I don’t think many serious investors care that S&P downgraded US debt. Bond yields are down (more on this in my next post), which means prices are up. US stocks are down, but that’s more about concerns about US and global economic prospects than the credit of the US government. Nevertheless, S&P did downgrade. Why?…
Moneyweb article on US downgrade: The ratings downgrade should have come as no surprise. The markets have been predicting a downgrade for the past fortnight. Yes, we’ve all been talking about it, but the DECLINE in US bond yields over the last fortnight is the compete OPPOSITE of “the markets predicting a downgrade”. I’d love…
So far so good. The 10 year government bond yield has decreased even further in the face of S&P’s downgrade. Only 5 months 29 days to go, but so far I’m feeling confident.
The US probably won’t go into recession again in the next two years. And by that I mean it’s more likely that they won’t than that they will. Â Larry Summers and Goldman Sachs both now estimate a one-in-three chance of a double-dip recession. But as I mentioned before, the definition of “recession” isn’t as important…
It’s easy to get yourself into a corner if you make decisions without a sound basis. More than that, it’s really hard to change your mind if there was never a basis for the decision in the first base. Or if you don’t want to be honest about what the basis is. What am I…
The Consumer Protection Act (CPA) protects consumers from abuse by enforcing fair practices, improved disclosure and added minimum warranties etc, It’s a good piece of legislation, even if at times some aspects of it may result in greater costs than benefits. TimesLive has a story about the alleged noncompliance of medical schemes with the CPA.…
S&P has downgraded the US from AAA to AA+. Is this economics? Is this politics? Is this accurate? All good questions. Does it matter? Not really. There may be some technical problems associated with the definition of “risk free” particularly when it comes to discounting cash flows at at “risk free curve”. The problem South…
If the Japanese story is one to go by, and so far it is, a downgrade of US debt by rating agencies will have hardly any impact. I don’t see what information the rating agencies have that everyone else doesn’t already have and despite tough economic times, I don’t see the US defaulting anytime soon.…
