They did that after the markets closed on Friday? Wow. Monday is going to be a blood bath.
Here is what it looked like when Fitch downgraded the US in 8/1/2023. As you can see it went down under the 200sma but then came back up to all time highs. Who knows what will happen this time with all the uncertainty.
I’m going to say market largely ignores this downgrade. The market has seen a downgrade before and moved on. Could be wrong, not claiming miraculous foresight.
Ten year yields now above the „Trump folds“ level in April.
The “Big Beautiful Bill” is 1 step closer to passage. So Moody’s forward look at the throwing gas on a fire effect of this bill to the national debt looks spot on.
Can’t wait to hear the mumbo jumbo from the " fiscally responsible" Party, as they twist themselves in a pretzel falling all over themselves rationalizing how this is in fact “fiscally responsible”.
Is hyper inflation on the table in the god old USA ??
We’ll get a lecture about how throwing Trillions more at the “JCs” will “grow the economy out of the deficit”.
Steve
“We’ll get a lecture about how throwing Trillions more at the “JCs” will “grow the economy out of the deficit”.”
I bookmarked that link you supplied on the deficits per each President. The “lavish cash on and set the JC’s free” fantasy doesn’t stand, if a person is rational and not mentally unstable, lol. Uh oh, that is a really high bar I’m setting for modern day Americans.
Doesn’t matter. They will advance that “job creation” narrative again. Remember when Snyder raised taxes on retirees and working poor, to cover two rounds of “JC” tax cuts? Snyder hailed the “job providers” as the justification for the wealth transfer from Proles to “JCs”.
By signing the tax package last week, Governor Rick Snyder made good on his campaign promise to eliminate the much-hated “Michigan Business Tax.” That tax was a 22 percent surcharge on top of corporate income and gross receipts taxes that corporations paid. The new law will replace it with a 6 percent corporate income tax. “The overhaul of our tax structure lets job providers nationwide know that Michigan is the place to be,” the governor said when he signed the law on May 25.
Michigan Proles subsidize “JCs”.
Steve
Tony, this YT e-ziner, covers China related economic topics.
He has recently started “Market Update” as a complement to his “China Update” channel.
In this YT, at 4:20, Tony discusses the Moody’s downgrade of us debt and the implications for people in other stock exchanges holding US debt.
Tony says that large funds, pension funds and mutual funds, are required by their bylaws to sell or not hold treasuries and and debt that are rated less than top tier. The Moody’s downgrade, along with previous downgrades by Standard and Poors and Fitch, means that the US debt no longer meets the requirements. This poses problems for foreign mutual funds and pensions and such.
Tony says that the Japanese ratings agency, RNI, has maintained its US rating, which makes the US treasuries available to the Japanese exchange. He also says that the Hong Kong pension funds rely on RNI rating, in order to be legally able to hold US treasuries.
Japan, thru the RNI, holds a top tier card in trade negotiations with TIG?
FWIW
ralph