Monday, April 18, 2011
Negative U.S. Credit Rating outlook
S&P warns about lowering the AAA rating of the United States. See S&P Cuts U.S. Ratings Outlook to Negative. This is extremely drastic as most students in American finance and business are taught that the US treasuries are essentially risk-free. One thing that article does not mention is that last week a Congressional report came out that blamed the credit agencies S&P and Moody's for initiating the financial crisis of 2007-2010 when they started to correct the outlandishly high ratings that they had given to asset-backed securities.
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I'd like to downgrade these credit rating agencies! Yes they played a vital role in the process that created the housing bubble. They *knew* the asset-backed securities such as certain derivatives were bogus, yet gave them a AAA rating anyways! And none of them were held accountable afterwards which is truly despicable. In my view they are just as bad as Enron. Why did Ken Lay go to jail and they didn't?! Fitch, Moody's and S&P are now warning US must address long term debt or they may lose AAA rating, they will be reviewing our rating this month and issue a statement at the end of August.
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