Friday, March 12, 2010

S&P: warns on U.S. AAA rating.

A familiar refrain. The next credible competitor to the exhalted reserve currency status of the dollar is...the Euro?

S&P warns over America’s top-tier rating
Posted by Stacy-Marie Ishmael on Mar 11 20:16.

The triple A rating of the US is at risk, unless the country adopts a credible medium-term plan to rein in fiscal spending, the FT reported. The warning came from rating agency Standard & Poor’s which said there were risks that “external creditors could reduce their US dollar holdings, especially if they conclude that eurozone members are adopting stronger macroeconomic policies”.

And of course, see the 10yr. Treasury performance after a previous incarnation of this analysis.

From September 17, 2008:

(Reuters) - Pressure is building on the pristine "AAA" rating of the United States after a federal bailout of American International Group Inc, the chairman of Standard & Poor's sovereign ratings committee said on Wednesday.

The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview.

"Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating," Chambers said. "There's no God-given gift of a 'AAA' rating, and the U.S. has to earn it like everyone else."

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