Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Haim R. Branisteanu who wrote (73723)	5/28/2010 2:08:32 PM
From: Haim R. Branisteanu	Read Replies (1) of 74559

How the US rating agencies are deflecting attention from the real problems. Today legislation the House passed the "Jobs Bill" preview.bloomberg.com This bill will add another $54 to $135 billion in budget deficits on top of the already outlandish 1.6 trillion in US budget deficit. US GDP is around $13.4 to $14 trillion therefore the budget deficit is around 11.4 to 11.9% of GDP. The rating agencies have a AAA rating on US debt. (nice!! and why???) Also today and a month ago S&P and Fitch lowered the rating of Spain from AAA to AA and AA+ respectively their budget deficit in relation to their GDP is 11.2% preview.bloomberg.com Spain national debt position is BETTER than that of the US - it may achieve similar debt levels to GDP in the future. Now can any one explain WHY Spain has a AA debt rating and the US still a AAA? rated by US based rating agencies? My answer is simple - and is posted in my previous post The unjust difference in rating will result in the fact that US debt will be preferred over Spain debt by US pension funds and insurance companies etc., and also by the gullible financial institution around the world that all they care about is the rating. The stock market was more or less on a recovery note only to thank after the announcement now down 156 DJ points as I write this - we are obvious in a financial war instigated by BO and his team /administration

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