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Senate Democrats' inclusion in their proposed debt package of $1 trillion in savings from the wars in Iraq and Afghanistan may not satisfy ratings agencies threatening a credit downgrade since the wars were expected to end with or without a debt deal. The budget gimmick is one that has been used by both parties. President Obama and House Speaker John Boehner had earlier considered employing it during discussions that have since broken down. Now Senate Democratic Leader Harry Reid is using the trick in his $2.7 trillion deficit-reduction plan, according to aides. Boehner has not indicated where he would draw...

A lot of people assume that if the ratings agencies downgrade the credit rating of the United States, it will trigger a sell-off of Treasurys. Some even suppose that a sell-off would be automatically triggered by regulatory and fund charter requirements. Fortunately, this isn’t true. It’s very likely that a downgrade of the credit rating of the U.S. would trigger a sell-off, but it’s far from clear that investors would sell U.S. government debt. More likely the investors would sell risk assets—equities, high yield corporate bonds, mortgage securities—and actually buy U.S. government debt. What's certain is regulations won’t require most...

  Cutting a credit rating is significantly different that placing it on ‘watch’ or ‘under review’.Most readers are likely fully aware that Standard and Poor’s and Moody’s have sent out serious warning signals about the potential downgrade of the United States AAA credit rating.That said, another SEC officially recognized ratings entity has gone one step further and actually lowered Uncle Sam’s standing by one notch.What firm is so bold and brazen to send this volley across Capitol Hill and down Pennsylvania Avenue? Egan-Jones.Unlike the supposed brand name rating agencies which did little to help ordinary investors going into our economic...

Another major bond rating firm on Monday reiterated its threat to downgrade the U.S. government to a B-plus rating if the debt ceiling isn’t raised by August 2 and the government defaults on its debts. The warning from Fitch Ratings comes after Moody’s and S&P warned last week that they would lower the U.S. rating from the top mark of AAA if the country is unable to repay its debts next month. Fitch said Monday that it will place the U.S. rating in what it calls “ratings watch negative,” a status that can lead to downgrading in three-to-six months. The...

The man who yesterday got into a heated argument with the chairsatan on whether gold is or isn't money (a Bernanke response already mocked to death so we will leave it alone), shares his take on the most recent bout of scaremongering by Moody's (with S&P doing in private today what Moody's did in public yesterday) with Bloomberg TV's Erik Schatzker. When asked if the American AAA rating is worth saving, his reply: "probably not." Paul continued: "I think if you had a market evaluation on this issue, it should have marked down a long time ago." The reason the...

Debt limit aside, borrowing to pay off loans won't work, agency says The US' sovereign credit rating is likely to be downgraded regardless of whether the US Congress reaches an agreement on raising its statutory debt limit, Chinese rating agency, Dagong Global Rating Co Ltd, said on Monday. "If the debt limit is raised and the public debt continues to grow, it will further damage the US' debt-paying ability, which is a key factor in Dagong's evaluation, and we will consider lowering its ratings accordingly," said Guan Jianzhong, chairman and CEO of Dagong. "If the raised limit fails to pass...

WASHINGTON (Reuters) - Moody's Investors Service jolted White House debt talks on Wednesday with a warning that the United States may lose its top credit rating in the coming weeks, piling pressure on Washington to lift its debt ceiling. Underscoring the effect a potential default would have on financial markets, Federal Reserve Chairman Ben Bernanke said if Washington failed to raise the U.S. borrowing limit in time, the United States would pay creditors first and stop benefits such as payments under the Social Security retirement program.

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order. "In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying. Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said. Guan did not immediately respond to AFP...

Dear Mr President, When you're head over heels in debt and your credit cards are maxed out and your credit rating is falling, you don't borrow more money. If you do, your chances of defaulting or going bankrupt are greater and your credit worthiness decreases. Don't raise the limit. Don't borrow. Cut the spending, stupid! You want to spur jobs and growth? Easy. Cut the spending, cut the government, cut the regulations, cut the red tape, cut the bureaucracy, lower the taxes and get the hell out of the way! Our people will produce if allowed. And what's this crap...

Standard & Poor's said Thursday that California sits at an "important crossroad" for its credit rating depending on how it deals with its structural deficit problems in the coming weeks. California has never defaulted on general obligation bond repayment, but the state's A- rating already ranks lowest in the nation in the wake of annual budget woes.

