Comments on: How special is the US triple-A? http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Anubis http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/comment-page-1/#comment-1180 Mon, 04 May 2009 13:12:29 +0000 http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/#comment-1180 Triple A rating is meaningless if inflation wipes out earnings. Eventually investors will move away. Risk taking is the only way to increase wealth when investing. Now to the real matter.

The character of those in the industry is of the greatest importance. Trust is not an assurance of prosperity. Rather it is the confidence in knowing you are receiving all the information available and that it is correct. This level of transparency simply is not present.

Corruption prevails all way to the highest levels of most business’. I would submit the same is true for governments. The more we look for technical solutions to our problems, the more we look past the fundamental issue. Consumers should seek out those who act in good faith and have the reputation to back it up. Otherwise don’t consume. I suspect this very principal is in no small measure contributing to our economic catastrophe. Unfortunately this does nothing to alleviate suffering and hardship that this calamity has brought upon millions.

I find no end to my distress over the moral decay so many in this nation suffer from.

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By: David Levner http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/comment-page-1/#comment-1168 Mon, 04 May 2009 05:49:54 +0000 http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/#comment-1168 I agree with KenG that the ratings agencies cannot be trusted. Instead, I think we should be looking at the cost of credit default swaps (CDSs). My understanding is that the cost of U.S. government CDSs has risen considerably over the last year.

I have two questions:

1) Is there a free place on the web to look up CDS prices?

2) Does the U.S. government actually pay Moody’s, S&P and Fitch for its AAA rating?

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By: Lafayette http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/comment-page-1/#comment-1141 Sun, 03 May 2009 05:05:06 +0000 http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/#comment-1141 FS: “Even for the one country in the world capable of printing as many dollars as it needs.”

There above lies the fallacy in your reasoning.

If the Central Bank of a nation has the authority to print as much money as it wants, then the Treasury will not default in payment of the interest on its bonds.

What can change is the bond’s yield, since its resale price will not be the same as it purchase price if default is a menace. Even then, however, it is not sure that the yield will suffer greatly.

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By: Thomas Pindelski http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/comment-page-1/#comment-779 Fri, 24 Apr 2009 03:06:35 +0000 http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/#comment-779 Felix – on a tangential topic, I would be interested to see you address the issue of CA munis. I live in CA so this is self interest, hoping for enlightenment.

Given that CA now has the lowest credit rating of all the states, does that make the high rates CA is offering in recent auctions something to avoid, owing to the risk of default, or something to cherish on the lines of ‘too big to fail’.

To make it less CA-centric, the question applies broadly to bonds in general.

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By: KenG http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/comment-page-1/#comment-774 Thu, 23 Apr 2009 22:30:42 +0000 http://blogs.reuters.com/felix-salmon/2009/04/23/how-special-is-the-us-triple-a/#comment-774 Given the ratings companies’ huge failures in the past few years, why does anybody still attach any credence to them now?

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