Posted on 03/15/2010 12:43:32 PM PDT by ksm1
Bloomberg headline: “U.S., U.K. Move Closer to Losing Rating, Moody’s Says.” Watch out. But then again, is this really anything new?
Notable quotes:
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
(Excerpt) Read more at frontieroutlook.com ...
Say what? The "fiscal stimulus" is money sucked out of the private sector (taxes) or removed from the capital markets (government debt) in order to keep the bloated public sector fat and happy. (We truly are ruled by government employees unions.)
Reversing the "stimulus" would be a huge step in the right direction for recovery, coupled with tax cuts and reigning in government spending.
... it’s about time!
Honestly, there needs to be SOME consequence for being so financially irresponsible.
The opinion of the Moody’s guy, not me, and probably not the blogger either.
I know, I was just venting at the Moody’s guy.
We all know how astute those Moody’s folks proved to be during the housing bubble...
Time to short treasuries.
Nobel Peace Prize in Economics for you!
hmmmm Piere in London says the US may get downgraded...
Thanks for the hot tip frenchie.
What he fails to realize is that Moodys and all rating agencies grade on a curve. Durring the boom, there was graded inflation, to be sure, but it was never an scientific absolute. The safest bond (not SAFE, just safest) will get AAA rating. The only way for US Treasuries to fall below AAA is for the world to believe some other countries bonds are significantly safer and available in sufficient quantity.
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