W.H. warns of debt 'calamity' By ABBY PHILLIP | 05/18/11 4:12 PM Updated: 05/18/11 4:56 PM In an effort to clamp down on “misinformation” about the debt ceiling and to ratchet up the pressure on Congress to act, the Obama administration said Wednesday that there is no “Plan B” for the government if Congress fails to raise the borrowing limit. Unlike the budget standoff in March, where a plan would have gone into place if the government shut down, an administration official warned that there is no “secret plan” that would kick in if the government runs out of borrowing...

Standard & Poor's warning last week of a possible downgrading of America's credit rating sent tremors through markets worldwide -- and underscored the nation's short- and long-term deficit and debt woes. The warning came just days after the speech in which President Obama basically dismissed the House GOP's comprehensive long-term budget outline -- which addresses the need to restrain growth in discretionary spending and entitlements. Instead, the president just focused on raising income -- and possibly payroll -- taxes on the wealthiest Americans. On cue, administration supporters pushed the usual talking point: The wealthy aren't paying "their fair share" since...

Fox News analysis of Standard & Poor's warning the U.S. over debt. Video available at link.

The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said. Treasury Department officials had been discussing with S&P whether the ratings agency should change its outlook on the United States to “negative” from “stable,” an indication that the country could lose its crucial AAA rating in coming years over its soaring debt levels. Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits,...

Tax Deal: The media are touting a rating agency's schizophrenic claim that keeping the Bush tax rates helps the economy, but hurts the country's credit standing. Are ratings firms even relevant anymore? Manhattan Institute senior fellow Nicole Gelinas, in her richly detailed analysis of the roots of the financial crisis, "After the Fall: Saving Capitalism from Wall Street — and Washington," pulls back the curtain and exposes the ugly reality of the once all-powerful credit ratings agencies Moody's, Fitch and Standard & Poor's. "Reliance on ratings agencies contravenes market principles," Gelinas warns. "The ratings-agency world is small and homogeneous, populated...

Moody's Worried US Tax Cuts Could Become Permanent Tuesday, 07 Dec 2010 01:37 PM Moody's Investors Service is worried the extension of U.S. tax cuts agreed by President Barack Obama and Republican leaders could become permanent, hurting U.S. finances and its credit ratings in the long run. Steven Hess, Moody's lead sovereign analyst for the United States, said on Tuesday doesn't foresee any change in the U.S. AAA ratings in the next 18 months to two years. He is, however, concerned about "what's going to happen in two years," when the extensions are set to expire again. "The timing two...

Tuesday, November 09, 2010 10:08:03 AM (CH) Chinese rating agency Dagong Global Credit downgrades US credit rating due to QE program (update) - Chinese press - Cut long term US sovereign rating one notch to A+ from AA, with a negative outlook. - "The serious defects in the U.S. economy will lead to long-term recession and fundamentally lower the national solvency. The credit crisis is far from over in the United States and the U.S. economy will be in a long-term recession." Weaker dollar will hurt US ability to attract dollar capital reflow. "In essence, the U.S. government's move to...

France warns on credit rating David Stamp LONDON Sun May 30, 2010 12:08pm EDT LONDON (Reuters) - France admitted on Sunday that keeping its top-notch credit rating would be "a stretch" without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit. Euro zone trade unions are preparing for possible confrontations in the coming week if governments impose austerity measures or labor reforms unilaterally. But ministers made clear they were ready to take unpopular steps to prevent the Greek debt crisis spreading to their economies, although doubts are growing about...

Sovereign ratings on UK, US, Japan under fire from credit investors Author: David Evans Source: Credit | 12 May 2010 /snip After Greece, Portugal and Spain suffered rating downgrades in April due to escalating fiscal problems, investors ask if the same standards are being applied to advanced economies. While there is a broad agreement among investors that credit rating agencies were justified in downgrading peripheral European sovereigns last month, investors are questioning why advanced economies such as the UK, the US and Japan – which face mounting fiscal problems of their own – have managed to retain their triple-A ratings....

America’s current predicament is that it borrows money from countries or individuals to finance many of its expensive obligations, including financing the $862 billion stimulus bill as well as the wars in Iraq and Afghanistan. But what would happen if America had to pay higher interest rates on all future borrowing? This is the question that some people in the federal government have to ponder, as influential rating agencies such as Standard & Poor’s and Moody’s have both recently voiced their view that America’s AAA rating is not guaranteed or in fact even assured. The massive and growing debt obligation...