S&P just downgraded the UK

[workinclasszero]

Source: Business Insider

Akin Oyedele

S&P Global Ratings on Monday downgraded the United Kingdom's credit rating to "AA" from "AAA", with a "negative" outlook on the country.

The downgrade from the highest rating awarded by the agency comes following the UK's surprising vote to leave the European Union last week.


A store closing sale banner stating "Everything Must Go" on a window next to the colors of the Union flag in the City of London, Friday, June 24, 2016. Matt Dunham/AP

Read more: http://www.businessinsider.com/sp-downgrades-uk-credit-rating-to-aa-from-aaa-2016-6?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29

[Demonaut]

1. it's a "Union Jack" flag....like calling the "Stars and Stripes" just Stripes

where are the good journalists?

[ChairmanAgnostic]

4. Hi-Jacked?

Wait, Sarah Palin is a journalist!

[RAFisher]

10. It's officially called the Union Flag. Both names are acceptable.

http://www.flaginstitute.org/wp/british-flags/union-flag-bill-2008/

[Demonaut]

17. I stand corrected, thanks!

[AllTooEasy]

20. It's appropriate. After Brexit's fallout, no one in the UK can afford jack.

Thanks England and Wales.

[Nihil]

28. Wrong. It is the "Union Jack" OR the "Union Flag", NOT the "Union Jack Flag".

Nothing quite like hijacking the thread with something that is completely wrong ...

[Demonaut]

29. thanks for falling for my diabolical ruse

ha ha

[Recursion]

30. Strictly it's only a "jack" on a ship, boat, or Naval installation, IIRC (nt)

[bluestateguy]

2. Sometimes you have to ignore the will of the people to do what is right for the country

This is one of those times.

Ignore the referendum and refuse to invoke Article 50.

Some politicians are going to have to be willing to sacrifice their careers, as well.

[workinclasszero]

3. The EU is demanding the UK invoke Art. 50

Before any talks are held from what I've been reading.

I think its pathetic the way the exit leaders started backing away from their promises immediately after they won the vote.

And there seems to be no plans in place at all to deal with the win.

[lapucelle]

27. Here's the lesson for those who believe grandiose promises from dodgy self-interested politicians:

Read the fine print, stupid.
And never believe promises that you read on the side of a bus.

[iandhr]

7. Sir Humphrey Appleby would call that move courageous.

[msongs]

5. the international banking cartel begins its hatchet job on the brits nt

[bhikkhu]

14. The UK has greatly benefited from the EU system

http://www.theguardian.com/politics/2016/jun/25/city-of-london-could-be-cut-off-from-europe-says-ecb-official

...and just voted to not have those benefits that made them an international banking center. I don't think we can blame the rest of the world.

[LanternWaste]

15. As it falls victim to yours.

As it falls victim to yours (each premise being as absurd as the other).

[TygrBright]

6. That's gonna sting. But they can always borrow from Trump at 29%. n/t

[DonCoquixote]

8. On the one hand

S and P had it's hands deep in the gore of the derivatives scandal, blatantly using it's negative ratings in a way to help out friends of their like Mitt Romney call for the same "austerity" that wrecked the EU.

On the other hand, it is nice to see Capitalism sell itself the rope they will be hanged with.

[workinclasszero]

9. "On the other hand, it is nice to see Capitalism sell itself the rope they will be hanged with."

Unregulated capitalism always leads to destruction.

[still_one]

11. That is the key point, thanks

[Igel]

13. This is true.

However, the assumption when it was formulated in its canonical version is that it would be constrained. That's different from "regulated."

Where too many individuals fail in their moral and ethical conduct, government then takes over for everybody. Laws aren't written for the good, and capitalism requires social and ethical strictures to work and a lot of buy-in by individuals to make it work. The economy functions as a kind of commons. The population overall can maintain it in an open state, or everybody can line up for permission and face a lot of rules.

