Thread: US AAA credit rating downgraded

Originally Posted by robuzo

The ratings agencies have zero credibility.

I can see you have read rants of this top EU politician. President isnt it Barroso... whining about why ratings go down for greece or ireland or spain or italy because it is all an Anglo-Saxon conspiracy... think how a man of that calibre can be leading europe... Euro will sink...

Originally Posted by nostromo

Originally Posted by robuzo

The ratings agencies have zero credibility.

These rating agencies are professionally run companies and their product is to evaluate risks to their customers. Not to specific governments.

they are and they do, but the kind of announcement we see these days about government ratings are more about PR and advertising, or to make a story

apparently their influence since the collapse of the subprime and accompanying CDOs tranches has also collapsed among professionals.

Their lack of communicability and their PR stunts are definitely not helping for them to make a credible case

Like I said before, forget about 'facts and figures'...
Does anybody seriously think that the USA's credit rating should NOT have been 'downgraded?'
The system is fcked/doomed...
Why waste time arguing about it?

Originally Posted by Butterfly

doesn't mean much.

Translation = I don't understand it.

Originally Posted by Butterfly

means fuck all,

Translation = I'm totally out of my depth.

Originally Posted by Neo

Originally Posted by Butterfly

doesn't mean much.

Translation = I don't understand it.

Originally Posted by Butterfly

means fuck all,

Translation = I'm totally out of my depth.

hahaha, couldn't get over your ownage of CDS

how are those debt bets you were taking on those Irish banks ? did you make a fortune yet ?

guess that went flat despite your silly claims

Actually, with all the fcking around, it reminds me of Nero fiddling while Rome burns...
History repeats itself...

OZ gold... priceless.

I can't recall you owning me once, unless you include me having better things to than listen to you squirm your way out of your own bullshit, then yes it happens quite a lot.

Originally Posted by Neo

OZ gold... priceless.

I can't recall you owning me once, unless you include me having better things to than listen to you squirm your way out of your own bullshit, then yes it happens quite a lot.

yes OZ is not KG, what was your point again ?

oh wait, you meant Australia

when you look at the performance of republican John Beurhner >spelling<
then you gotta worry.

Sure I did...



If that hole your digging gets any deeper you might end up in Australia.

Originally Posted by Butterfly

Originally Posted by The_Ghost_Of_The_Moog

Nope. The rating itself was cut. Not just a negative outlook


Teakdoor clearly isn't the place to find out facts on this scenario !

and neither the BBC apparently, rating agencies issues 3 different ratings and the US debt are not rated by default, they are assumed to be AAA

the story is about some long term "outlook" which again means fuck all,

I thought you would know that,

http://www.standardandpoors.com/serv...ervalue3=UTF-8

Yes and that specific list also includes the likes of AAA ratings for Liechenstein and New Zealand and Guernsey. Even Botswana gets a single A.

The US rating cut overnight is the big one. The important one in their portfolio of ratings types.
.
Not the one on this link, which has nothing like the same significance.

I thought you would have known that.

Originally Posted by The_Ghost_Of_The_Moog

Yes and that specific list also includes the likes of AAA ratings for Liechenstein and New Zealand and Guernsey. Even Botswana gets a single A.

The US rating cut overnight is the big one. The important one in their portfolio of ratings types.
.
Not the one on this link, which has nothing like the same significance.

I thought you would have known that.

again this is the typical confusion of journalists trying to understand ratings, you are not the only one in that regard actually

it's not a credit rating cut, US debt is still "rated" AAA, the cut is about a long term opinion of their credit worthiness, a long term outlook of what they think will happen, it has very little impact and it means fuck all. Did US bonds collapse after the announcement ? of course it didn't,

a real downgrade credit cut is something else, and like I said, there aren't "credit rating" by the rating agency for US debt, as it's assumed to be AAA and are "unofficially" rated AAA. To this day, US debt is still AAA. Just look it up,

I understand the distinction is confusing, but it's there

Originally Posted by Butterfly

Originally Posted by nostromo

Originally Posted by robuzo

The ratings agencies have zero credibility.

These rating agencies are professionally run companies and their product is to evaluate risks to their customers. Not to specific governments.

they are and they do, but the kind of announcement we see these days about government ratings are more about PR and advertising, or to make a story

apparently their influence since the collapse of the subprime and accompanying CDOs tranches has also collapsed among professionals.

Their lack of communicability and their PR stunts are definitely not helping for them to make a credible case

This is the time of headlines, still does not change the facts. USD is USA, EURO is what exactly. Southern loser economies and rich ones in north paying up to southern bastards. For how long. And why in the first place?

Originally Posted by Butterfly

Originally Posted by The_Ghost_Of_The_Moog

Yes and that specific list also includes the likes of AAA ratings for Liechenstein and New Zealand and Guernsey. Even Botswana gets a single A.

The US rating cut overnight is the big one. The important one in their portfolio of ratings types.
.
Not the one on this link, which has nothing like the same significance.

