Monday, July 18, 2011

Weiss downgrades US debt

Martin Weiss is what some might call a perma-bear.

But that doesn't mean he's wrong.

Weiss doesn't buy the myth that US sovereign debt should be rated AAA. Weiss thinks a C- is more in order.

His organisation issued the downgrade on Friday:
 Weiss Ratings Downgrades United States Debt to C-Minus 
JUPITER, Florida (July 15, 2011) — Weiss Ratings, an independent rating agency of U.S. financial institutions and sovereign debts, has downgraded the debt of the United States government from C to C-minus. 
The C-minus rating for the U.S. reflects a continued deterioration in the weaknesses cited in the Weiss Ratings release of April 28, 2011, including heavy debt burdens, shaky international stability, and poor economic health. 
Weiss Ratings senior financial analyst Gavin Magor commented: “Our downgrade today is not contingent on the outcome of the debt ceiling debate in Washington. It is driven exclusively by the numbers, which indicate that, in addition to a decline in the long-standing weaknesses we noted three months ago, the U.S. has already lost the golden halo that helped guarantee liquidity and acceptance of its government securities in global markets.”  
On the Weiss Ratings scale, which ranges from A (excellent) to E (very weak), a C-minus rating is the approximate equivalent of a triple-B-minus on the scales used by other credit rating agencies, or approximately one notch above speculative grade (junk).  
 Friday's full release from Weiss Ratings is available here

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