It's like "pure" communism in that regard. Or, for that matter, socialism, where a lot of power is invested in society's keepers, who must stay above reproach and work for the common good. Corruption in the three systems tends to look a bit different, but it's the same thing.

[daleo]

23. Nicely put

[AllTooEasy]

21. Well, England and Wales voted to dump the EU's extra regulations

Can't say they didn't ask for this outcome.

[forest444]

12. Given the UK's $150 billion annual balance of payments deficit,

S&P probably saw the recent outcome more like a case of the drop that spilled the cup than anything (the cup of Earl Grey, of course).

[yallerdawg]

16. Rightwingers got the US a lower AA rating.

Credit ratings agencies gave mortgage derivatives AAA ratings right up to the Great Recession.

I'd say long before the US and UK lost their ratings, the credit agencies lost their credibility!

[diligent sleeper]

18. Revenge

For daring to leave the EU.

I remember, but not specifically the agency, when Brazil was "downgraded" because they voted in Lula.

https://therulingclassobserver.wordpress.com/2016/06/25/of-labels-the-doors-of-perception/

[muriel_volestrangler]

19. Fitch downgrades them too:

Fitch Ratings lowered the U.K.’s credit rating to AA from AA+ on Monday, the second ratings agency to downgrade the sovereign following the country’s decision to leave the European Union. “Uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment,” said Fitch in a statement. It also revised down its outlook on the U.K.’s economic growth to 1.6% from 1.9% in 2016. The outlook on the rating is negative.

http://stream.marketwatch.com/story/markets/SS-4-4/SS-4-112157/

[progree]

22. Eeeu. U.S. Treasury 10-year yield dropped 15.6% since Brexit, from 1.73% to 1.46%

Last edited Mon Jun 27, 2016, 08:59 PM - Edit history (1)

[font face = courier new]
1.46 - 1.73
------------ X 100% = -15.6%
` ` 1.73 [/font]

Link to graph: 10 year note - last 5 days

Notice the sudden steep plunge Thursday afternoon U.S. time, when the Brexit vote results were becoming apparent.

If above link doesn't work, try copying and pasting the below into your browser's address bar (all of it, not just what got blue underlined):

http://finance.yahoo.com/echarts?s=%5ETNX+Interactive#{"range":"5d","allowChartStacking":true}

(Of course, that means the market value of the Treasury 10 year note rose by about the same amount -- no doubt as a result of a flight to safety.)

And I have a 4 year CD, $14,000, renewing in a week. Sigh. I bet the renewal rate will be pathetic. Again.

[hr]

http://www.marketwatch.com/story/uk-government-bond-yields-hit-record-lows-fall-below-1-2016-06-27
U.S. Treasury prices soared and yields plunged to four-year lows as investors continued to seek haven assets in the wake of Britain’s vote to leave the European Union last week.

The benchmark 10-year Treasury yield hit an intraday low at 1.45% after the S&P 500 downgraded U.K.’s credit rating to AA, from AAA, saying the event “will lead to a less-predictable, stable, and effective policy framework in the U.K.”

The selloff in equities follows Friday’s rout, when global equity markets lost more than $2 trillion in value after the U.K. voted in favor of ending its membership in the European Union

“There will be a knock-on effect on other (European countries) and this time there are no circuit breakers—rates are already at or below zero and no political will for fiscal stimulus. This kind of uncertainty is driving a risk-off mode,” Tipp said.

The yield on the 2-year Treasury TMUBMUSD02Y, -0.65% lost 4.7 basis points 0.605%, its lowest level since October 2015.

Meanwhile, the 30-year yield TMUBMUSD30Y, -0.06% known as the long bond, fell 14.7 basis points 2.279% from 2.426%, according to FactSet.

[daleo]

24. Where was S&P before the 2008 crisis?

Funny how they suddenly have credibility, now.

[progree]

25. Very busy schmoozing with their clients who pay them to rate their junk, er, securities (nt)

[lapucelle]

26. Yes, but here's the really important question....

Are people more or less likely to play golf in Scotland?

Let's get our priorities straight.