Germans Downgrade US Government Bonds: AAA to AA

I don't know what's worse, the fact that the United States' credit rating is STILL far above investment grade or the fact that people still listen to what rating agencies have to say.

China's rating agency was much more extreme about it, which is far more frightening than Germany not liking our bonds.

I have a feeling that agencies are careful with ratings because we're still a military superpower... and someone lowering our rating could easily be portrayed to the American public like "financial terrorists".
 
I don't know what's worse, the fact that the United States' credit rating is STILL far above investment grade or the fact that people still listen to what rating agencies have to say.

I know it's a popular theme to be bearish and anti-US government--trust me, I'm an anarchist. But I find it funny we listen to the analysis of people like Peter Schiff and Jim Rogers who say rating agencies have been wrong for years, yet we find it significant that a rating agency cut the US credit rating from an A++ to A+. In the investment world, the United States still has a 4.0 GPA with a AA rating. We just aren't high school students taking college classes.

Ratings agencies are important because they're empowered by government. Regulators around the world set rules for portfolio managers about risk management. These rules are obviously based on the credit rating agencies.

Downgrades are important in much the same way share price is important. Fall below $5.00 a share and mutual funds can't buy in. If debt falls below A, then most pensions can't buy in. That is, in a nutshell, why this is a pretty big deal.
 
This.

The sad fact is that the credit agencies, being empowered by govt to rate govt debt (in part), are instructed to yell FIRE only once the flames start to hit the markets.

That or they are STUPID AS FUCK.

AAA Greek bonds all the way until they were junk...Oh yeah...by the way...They are junk now...SOrry bond holders, it's haircut time!

Ratings agencies are important because they're empowered by government. Regulators around the world set rules for portfolio managers about risk management. These rules are obviously based on the credit rating agencies.

Downgrades are important in much the same way share price is important. Fall below $5.00 a share and mutual funds can't buy in. If debt falls below A, then most pensions can't buy in. That is, in a nutshell, why this is a pretty big deal.
 
Sounds like it's time to stop funding their military needs so they can have an extravagant welfare state, not pay for it, and get snotty with us.

Letter to Germany:

Good luck with the whole military thing.

Sincerely Yours,

The guys who USED TO welfare you a military, America.
 
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