Showing posts with label credit rating. Show all posts
Showing posts with label credit rating. Show all posts
Thursday, September 27, 2012
Monday, May 24, 2010
Scary Math - Depressing Housing, Unemployment and Business Stats
SCARY MATH |
| by David Rosenberg - Gluskin Sheff |
1 in every 10 American homeowners missed a mortgage payment in Q1 (a record) 1 in 6 Americans are either unemployed or underemployed. 4 in 10 unemployed Americans have been out of work for at least 6 months. 1 in 4 Americans with a mortgage have negative equity in their homes. 1 in 10 Americans believe their income will rise in the next 6 months. 1 in 5 Americans see business conditions improving in the next 6 months. 1 in 50 Americans plan to buy a home in the next 6 months. 1 in 8 Americans believe that current government policy is actually helping the economy. 1 in 10 American small businesses have a job opening. 1 in 10 American’s credit card usage is being written off (a record). There are 5 unemployed workers competing for every job opening (hence downward pressure on wage growth). Outside of these, it’s all good. Lagged impact of gargantuan fiscal stimulus (the longevity of which is now being challenged with Greece the proverbial canary in the coal mine) and inventory-led production gains (the longevity of which is now being challenged by the fact that real final sales since the recession technically ended is running at a pace that is two-thirds weaker than what is “normal” coming out of a “downturn”). |
Wednesday, December 9, 2009
Moody's: "Potential Downgrade of U.S. Debt Not Inconceivable"
Moody’s suggested that even the United States and the U.K. are not safe from seeing their coveted triple-A credit ratings tarnished down the road.
In a report titled, “AAA Sovereign Monitor,” which Moody’s will now update quarterly, the rating agency said that the U.S. and U.K must show that they can reduce their ballooning deficits in order to avoid threats to their triple-A credit ratings.
In this quarter’s report, both the United States and the United Kingdom were singled out from the rest of the 17 nations that currently enjoy a triple-A rating on their sovereign debt. The report used the term “resilient” when describing the U.S. and U.K. while the word “resistant” was applied to rest of the triple-A club.
The Wall Street Journal reports that under the most pessimistic scenario Moody's devised, the U.S. could possibly lose its coveted triple-A rating in 2013… IF the following scenario were to unfold:
"Economic growth proves anemic, interest rates rise, and the government fails to reduce the deficit and/or recover most of its assistance to the financial sector."
The chief international economist at Moody’s points out that unlike several years ago, “now the question of a potential downgrade of the U.S. is not inconceivable.”
In the U.S., a "credible fiscal consolidation strategy" is said to be required in order to prevent the debt load and associated interest costs from tipping into the ratings agency's most pessimistic scenario, the report said.
Moody’s says that the most likely path for both the U.S. and the U.K. involves modest economic growth and a program of deficit reduction. The report also makes it clear that neither country is at risk of losing their credit rating in the near term.
The report notes that "the trajectory of the debt metrics, while unfavorable in the near term, does not currently threaten the ratings" of countries like the U.S. and the U.K."
In a report titled, “AAA Sovereign Monitor,” which Moody’s will now update quarterly, the rating agency said that the U.S. and U.K must show that they can reduce their ballooning deficits in order to avoid threats to their triple-A credit ratings.
In this quarter’s report, both the United States and the United Kingdom were singled out from the rest of the 17 nations that currently enjoy a triple-A rating on their sovereign debt. The report used the term “resilient” when describing the U.S. and U.K. while the word “resistant” was applied to rest of the triple-A club.
The Wall Street Journal reports that under the most pessimistic scenario Moody's devised, the U.S. could possibly lose its coveted triple-A rating in 2013… IF the following scenario were to unfold:
"Economic growth proves anemic, interest rates rise, and the government fails to reduce the deficit and/or recover most of its assistance to the financial sector."
The chief international economist at Moody’s points out that unlike several years ago, “now the question of a potential downgrade of the U.S. is not inconceivable.”
In the U.S., a "credible fiscal consolidation strategy" is said to be required in order to prevent the debt load and associated interest costs from tipping into the ratings agency's most pessimistic scenario, the report said.
Moody’s says that the most likely path for both the U.S. and the U.K. involves modest economic growth and a program of deficit reduction. The report also makes it clear that neither country is at risk of losing their credit rating in the near term.
The report notes that "the trajectory of the debt metrics, while unfavorable in the near term, does not currently threaten the ratings" of countries like the U.S. and the U.K."
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