U.S., U.K. Move Closer to Losing Rating, Moody’s Says

[The Northerner]

Source: Bloomberg

March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”

Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=a0a8xAghPS8I

[Downwinder]

1. Welcome to the Third World. n/t

[dballance]

2. Too bad they didn't do that with the crap mortgages banks were selling

I find it unlikely the US will declare bankruptcy. If S&P and Moody's had done their job with respect to the crap Lehman's and AIG were selling we wouldn't be in the mess we are now. So why is anyone listening to them?

[howaboutme]

7. They are posturing

These ratings agencies know they ripped off the world because they had conflicts of interest and were paid off to give good credit ratings. Now they (ratings agencies) are posturing in a defensive attempt to thwart actions against them by threatening the USA and UK government by throwing out the potential of a sovereign downgrade.

[yava]

8. "howaboutme" I think like you: (off subject a bit)

I see the Obama admin raising political pressure on a country that has a lot of support in Congress only to sell back its position for the passing of a pending legislature.
What do you think?

[howaboutme]

9. Interesting

Interesting. I think I understand the situation that you refer. But I'm not sure of which legislation they would be using as a bargaining chip. I'm now firmly in the camp of many Americans who have become disenfranchised and disgusted with a Congress that has worked against the interests of Americans, with their wars, their diminishment of the Bill of Rights and middle class, and expansion of one way incoming "anything but free" trade. At the root of it all are the financial sector and lobbyists, both corporate and country.

[BumRushDaShow]

3. This the same Moody's that completely lost all credibility rating junk as AAA

http://www.bloomberg.com/apps/news?pid=20601109&refer=exclusive&sid=aH0mn2YEj6nk

[JackRiddler]

4. Can't say it often enough: Moody's should have been shut down as a criminal organization...

just like Arthur Andersen, except that their auditing fraud was of several orders of magnitude greater.

Moody's and S&P were the most important participants at the center of the millennial banking fraud with housing securities and derivatives. Without AAA ratings on junk MBS, investors would not have fallen for the bankster scams.

When these criminal organizations are not prosecuted but survive, untouched, to prosper further and to continue their war on the public sector by downgrading government bonds, that is an act of suicide by governments.

[naaman fletcher]

6. yep. nt.

[Bozita]

5. But, but, ... but, ummm this time we ummm really, REALLY mean it!!!