The Dow is currently down well over 200 points on the news that rating agency S+P revised its long term outlook on the US from stable to negative. The AAA rating remains in effect.
Here is the scoop: http://www.cnbc.com/id/42643662
What do you monkeys think? Is it warranted? Will the US lose its AAA rating in the coming years? Sound off!
| +418 | Evercore Intern Seizure | 63 | 7h |
| +128 | UBS IB Americas has failed, now behind Santander and Stiffel | 34 | 12h |
| +108 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 37 | 46m |
| +79 | deleted deleted deleted deleted deleted | 44 | 16h |
| +65 | How do I understand vs. just memorizing? | 11 | 1d |
| +58 | Some banks are overrated as fuck | 19 | 42s |
| +48 | Associate & Above IB exits | 18 | 1d |
| +47 | The good and bad with Wells Fargo | 18 | 1h |
| +42 | Tech to IB Pivot | 22 | 6h |
| +36 | Incoming IB Analyst: Best Ways to Prepare? | 13 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
eh, it's all semantics. the fiscal situation has been on a negative trend for quite awhile now.
$14.3trillion debt versus $14.7t GDP, with no concrete plan to cut back spending and entitlements?
Since 2009 I would say that the US was not a AAA country, it's really just a matter of whether any ratings agencies has the balls to actually come out and downgrade the US, for the consequences it would havoc.
The only reason they can justify the AAA is because of default risk, i.e. in theory it is zero because the government can just print more money. Guess the retards have never heard of inflation...
The clowns that rated CDOs positice are now going to issue a negative review on the USA? I'm not so sure their credibility is up to par.
do people seriously believe their own rhetoric, or do they think ANYONE is that stupid?
Their credibility being questionable is due to the fact that they continue to maintain the US's AAA rating. These are the same morons who rated leveraged CDOs AAA back in 06-07. The agencies are known to be extremely reactive in nature and not pre-emptive in issuing their ratings.
Just look at how late they are in downgrading half of Europe.
I can tell you for a fact that outside of client's demands in their portfolios for abiding by rating agencies' ratings, they are essentially worthless to investment professionals who have half a brain.
I can agree that they are worthless to investment professionals. However, they move markets nonetheless. The market was spooked by the downgrade. We can only hope this has some clout in the political arena to make the necessary cuts.
Yes they move markets and therefore you want to be ahead of the herd who are reactionary to the ratings agencies' actions.
ex. buying CCC rated high yield debt b/c analysis shows limited downside, improving fundamentals ahead of a ratings agency upgrade
or on the other side selling AAA rated securities that certainly aren't worth the "low default/credit risk" they claim to be
These agencies really do move extremely slowly and so it is not difficult to jump ahead of their actions as they only like to make ratings changes when things are almost painfully obvious at times...
Opinions?
And then there is this little gem:
http://www.zerohedge.com/article/total-us-debt-now-officially-above-cei…
[quote=The.RealDeal]Opinions?
And then there is this little gem:
http://www.zerohedge.com/article/total-us-debt-now-officially-above-cei…] THIS is freaking cool. I'm going to watch this 20 times and let it sink in. My gut reaction says that the FED is subjecting itself to markey discipline, even if in a controlled manner.
I'm a huge believer in the US, and honestly, everyone knows the debt is too high so I think it's just a matter of time before they reign it in. Whoever does THAT will go down in history as the next Reagan / FDR / Washington type. Perhaps the next GOP president can run on that platform?
I try not to pay S&P any attention.
I see it very simply.
The only way we've been able to continue funding these deficits and raising the debt limit is b/c we continue to have buyers for our treasuries....
And since China and Japan are scaling back their purchases of treasuries... the number 1 buyer of them is.... our own Federal Reserve?
Derivatives and their underlying certain correlate with one another (though with the release of this such continued correlation has to be seen...) and so I'm not surprised that the Fed is selling puts on the long end of the curve to finance themselves... in fact... I wouldn't be surprised if they were selling protection on US CDS as well
I really cannot see how the US plans on getting itself out of this mess aside from basically printing US dollars...
I thought that those agencies had lost all credibility with people after 2008. They'll likely keep the U.S. at AAA for the rest of this year tho.
I think what really brought this on is Washington's budget battle shitshow. When everybody saw how congress behaved back then the markets just knew that the US and the Fed were in deep shit, precipitating the initial (and ignored) questions of credibility (IMF, etc) and then finally this.
I'm you BSB, hopefully this will wake up the tards sitting in congress so that someone can actually step up and do the right thing here.
Congress do the right thing? Did you just say that? This is the perfect opportunity to do so but I somehow think they'll manage to blow it.
Est at ut corporis omnis ipsum quis hic. Qui veniam qui error fuga accusantium. Reiciendis aut voluptatem consequatur repellat corporis vel qui.
In eius occaecati similique nihil ad corrupti. Iusto quo dolor praesentium aut a. Earum quidem sunt similique tempore ad ea atque. Et sed ea velit dolorum. Sunt consectetur quaerat ratione perspiciatis nam. Velit sed sequi placeat sit ab mollitia sunt. Qui sit hic necessitatibus neque praesentium.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...