Obama not concerned about U.S. credit rating change

[snowdays]

Source: Reuters





Obama not concerned about U.S. credit rating change
Fri May 22, 2009 12:42pm EDT




WASHINGTON (Reuters) - President Barack Obama is not concerned about a possible change in the United States' triple-A credit rating, the White House said on Friday.

The dollar dropped to its lowest level this year on Friday and was on track for its biggest weekly fall in two months on concerns about the United States' AAA-rating status.

Moody's Investor Service on Thursday said it was comfortable with its triple-A sovereign rating on the United States, but the rating was not guaranteed forever.

(Reporting by Ross Colvin; Editing by Eric Walsh)

Read more: http://www.reuters.com/article/politicsNews/idUSTRE54L4UC20090522

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Is this calming the waters?

[Fearless]

1. The rating is BS to begin with. It's half the reason we're in this mess in the first place.

[denem]

2. Lets see, Moody's gave out all those A's to zombie/bankrupt financial institutions

that we had to bail out. They have the best intelligence money can buy. Why any nation should be held hostage to these jokers is beyond me.

[amandabeech]

3. I hope that this is calming the waters.

The credit rating agencies are probably trying to clean up their acts right now.

Otherwise, they probably would not have downgraded U.K. paper/gilt. It is a huge step.

If the same were to happen to us, interest rates would go up considerably following treasuries. I can't imagine that a downgrade would not result in a huge jump in the discount on those.

Back in the '70s after wage and price controls were lifted by Nixon (I think--maybe Ford) and two shocks interest rates sky-rocketed to over 15% on mortgages and commercial loans were not far behind. Everthing went up constantly and the economy was in the toilet from '74 to '83 or so.

I don't recall anything about a ratings downgrade on sovereign debt (which was MUCH smaller in comparison to GDP back then), but the effect was what I would expect if a downgrade were to happen now.

The whole thing was called stagflation. It was miserable and not to be repeated.

[tomm2thumbs]

4. these ratings are all insider activities - these folks all know each other on some level

that is why we are where we are - they were giving great ratings to credit default swaps that had no value - the rating process is neanderthal.