Comments for Credit Rating Agencies That Rated Subprime Junk as Investment Grade Warn U.S. Over Downgrade at http://www.cepr.net , comment 1 to 9 out of 9 comments http://www.cepr.net Tue, 21 May 2013 05:05:49 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6431 My point is that it is questionable that the Congress has the legal power to make the government default on its obligations, which the Congress itself created. These obligations are then constitutionally protected, and thus the responsibility of all 3 branches of government to ensure payment of. - Calgacus Thu, 13 Jan 2011 15:11:10 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6429 We are about to find out, aren't we. So far, the signs are not all that good and just ask Newt about that debt ceiling thingy. BTW, Newt could possibly be Pres in 2012. Now you see the need for insurance against default? - paul Thu, 13 Jan 2011 11:59:07 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6428 Sure they gave up their sovereignty, but methought they were tired of speculators jacking their currencies around all over the place and making long term planning and trading well nigh impossible. Help me out here someone. Doesn't that echo in anyone's brain? I'm no expert (in fact, I'm no economist) but I seem to remember the Germans in particular complaining about American hedge funds and investment banks et al playing devious tricks with European currencies back in the pre-Euro days (which is not to say that adopting the Euro didn't mean jumping from the frying pan into the fire). - diesel Thu, 13 Jan 2011 11:56:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6426 Somebody should tell Moody's that "the validity of the public debt of the United States, authorized by law ... shall not be questioned". Paul, the Constitution's 5th & 14th Amendments and case law makes US debt uniquely safe and resistant to political tampering. That we issue fiat currency at will means that unless the entire government loses its mind or an asteroid hits the US, the risk of default is zero, unlike Germany, which insanely, like the rest of Europe, gave up its right to create money at will when it joined the Euro. - Calgacus Thu, 13 Jan 2011 09:45:45 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6420 Apparently the rating agencies are ITCHING to get charged under RICO - they've stepped it up from conspiracy to defraud investors to "that's a nice country you've got there - would be a shame if something were to HAPPEN to it..." Mafioso tactics. - Matt Thu, 13 Jan 2011 07:35:19 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6417 The article did note that markets completely ignored the rating agencies' prior warnings and seem to be ignoring them now. OTOH, the WSJ accepted Moody's seriously misleading stats: "The most recent official figures show the ratio of federal debt to revenue averaging 397% of gross domestic product in the period to 2020, while the ratio of interest to revenue will rise to 17.6% by 2020, from 8.6% in the last fiscal year. "These figures are "quite high for an Aaa-rated country," Moody's said." The true measure of creditworthiness, apart from credit history - when did the U.S. last default - is debt service to income ratio, i.e., the interest cost for the federal debt divided by the GDP, which is currently less than 3%. No wonder the market prices the risk of a U.S. default less than the risk of a German default. - paul Thu, 13 Jan 2011 06:15:24 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6412 If such an assessment is based on "ability to pay", then any downgrade would be tatamount to S&P and Moody's saying they are idiots. The US always has the ability to pay, as it has a fully sovereign fiat currency, and can issue additional currency at will and as necessary. If the assessment is that politians will willfully default when there is no economic necessity, that is another matter. Bit if this is the basis for a downgrade, it should be stated as the basis so as not to cloud what the exact nature of the issue is. - Benedict@Large Thu, 13 Jan 2011 05:27:51 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6407 This isn't the first time credit agencies have threatened the government. In 2008, maybe 2009, a congressman started asking angry questions about the credit rating agencies's role in the collapse. He asked for an investigation. Sorry, I don't remember his name. Moody's CEO thereupon threatened to downgrade US rating. Congressional pursuit of this issue collapsed. - JohnT Thu, 13 Jan 2011 02:47:17 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/credit-rating-agencies-that-rated-subprime-junk-as-investment-grade-warn-us-over-downgrade#comment-6405 Just when credit rating agencies were on the verge of issuing a junk bond rating to the USA for its crippling debt, an unexpected surge of investment and consumer spending reversed the deep jobless recession, sending the economy back to full employment and a balanced budget, accompanied by triple AAA+++ ratings. When asked for an explanation, the agencies explained that under recent court rulings, since ordinary people now had the same access to jobs, income and wealth through Robo-Validation as the ultra-rich, free markets interpreted the flood of higher qualifications as justification for redistribution of income, which in turn sent the Marginal Propensity to Consume and Invest to new high levels with explosive multipliers. - izzatzo Thu, 13 Jan 2011 02:38:41 +0100