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I'm sorry but that's bull. Anything can be changed. Contracts can be revised and even charters can be updated by a Board of Directors. If you hold a significa

I'm sorry but that's bull. Anything can be changed. Contracts can be revised and even charters can be updated by a Board of Directors. If you hold a significant amount of U.S. Bonds you aren't going to ditch them on S&P's say so. You're going to call a meeting of the Board of Directors or Trustees or whoever and decide based on your own judgement. The whole point of a rating agency is to provide you with research that you couldn't get based on your available resources. But every economist in the world is a resource on the U.S. Government's viability. You can turn on CNBC and get 24 hour coverage of it. So the U.S. is a special case and the ratings agencies don't mean all that much in regards to it.

DasIch 15y ago
You are assuming that enough people have an actual interest in letting the U.S. remain in the position it is now or that a recession in the U.S. will affect the rest of the world enough to matter. While that may have been true a couple of years or may be even months ago, I'd say that this is anything but certain. There are a lot of people and government through out the world who would like to see the U.S. weakened.
deleted 15y ago
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spdy 15y ago
There is a lot of hope in your post. Investors will just move money to another country and there are enough who have much better grow rates. (China / India). Or entities who will bet on the downfall of the U.S and there will be countries who have a high interest in this. On Monday you can short every major company the downfall will be significant. This will be very interesting to watch the next world recession is on our doorsteps. Money does not care who you are or what you do.
- radicaldreamer 15y ago
  Well, you might be surprised. Japan's market rallied 3% the day after their downgrade.
  - mbreese 15y ago
    That's probably because the market thought they hit rock bottom. Markets like uncertainty less than bad news, so they are much happier knowing about the downgrade.
    - joelhaus 15y ago
      p.s. To your earlier point, the '40 ACT details investment requirements for Money Market Funds [can't think of them now, but you are right, there are numerous statutory requirements related to the grade of security certain bodies may invest in]: http://taft.law.uc.edu/CCL/InvCoRls/rule2a-7.html http://taft.law.uc.edu/CCL/InvCoRls/rule2a-7.html
      - radicaldreamer 15y ago
        Those don't come into play because Moody's and Fitch maintained their AAA ratings for US treasuries.

DasIch 15y ago

You are assuming that enough people have an actual interest in letting the U.S. remain in the position it is now or that a recession in the U.S. will affect the rest of the world enough to matter. While that may have been true a couple of years or may be even months ago, I'd say that this is anything but certain. There are a lot of people and government through out the world who would like to see the U.S. weakened.

deleted 15y ago

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spdy 15y ago

There is a lot of hope in your post. Investors will just move money to another country and there are enough who have much better grow rates. (China / India). Or entities who will bet on the downfall of the U.S and there will be countries who have a high interest in this. On Monday you can short every major company the downfall will be significant. This will be very interesting to watch the next world recession is on our doorsteps. Money does not care who you are or what you do.

radicaldreamer 15y ago
Well, you might be surprised. Japan's market rallied 3% the day after their downgrade.
- mbreese 15y ago
  That's probably because the market thought they hit rock bottom. Markets like uncertainty less than bad news, so they are much happier knowing about the downgrade.
  - joelhaus 15y ago
    p.s. To your earlier point, the '40 ACT details investment requirements for Money Market Funds [can't think of them now, but you are right, there are numerous statutory requirements related to the grade of security certain bodies may invest in]: http://taft.law.uc.edu/CCL/InvCoRls/rule2a-7.html http://taft.law.uc.edu/CCL/InvCoRls/rule2a-7.html
    - radicaldreamer 15y ago
      Those don't come into play because Moody's and Fitch maintained their AAA ratings for US treasuries.