Moody's Says Time Shortens for U.S. Rating Outlook as S&P Downgrades Japan

[steve2470]

http://www.bloomberg.com/news/2011-01-28/moody-s-says-time-shortens-for-u-s-rating-outlook-as-s-p-downgrades-japan.html

Moody’s Investors Service said it may need to place a “negative” outlook on the Aaa rating of U.S. debt sooner than anticipated as the country’s budget deficit widens.

The extension of tax cuts enacted under President George W. Bush, the chance that Congress won’t reduce spending and the outcome of the November elections have increased Moody’s uncertainty over the willingness and ability of the U.S. to reduce its debt, the credit-ratings company said yesterday.

“Although no rating action is contemplated at this time, the time frame for possible future actions appears to be shortening, and the probability of assigning a negative outlook in the coming two years is rising,” wrote Steven Hess, a senior credit officer in New York and the author of the report. The rating remains “stable,” according to the report.

The warning from Moody’s came on the same day that Standard & Poor’s lowered Japan to AA- from AA, signaling that the ratings firms are stepping up pressure on the governments of the world’s biggest economies to curb their spending. The threat of a lower rating may cause international investors to avoid U.S. assets. About 50 percent of the almost $9 trillion of U.S. marketable debt is owned by investors outside the nation, according to the Treasury Department in Washington.

[rfranklin]

1. Are these the same guys that rated those mortgage CDOs as triple A?

This is a political move to force austerity on us proles.

[Rex]

2. Buy now it appears to all be hocusy pocusy mumbeldy goo.

So what happens when all the first rate, industrialized nations get downgraded to F-- (because we don't do thrift, we just spend and spend and spend)? Except for Germany and China, who else will be untouched by the global market, invisible handjob?