I thought you would have known that.

again this is the typical confusion of journalists trying to understand ratings, you are not the only one in that regard actually

it's not a credit rating cut, US debt is still "rated" AAA, the cut is about a long term opinion of their credit worthiness, a long term outlook of what they think will happen, it has very little impact and it means fuck all. Did US bonds collapse after the announcement ? of course it didn't,

a real downgrade credit cut is something else, and like I said, there aren't "credit rating" by the rating agency for US debt, as it's assumed to be AAA and are "unofficially" rated AAA. To this day, US debt is still AAA. Just look it up,

I understand the distinction is confusing, but it's there

Well now you're just getting flat out patronising! I won't stoop to that level, though it would be easy to do so.

But you have picked the wrong rating from the numerous ratings S&P issues. The sovereign rating that ranks the USA at AAA alongside Guernsey and Austria is not the ratings type which governs the world's financial markets. That one was cut last night.

And you can keep saying the contrary all night long, ......but you're still wrong.


I'd be interested to hear the views of other Teakdoor members now.

in other words, Moog, before you feel I am patronizing you again it's all about the story and how it's being sold

the story is implying that US debt is being "downgraded" while it's not, for the public and some journalists, that's how they understand this week cut from the S&P

the cut is meaningless because it addresses the issue of "credit quality" in the long term. I think most bankers internal research didn't wait for S&P to issue such a negative outlook for them to reach the same conclusion, therefore it's not really a story, but it is in the newswire though since they are playing on the confusion.

Originally Posted by Butterfly

maybe you didn't notice but the DOW hasn't not tanked over this yesterday and the bonds market didn't crash. How odd ?

What time did S&P announce the downgrade?

4 hours after markets shut.

Did you notice?

Originally Posted by The_Ghost_Of_The_Moog

Originally Posted by Butterfly

maybe you didn't notice but the DOW hasn't not tanked over this yesterday and the bonds market didn't crash. How odd ?

What time did S&P announce the downgrade?

4 hours after markets shut.

Did you notice?

the news expectation about it has been rumored already several days before it was official

news story was announced in the afternoon during market hours, about 1:30pm on Friday,

I am sure HK was already closed by then

I think the EURO situation is far more real and more dangerous than the "confusing rating" downgrade by S&P

below is how typical the story is being sold,

note how dramatic they are trying to project reality, in particular, how market was "shaken" etc... etc... and yet market was up and bonds market didn't crash

Even the title is blatantly misleading, US debt wasn't downgraded

S&P Downgrades U.S. Debt for First Time - WSJ.com

Originally Posted by WSJ

A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor's said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.

S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy outlook for America's finances. It downgraded long-term U.S. debt to AA+, a score that ranks below more than a dozen countries, including Liechtenstein, and on par with Belgium and New Zealand. S&P also put the new grade on "negative outlook," meaning the U.S. has little chance of regaining the top rating in the near term.

The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled. Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P's math that delayed an announcement for several hours. S&P officials decided to move ahead, and after 8 p.m. they made their downgrade official.

Originally Posted by Butterfly

Originally Posted by The_Ghost_Of_The_Moog

Originally Posted by Butterfly

maybe you didn't notice but the DOW hasn't not tanked over this yesterday and the bonds market didn't crash. How odd ?

What time did S&P announce the downgrade?

4 hours after markets shut.

Did you notice?

the news expectation about it has been rumored already several days before it was official

news story was announced in the afternoon during market hours, about 1:30pm on Friday,

I am sure HK was already closed by then

And the US market did tank, in those preceding days when rumours were flying around.

As for the announcment of the fact. You say 1.30pm friday. Perhaps you could give me a steer to where you saw that, because I can cite numerous places which say it was after market hours. (I was also watching Bloomberg tv at 1.30 pm US time on friday, and they didn't report it)

Here's one citation, Associated Press. ''The downgrade, hours after markets closed on Friday, is a first for the U.S. since it was granted an AAA rating in 1917. '

Originally Posted by The_Ghost_Of_The_Moog

As for the announcment of the fact. You say 1.30pm friday. Perhaps you could give me a steer to where you saw that, because I can cite numerous places which say it was after market hours. (I was also watching Bloomberg tv at 1.30 pm US time on friday, and they didn't report it)

Here's one citation, Associated Press. ''The downgrade, hours after markets closed on Friday, is a first for the U.S. since it was granted an AAA rating in 1917. '

interesting, it was in the news in France in the afternoon, so not sure how US markets were closed by then

WSJ had the story published online at 1:30pm US ET,

The official press release by S&P was 8:38pm US ET though, but by then everyone had already published their story and market reacted accordingly.

It's also possible that the actual report was online before the actual press release,

Originally Posted by The_Ghost_Of_The_Moog

And the US market did tank, in those preceding days when rumours were flying around.

you probably missed the story about the EURO and the default rumor of Italy ?

Please show me something concrete.

Here's the WSJ blog
Live Blog: Ratings, Jobs and Global Markets Turmoil - MarketBeat - WSJ

People didn't know for sure till after 8pm US time. There were rumours all day in US trading hours about a downgrade coming later that day, with S&P saying 'no comment'. Are you positive that it was not the rumour that was being reported.

I am just trying to help provide an answer to your question about US market reaction and why it didnt plummet. And I say it is because they did not know for sure.

If markets fall monday, then that will help answer it.