Tag Archives: s&p’s

Business/Economics, International, U.S.

What Economic Recovery? S&P’s declares Greece in default of debt! Proof that re-negotiating your debt won’t save you!

February 27, 2012, Standard & Poor’s declares Greece to be in default!  S&P’s blamed it on the debt restructuring deal currently being negotiated.

Greek officials say they were expecting it. Other credit rating agencies are expected to do the same thing.  This makes Greece the first European Union member to default.

S&P’s explained that loan contracts state that loan restructuring is condition for default status: “As we have previously stated, we may view an issuer’s unilateral change of the original terms and conditions of an obligation as a de facto restructuring and thus a default by Standard & Poor’s published definition.”

Business/Economics, Idaho, U.S.

What Economic Recovery? S & P’s downgrades Nevada & New Jersey, Idaho gets upgrade, more to come in November

“In our opinion, the longer-term deficit reduction framework adopted as part of the Budget Control Act of 2011 (BCA) could undermine the already fragile economic recovery and complicate aspects of state and local government fiscal management.”-Gabriel Petek, S&P’s

Standard & Poor’s has already downgraded the credit rating of Nevada, New Jersey and several U.S. counties, for 2011.

Many counties and cities got super downgrades, meaning credit rankings of triple B, or less.  S&P’s says many local governments are in very bad shape fiscally.

Six states were actually upgraded. They are Idaho, Nebraska, Wyoming, Oregon, South Dakota and Louisiana.  But only Wyoming and Nebraska made the triple A rating.

In a statement issued by S&P’s on August 18, they indicate more downgrades for state and local governments are coming.  It’s all based on state budget plans, and what happens with the Federal Debt Limit Deal (Budget Control Act of 2011).

S&P’s will make more credit rating decisions in November.

 

 

Business/Economics, U.S.

S & P’s says Debt Limit Deal not enough, downgrades the United States anyway, U.S. officials cry foul

Standard & Poor’s downgraded the U.S. from a triple A credit rating to double A plus.  They cited three main reasons.

Reason one is that the GDP to debt ratio is too high for triple A.  They estimate the U.S. has a 74-79% debt to GDP ratio.  Some European countries have higher debt ratios, but S & P’s says those countries have implemented plans that give them a better chance at getting their debt under control (why do you think there’s so much rioting going on over there).  S & P’s says there are no signs the U.S. can get its debt undercontrol.

This brings us the the second reason for the downgrade: The Debt Limit Deal won’t bring down the debt.  The Debt Limit Deal aims to cut government spending by $2.1 trillion over ten years.  Standard & Poor’s says that doesn’t even come close.  They claim at least $4 trillion needs to be cut, and they say $4 trillion would be just a “down payment” against U.S. debt.  Obviously the elected officials in Washington DC still don’t realize the seriousness of the situation.

That brings us to the third reason: Government incompetence.  S & P’s says the lack of performance by elected and appointed federal government officials proves they are not taking the issue seriously: “The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned.”-Standard & Poor’s

Of course officials at the U.S. Department of Treasury are crying foul.  They claim there are mistakes in the official S & P’s notice of the credit rating downgrade.  S & P’s says they will review it for any mistakes.

 

 

International, U.S.

S & P’s reacts to Greece needing mo money, get ready for the stock markets to react

Standard & Poor’s cut Greece’s credit rating, downward 2 points, after Greek officials announced they needed more bailout money.

The S & P’s rating now puts Greece below investment grade.  S & P’s also says that Greece will need a waiver on repaying most of its current loans (that means they don’t think Greece can pay).