Posts filed under “Analysts”

US Downgrade vs. Other Weak AAA Credits

Here is Brown Brothers Harriman on the S&P downgrade:

“With the US downgrade now out of the way, we think market attention will swing back to other DM countries that are facing downward pressure on ratings too. Here is a summary of our most recent ratings outlooks for DM.

Our model has the US as a weak AAA/Aaa/AAA credit, and we did not think that the downgrade was entirely justified on fundamental grounds. Our model gives the US score a small boost due to the dollar’s standing as the world’s reserve currency. Taking that out drops the US down to AA+/Aa1/AA+, but at this juncture, we see no end to the dollar’s premiere status. However, now that the move has been made, it brings into question other AAA ratings.

Lastly, we note that the supply of true AAA credits is dwindling. In Europe, there is still Germany, but we believe that as it takes on more and more countries to backstop, Germany’s debt ratios and fundamentals will deteriorate too. Now, it is a solid AAA credit, but the future is not so bright. The dollar bloc, the Scandinavian countries, and Switzerland are left as very solid AAA countries, along with the Netherlands and Luxembourg. But taken together, these countries are a very small slice of global GDP and so investors have few options with regards to AAA safe havens.”

The table below shows current AAA countries:


Source: Bloomberg, Brown Brothers Harriman

Category: Analysts, Bailouts, Really, really bad calls

Economists Cast Opinions During Fishing Trip

> 20110808_me_10 > Source: Economists Cast Opinions On S&P During Fishing Trip Chris Arnold NPR, August 8, 2011

Category: Analysts, Economy, Markets, Media, Travel

Downgrading USA: S&P Bites the Hand That Feeds It

Dan Alpert is a founding Managing Partner of Westwood Capital. He has more than 30 years of international merchant banking and investment banking experience, including a wide variety of work-out and bankruptcy related restructuring experience. Dan’s experience in providing financial advisory services and structured finance execution has extended Westwood’s reach beyond the U.S. domestic corporate…Read More

Category: Analysts, Bailouts, Politics

S&P Downgrade of US Creditworthiness: Some Initial Thoughts

S&P Downgrade of US Creditworthiness: Some Initial Thoughts August 7, 2011 Don Rissmiller, Strategas – Weekly Economics Summary 7 August 2011 ~~~ S&P’s logic: “On Aug. 5, 2011, Standard & Poor’s Ratings Services lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. The outlook on the long-term rating…Read More

Category: Analysts, Credit, Think Tank

Brodsky on S&P Downgrade

Paul Brodsky & Lee Quaintance run QB Partners, a private macro-oriented investment fund based in New York. ~~~ Takeaway: We believe the downgrade of US Treasury obligations is legitimate and, in one very relevant way, insufficient. First, the nominal creditworthiness of Treasury obligations is solely a function of controlling the printing press. Congress ultimately retains…Read More

Category: Analysts, Credit

10 Questions About S&P Downgrade

The downgrade from TripleAAA to AA+ by Standard & Poors raises many questions. Here is my list of most important issues the downgrade raises: 1. The change in trajectory of US debt was in service of Banks: It began with TARP, and continued with every other bailout/stimulus/economic plan. What was S&P’s role in creating that…Read More

Category: Analysts, Bailouts, Credit

S&P Downgrades US to AA+

Here is the great irony: S&P (and the rest of the ratings agencies)  helped contribute in no small way to the overall economic crisis. The toadies rated junk securitized mortgage backed paper AAA because they were paid to do so by banks. They are utterly corrupt, and should have received the corporate death penalty (ala…Read More

Category: Analysts, Bailouts, Credit

Bob Farrell’s Rule #9 in Action

I think it’s likely that I introduced Bob Farrell’s Market Rules to Remember to the blogosphere (albeit to a smaller audience), as they’d been an integral part of my upbringing in the business and I was eager to share them when I started blogging.  (BR posted them here in August 2008.) That said, let’s have…Read More

Category: Analysts, Data Analysis, Economy, Really, really bad calls, Research

Colbert Report: America’s Credit Grating

America should handle credit ratings agencies the way it does all terrorists: by marching the marines into their offices and whisking them off to Gitmo.

The Colbert Report Mon – Thurs 11:30pm / 10:30c
America’s Credit Grating
Colbert Report Full Episodes Political Humor & Satire Blog Video Archive

Hat tip Mike R

Category: Analysts, Credit, Humor, Video

“Moody’s Places AAA Ratings Of 177 U.S. Public Finance Issuers On Review For Possible Downgrade Due To Review Of U.S. Government’s AAA Rating” Moody’s announced today: Moody’s Investors Service has placed under review for possible downgrade the Aaa ratings of 177 public finance credits, affecting a combined $69 billion of outstanding debt. The credits include…Read More

Category: Analysts, Credit, Think Tank