8 ms·
When S&P did this back in 2011, the DoJ opened an investigation in to them (regarding their activities in mortgage backed securities), and the CEO resigned pret
by scrlk 3y ago
When S&P did this back in 2011, the DoJ opened an investigation in to them (regarding their activities in mortgage backed securities), and the CEO resigned pretty quickly as well.
Fun fact: Microsoft has a higher credit rating from S&P (AAA) than the US government (AA+) - https://www.microsoft.com/en-us/investor/faq.aspx https://www.microsoft.com/en-us/investor/faq.aspx
(Fitch withdrew their MSFT rating at the start of the year, but it was also AAA)
- OJFord 3y agoIt's amusing, but also intuitive? When we have companies larger than countries, operating globally, it sort of stands to reason they should be safer bets than any one country - just like selling mortgages to thousands vs. a massive one to one person, or anything else in finance.
- fieldcny 3y agoThis is just so unbelievably short sited. A country is massively different than a company. A country has the force of law, it has the right to use deadly force when threatened, it can print money, seize assets, tax citizens, jail people, expel people. Like this isn’t just about money and how much you make, that’s what a company is, a country is life or death, peace and prosperity or war and famine. JFC…
- vimax 3y agoI don’t think they were advocating for anything, just describing what we have right now.
- fieldcny 3y agoThe statement was that large companies should be “safer” because they are globally diverse, which completely ignores the fact that government and companies are apples and oranges. As long as you are borrowing in the currency you own, you can print money to pay that debt off, maybe it happens like Weimar Germany where you trigger a painful bought of hyperinflation, but the debt gets paid and there is no default. There is not a company in existence that can say the same thing
- OJFord 3y agoI don't really follow what you think I was implying - that we should somehow make ourselves stateless subjects of big tech? - but I assure you I wasn't.
- bcrl 3y agoI don't recall any instances of Microsoft hitting a "debt ceiling" and ceasing payments to employees and other parties on a regular basis every few years. Twitter might be a better comparison.
- lazide 3y agoMicrosoft doesn't have: - The worlds largest military budget - More aircraft carriers and aircraft than the rest of the world combined - Is also not nuclear armed (and the only folks to actually nuke anyone in anger) - Their own printing presses for the worlds reserve currency - Sovereignty over the rating agencies physical location.
- bcrl 3y agoMicrosoft's governance when it comes to financial matters still seems better to me.
- lazide 3y agoMicrosoft can go bankrupt. It's not clear the US can.
- hollerith 3y agoThe US can default on (choose not to repay) its debt obligations.
- HDMI_Cable 3y agoCan it? According to the constitution, specifically Ammendment XIV, "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." Does that mean the US cannot legally default on its debts?
- 3y ago
- supertrope 3y agoSovereign credit ratings cannot be directly compared with corporate credit ratings.
- rhaway84773 3y agoThe investigation began well before the cuts. And the investigation would have happened anyways because in 2011 the House had completed an investigation which pointedly called out the ratings agencies. And the big problem with the cut was it made no sense. Which was evident from the fact that the US continued to enjoy nearly a decade more of sustained borrowing at nearly 0 rates and the cut itself had no impact.
- steve76 3y ago[dead]