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  • edited May 2023
    Moody's is just watching for now (this article was before the Fitch's new).
    https://www.reuters.com/markets/us/change-tone-us-debt-talks-could-prompt-rating-action-before-default-moodys-2023-05-24/

    S&P has been quiet - it did the damage already in 2011 by downgrade to AA+.
  • edited May 2023
    Gold “jumped” $3.00 after the announcement - but has been hammered daily for about a week and remains stuck under $2,000. Can’t get out of its own way.

    Couple thoughts on the potential credit downgrades …

    (1) Fitch is citing “governance” issues as the problem. Oh Really?

    (2) In theory the ratings warnings should drive up interest rates on longer term U.S. bonds - adding to interest expenses on debt and thereby exasperating the deficit problem. But never underestimate the ability of politicians to muck things up.
  • It begins...again.
  • big effing surprise. Let's dock the salaries of those in Congress and White House. See how quick this stuff gets done.
  • Marjorie Taylor Greene is worth $56 million, so she probably doesn't ever know what her salary is !
  • carew388 said:

    Marjorie Taylor Greene is worth $56 million, so she probably doesn't ever know what her salary is !

    56 million. That by itself is criminal.
  • Please remind me how much pelosi is worth? And while you're at it, how much is Comrade Sanders worth... thanks... that's what I thought
  • @Baseball_Fan - Please remind us of MTG's claim to fame, or her accomplishments or any little positive thing she's contributed to society. Thanks... that's what I thought
  • Congress is on Memorial Recess now, but may be recalled on short notice. More precious days to the debt-ceiling deadline wasted.
    Meanwhile, very short-term T-Bills yields are acting up, while the dollar is getting stronger. This may be getting complicated and messier.
    https://stockcharts.com/h-sc/ui?s=UUP&p=D&b=5&g=0&id=p78212751137
  • Congress is on Memorial Recess now, but may be recalled on short notice. More precious days to the debt-ceiling deadline wasted.
    Meanwhile, very short-term T-Bills yields are acting up, while the dollar is getting stronger. This may be getting complicated and messier.
    https://stockcharts.com/h-sc/ui?s=UUP&p=D&b=5&g=0&id=p78212751137

    Nothing ... NOTHING will ever get in the way of scheduled Congressional vacations away from DC -- er, "district work periods."
  • Please remind me how much pelosi is worth? And while you're at it, how much is Comrade Sanders worth... thanks... that's
    what I thought

    Pelosis did not push us to the brink of default, during the Trump Administration, maybe because she was one of those wealthy persons getting tax breaks for the wealthy, that was a major contributor to our increase in the national debt.
  • Pelosi and Sanders also support the ACA, Social Security and Medicare-programs that MTG would vote to repeal if given the chance !
  • What will be the rating if we do default?
  • What will be the rating if we do default?

    image

  • S&P/SPGI scale is AAA, AA+,... etc; within AA, there are AA+, AA, AA-. It downgraded the US from AAA to AA+ in 2011. Moreover, ALL US financials were also downgraded then with the logic that no US financial can have better rating than the US. So, only 2 US companies with AAA ratings are JNJ and MSFT.

    Fitch scale is AAA, AA+, etc and it's is similar to S&P. The US is AAA and It put the US debt on negative watch.

    Moody's/MCO scale is Aaa, Aa1, etc; within Aa, there are Aa1, Aa2, Aa3. The US is Aaa. Note that Warren Buffett/BRK owns a big chunk of Moody's (13.44%).

    https://www.moneyland.ch/en/rating-agencies
    https://en.wikipedia.org/wiki/Bond_credit_rating
  • There are rumors on Twitter that Fitch may go ahead with the US downgrade, deal or no-deal.

    S&P did that AFTER the resolution of debt-crisis in 2011 & suffered mightily for it - McGraw Hill is now pvt shadow of the former self after spinning off $SPGI.

    Pvt Fitch (owned by pvt Hearst) won't be spared if it repeats the history by downgrading the US AFTER the debt-deal.
  • Are these rumors reliable? The other question, can we compare 2023 vs. 2011?
  • @Sven, it was a Bloomberg story (behind paywall) citing TD Bank. I couldn't find any other sources for it, so called it a "rumor".
  • Speaking as a professor, if medical school faculty had such a laughable 'grading' scale like the credit agencies have to keep issuers from receiving failing grades, they'd be a mortician's delight.
  • I recall 2011’s downgrade, not even defaulting, brought down the market. This time won’t be easy to get both sides to come together.

    Last time, gold shot up and stay there until the debt ceiling resolved.
  • @yogibearbull,

    Gold has been falling to below $2,000 an ounce.

    Is there still a risk of downgrading US Treasury by Fitch ?
  • Only Fitch knows. But it would be a foolish thing to do now.

    See https://community.morningstar.com/s/question/0D53o00006bukgrCAA/us-credit-rating-to-stay-on-fitchs-negative-watch-despite-debt-limit-deal

    yogibearbull (Customer)
    2 days ago

    Well, I can see the headline - Fitch, a unit of the publisher of magazines such as Cosmopolitan and Seventeen, downgrades the US debt after the fact.

    It should keep in mind how harshly McGraw-Hill was treated when it also downgraded the US after the fact in 2011. Don't bother looking for its ticker as it is now a small co called McGraw Hill Education. Its old rating unit does trade as SPGI.

    I agree that Fitch is now looking for some publicity.
  • Agree. As of last Friday, Fitch is still saying downgrade is still possible even after the debt limit deal.
    https://cnn.com/2023/06/02/economy/fitch-credit-downgrade-warning/index.html
  • move to the safety of AI related companies.
  • edited June 2023
    More like AS: Artificial Stupidity
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