Some people just can’t wait for the U.S. to actually default. From Forbes:
Is history about to repeat itself? As the government squabbles over the debt deal and raising the debt ceiling, the U.S. creditworthiness finds itself at risk of a credit downgrade.
Late Tuesday afternoon, Fitch credit rating service announced that it put the U.S. on credit rating watch negative because of government failure to raise the debt ceiling in a “timely” manner. The ratings service affirmed the U.S. credit rating at AAA — a rating that it retained in the face of the debt ceiling debate in 2011 — but the announcement puts the U.S. credit rating at risk for a downgrade….
The last time there was a debate over the debt ceiling, in July of 2011, Standard & Poor’s downgraded the U.S. credit rating for the first time in its history, taking it from a AAA to an AA+ and throwing the markets in turmoil. At that time, Moody’s and Fitch retained a rating of AAA. Earlier in October, Moody’s said that the current debt ceiling debate is less dire than that of 2011 and said that the U.S. creditworthiness would not be at risk this time around. Fitch, however, clearly disagrees….
Following Fitch’s announcement, Dow futures plummeted triple digits. Futures of the S&P and Nasdaq were also in the red.
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I thought this would be a talker. If I’d done a Virtual Front Page yesterday, this would have been my lede…
meh, it’s a non-issue. Regardless what the ratings agency says, the true measure of risk is the borrowing cost (interest rate) required to lend.