Results 1 to 2 of 2

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

  1. #1
    Senior Member AirborneSapper7's Avatar
    Join Date
    May 2007
    Location
    South West Florida (Behind friendly lines but still in Occupied Territory)
    Posts
    117,696

    Egan-Jones Downgrades US From AAA To AA+

    Egan-Jones Downgrades US From AAA To AA+

    Submitted by Tyler Durden
    07/18/2011 10:09 -0400
    76 comments

    While others huff and puff, and threaten to do what had to be done ages ago, the one truly independent and capable NRSRO, Egan-Jones, downgraded the US from AAA to AA+ over the weekend.

    From the release: http://www.egan-jones.com/client/downlo ... 110716.pdf

    Real GDP increased at an annualized rate of 4.0% in Q1 2011, following an increase of 3.5% rise in the prior quarter. Personal consumption expenditures, exports, and nonresidential fixed investment contributed positively to growth during the quarter. Meanwhile, imports rose sharply. In the March 2011 quarter, trade in goods and services resulted in a deficit of $562B, many because of the high price of petroleum. However, the major factor driving credit quality is the relatively high level of debt and the difficulty in significantly cutting spending. We are taking a negative action not based on the delay in raising the debt ceiling but rather our concern about the high level of debt to GDP in excess of 100% compared to Canada's 35%. Nonetheless, since the US's debt is denominated in dollars, a hard default is unlikely.

    And while there is much more in the full report (mind you nothing of it is surprising to anyone), the post script is spot on:

    Nota Bene

    History has proven that defaults on domestic public debt do occur. In fact, seventy out of three hundred twenty defaults since 1800 have been on domestic public debt (1). Egan-Jones does not view a country's ability to print its own currency as a guarantee against default. Additionally, Egan-Jones generally views cases of excessive currency devaluation as a de facto default.

    Luckily for the status quo there are no trillions in structure finance and money market instruments tied to the AAA rating of the US. If this downgrade had been performed by Moodys or S&P, or even France-owned Fitch, today would have been a bitter appetizer of what is ultimately coming.

    http://www.zerohedge.com/article/egan-j ... -us-aaa-aa
    Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)

  2. #2
    Senior Member HAPPY2BME's Avatar
    Join Date
    Feb 2005
    Posts
    17,895
    Our debt is not the paltry $15 Trillion you see on Fox and CNN every night.

    It is over $50 TRILLION.

    In other words, our rating is FFF(-)
    Join our FIGHT AGAINST illegal immigration & to secure US borders by joining our E-mail Alerts at http://eepurl.com/cktGTn

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •