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Moody’s Pressures Hill With Ratings Threat

From the Wall Street Journal’s Market Watch:

Moody’s may downgrade U.S. triple-A rating

By Sue Chang
July 13, 2011

SAN FRANCISCO (MarketWatch) — Moody’s Investors Service said late Wednesday it placed the U.S. government’s triple-A bond rating on review for possible downgrade due to rising risk of default.

"The review of the U.S. government’s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default," Moody’s said.

The rating agency stressed that it considers the probability of a default to be low but no longer minimal. "An actual default, regardless of duration, would fundamentally alter Moody’s assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate," it added.

Moddy’s [sic] said the rating, if lowered, would most likely be somewhere in the Aa range.

The current US debt is larger than the entire economy of China. That should be what Moody’s and everybody else should be alarmed about.

This article was posted by Steve on Thursday, July 14th, 2011. Comments are currently closed.

7 Responses to “Moody’s Pressures Hill With Ratings Threat”

  1. River0 says:

    This will be catastrophic if we allow it. Problem is, though, raising the debt ceiling without cutting spending massively will also be catastrophic. It’s better to have the damage now while Democrat ‘progressives’ are in power and can reap the blame. After all, their policies are causing it. Republicans MUST NOT aid ‘progressives’ in their demolition of America. They MUST INFORM voters of all persuasions exactly how and why we have reached this cliff edge. They haven’t been doing a very good job up till now.

  2. GetBackJack says:

    … and Moody’s is above being corrupted and bought in order for a pre-determined political outcome to succeed.

    Bwa-hahahaha

    http://www.thefiscaltimes.com/Columns/2010/10/01/The-Corruption-of-the-Rating-Agencies.aspx

  3. proreason says:

    Debt service is about $29B per month.

    Federal receipeipts are about $200B per month.

    What’s the problem?

    If my mortgage is $1000 per month, and I spend $2000 per month on booze and dope, should I default on my mortgage if I encounter money problems? Sounds like it, doesn’t it.

    • Right of the People says:

      Pro,

      How many times does Barry and Barney and Nancy and the rest of the Mousekeeteers have to tell you? Do what I say, not what I do.

      After all they learned their economics at the Libtard, Hair Care, Tire Center and Business Skool.

    • tranquil.night says:

      Yep, Moody’s is ignoring the fact that the we’re capable of paying those immediate debts, and that the American people are staging an intervention, in order to help the addict score more cash.

      Doc0:

      There’s no logical reason for debt service to be threatened, because it costs about $29 billion per month, and the federal government collects $200 billion a month in revenue. The government’s financial obligations are in jeopardy only because the President says he will spend all of the money on other things, willfully refusing to pay interest on the debt.

      If America’s credit rating is reduced, the cost of debt service will increase by billions of dollars each year, resulting in even greater insolvency… which will jeopardize our credit rating again. At the far end of this death spiral lie the ruins of Greece, which pays more than double the interest rate America does. That would quickly increase our debt interest payments past a trillion dollars per year. The entire current federal budget would be consumed by interest payments in short order.

      All of this is a feature, not a bug, for the Empire of Debt. The $350 billion per year we pay in interest, to service the titanic national debt our ruling class has accumulated, is being used as a weapon against us, to panic us into quiet submission to higher tax rates.

      Do you dislike giving international credit agencies like Moody’s and S&P such powerful influence over the domestic politics that control over half our economy? Tough. That’s one of the inevitable results of carrying $14 trillion in debt.

  4. Georgfelis says:

    Let me see if I can paraphrase Moody’s.
    “Look you dumb (censored), if you keep yapping about how you are not going to pay the interest on your golden bonds that have been The Solid Investment for the last century or so, we have *no* problem with dropping the rating on them until some people with common sense get elected. And if you even *think* about threatening us, we’ll drop them *two* bond ratings and you’ll find those rich dudes who were so happy to see you in office will be more than happy to help pack your crap into boxes for your trip back to your home district. Now man up, get a freaking hold on your spending habits and get serious. Or else.”

  5. Not so fast says:

    Moody’s is owned by Warren Buffett. Warren Buffet got bailed out of the default credit swaps mess by Obama and the gang. ANYTHING said by Moody’s is suspect, since they are definitely NOT dissinterested bystanders.


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