PoliticalChic
Diamond Member
U.S. Debt Rating Downgraded at Egan-Jones
FREE Breaking News Alerts from StreetInsider.com!
E-mail Address
Top News
Most Read
Highlighted
Facebook (FB) Shuns BATS, NYSE for Nasdaq
U.S. Debt Rating Downgraded at Egan-Jones
Market Wrap: Facebook Skips Nose, Picks Market; Walgreen's Pain Pill Investigation; Initial Claims Drop Again
Initial Claims Fall to Four-Year Low of 357K as All Signs Point to 'Improvement'
Target (TGT) Raises Q1 Outlook; Comps Jump 7.3% in March
April 5, 2012 5:20 PM EDT
After the bell Thursday, rating agency Egan-Jones downgraded the U.S. credit rating from AA+ to AA, with a negative outlook. The firm cited the country's debt exceeding 100% of GDP.
According to the report, posted at ZeroHedge:
Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
StreetInsider.com - U.S. Debt Rating Downgraded at Egan-Jones
Bye, bye Obama........
FREE Breaking News Alerts from StreetInsider.com!
E-mail Address
Top News
Most Read
Highlighted
Facebook (FB) Shuns BATS, NYSE for Nasdaq
U.S. Debt Rating Downgraded at Egan-Jones
Market Wrap: Facebook Skips Nose, Picks Market; Walgreen's Pain Pill Investigation; Initial Claims Drop Again
Initial Claims Fall to Four-Year Low of 357K as All Signs Point to 'Improvement'
Target (TGT) Raises Q1 Outlook; Comps Jump 7.3% in March
April 5, 2012 5:20 PM EDT
After the bell Thursday, rating agency Egan-Jones downgraded the U.S. credit rating from AA+ to AA, with a negative outlook. The firm cited the country's debt exceeding 100% of GDP.
According to the report, posted at ZeroHedge:
Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
StreetInsider.com - U.S. Debt Rating Downgraded at Egan-Jones
Bye, bye Obama........