Comments on: Supporting less prosperous brethren

By: Cate_Long

Cate_Long — Tue, 09 Aug 2011 11:24:59 +0000

“Top-rated state and local governments wouldn’t automatically lose their top scores, the company said. It rates the general-obligation debt of nine states AAA. The country’s “decentralized governmental structure” calls for an independent review of state and local government credits, 3.9 percent of which have AAA ratings, S&P said in a report.

State and municipal governments that depend less on the national government for revenue and that manage their own books well enough to weather declines in federal funding may retain AAA ratings, S&P said. The company didn’t name such states or municipal governments in the report.”

http://www.zerohedge.com/news/sp-cuts-aa a-rating-thousands-municipal-bonds

By: Cate_Long

Cate_Long — Mon, 01 Aug 2011 11:31:54 +0000

Oakland County government will not lose its AAA credit rating, even if the nation’s credit rating is downgraded.

http://www.dailytribune.com/articles/201 1/07/30/news/doc4e348d548bc1d046498702.t xt

By: Cate_Long

Cate_Long — Sat, 30 Jul 2011 11:28:37 +0000

Hehehe…

I think it’s actually the guy who invented the steam powered boat…

http://en.wikipedia.org/wiki/John_Fitch_ (inventor)

By: FelixSalmon

FelixSalmon — Sat, 30 Jul 2011 07:58:18 +0000

Fitch. Isn’t that some kind of small avian creature?

By: Cate_Long

Cate_Long — Sat, 30 Jul 2011 02:34:41 +0000

Hmmm… thanks for the comment Felix.

How would you bail out a state w/o it declaring bankruptcy? Congress would have to legislate payments to a specific state. I really don’t think that is politically feasible and you have the moral hazard problem.

“But states (or cities, for that matter) being rated higher than the sovereign? No. Ain’t gonna happen. Ever.”

Hmmm… Hong Kong is rated Aa1 by Fitch and it’s sovereign, the Government of China, is rated Aa3. Did you say that would never happen?

By: FelixSalmon

FelixSalmon — Fri, 29 Jul 2011 23:47:40 +0000

Allowing states to declare bankruptcy is idiotic, as I’ve said many times. Which is one good reason why the bill allowing them to do so went nowhere. But if they can’t file for bankruptcy, we’re gonna hafta bail ‘em out, no?

As for cities being rated higher than states, sure. But states (or cities, for that matter) being rated higher than the sovereign? No. Ain’t gonna happen. Ever.