Debt Market strips US of AAA Rating

[Usually Curious]

This is REALLY BAD economic news.

http://finance.fortune.cnn.com/2010/...iple-a-rating/

For information purposes only:

Washington
Debt market strips U.S. of triple-A rating
Posted by Colin Barr
October 12, 2010 2:14 pm

The United States has lost its gold-plated triple-A rating -- in the eyes of credit traders, at least.

U.S. sovereign debt was the third-worst performer in a closely watched derivatives market during the third quarter, CMA said Tuesday in its quarterly review of global sovereign credit risk.



Not a vote of confidence



The cost of insuring against a default on U.S. government bonds via so-called credit default swaps rose 28% in the quarter ended Sept. 30, the firm said.

That puts the United States' third-quarter performance behind only two other nations, both of which are struggling with the early stages of sovereign debt crises: Ireland, whose CDS prices rocketed 72% to a record amid growing questions about the costs of a massive bank bailout, and Portugal, whose costs jumped 30%.

What's more, the decline leaves U.S. debt trading at an implied rating of double-A-plus for the first time in memory.

[MrsJez]

This does NOT bode well for our (The USA's) future...

[newbymom05]

Well they're talking about credit default swaps and derivatives, and the article says it "implies" that US bonds may lose their triple a rating and be downgraded to double, based on CSD exposure, not any change in US. But seriously, DOW closed above 11K yesterday and today, they've been squawking about a downgrade since '08 when the DOW was cratering below 7K. IMO market proves investors, sovereign and otherwise, perceive dollar as safest right now. Let's face it, it's a global recession/depression, not just here.

[Usually Curious]

But the dollar is looowww and falling daily. We are losing our purchasing power really fast. The stock market closing up makes NO sense whatsoever.

[Mulvah]

I'm surprised this is just now happening, to be honest. Very unfortunate.