 (85.49) wrote:

Political or not this helps and I've been SCREAMING for this to happen for quite a long time on my fool blog.

Short of a credit ratings downgrade by the three ratings agencies, I do not know what would finally get Washington D.C. to do something meaningful to right this ship!

They pass a debt deal that doesn't cut a single penny worth of debt and doesn't have a balanced budget and has the GALL to create this "Super Duper Trooper Committee" that must come up with another debt deal to fix the crappy one we are stuck with or otherwise everyone gets soaked.

Excellent job Washington D.C.!!!!  Whadda ya do for an Encore?
Err wait.. On second thought I'll pass on the Encore.

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#4) On August 05, 2011 at 11:44 PM, ikkyu2 (99.36) wrote:

You will get an encore, though.  It will involve more borrowing, at higher costs to the American taxpayer because the debt is lower rated.  Preventable, avoidable, needless, and costly to America.  Thank your Republican Congressmen.

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#5) On August 06, 2011 at 8:14 AM, dbjella (< 20) wrote:

 ikkyu2 

 Thank your Republican Congressmen.

What do you mean by that? 

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#6) On August 06, 2011 at 10:05 AM, davejh23 (< 20) wrote:

I think ikkyu2 is blaming this on Republicans since the debt deal included no tax increases.  We're already on the verge of a recession, so the Dems have taken the opportunity to preemptively blame the next recession on the Repubs.  They ignore the fact that tax increases also decrease aggregate demand.  They whine about massive cuts, even though the debt deal won't cut a single penny from federal spending.  They whine about Rebup's contribution to the debt, and ignore the larger problem of unfunded liabilities that equal several times our current debt level and which they can't agree to rework.  They fail to realize, though they have a few different beliefs, that they're the same as their Republican colleagues...incompetent.  Both sides claimed victory for the debt deal that was worked out, but both parties failed us. 

The funny thing is, all they had to do to avoid the downgrade was promise cuts of $4 trillion+.  Even if they never intended to follow through, we probably would have avoided the downgrade.  CONgress knows it, so it looks like the non-deal debt deal and the downgrade that followed was part of their plan.

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