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 [分享]S&P Downgrades US Credit Rating to AA-Plus |
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[分享]S&P Downgrades US Credit Rating to AA-Plus -- theoretical - (3715 Byte) 2011-8-06 周六, 09:11 (2403 reads) |
theoretical
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作者：theoretical 在 谈股论金 发贴, 来自【海归网】 http://www.haiguinet.com
“Some investors believe Treasurys will remain a safe haven in a volatile world, even without a solid triple-A credit rating. Others believe the U.S. will be forced to pay higher interest rates, perhaps about 0.5 percentage points, simply because they are seen as being slightly more risky than before. While only a slight gain, such a jump would increase the cost of a wide array of debt, from a home mortgage to the trillions carried by the U.S. government itself.
Lessons from other countries, such as Canada and Australia, suggest it can take years for a country to win back its AAA rating. At the same time, the economic impact of past downgrades has tended to be larger when multiple firms move to rate a country's debt as more risky as opposed to a single firm acting unilaterally.
The downgrade from S&P has been brewing for months. S&P's sovereign debt team, lead by company veteran David T. Beers, had grown increasingly skeptical that Washington policy makers would make significant progress in reducing the deficit, given the tortured talks over raising the debt ceiling. In recent warnings, the company said Washington should strive to reduce the deficit by $4 trillion over 10 years, suggesting anything less would be insufficient.
Negotiations to reach that threshold collapsed, and political leaders instead agreed to a last-second deal to cut the deficit by between $2.1 trillion and $2.4 trillion, making a downgrade almost unavoidable. When the $4 trillion deal fell apart, some Obama administration officials immediately warned that a downgrade from S&P was a real possibility.
S&P officials conferred with a team from the Treasury Department earlier in the week to talk about the debt plan, and government officials tried to explain its scope. S&P officials ended their briefing with an air of mystery about what they might do, and Treasury officials were braced for an announcement later in the week, people familiar with the matter said.
The full faith and credit of the U.S. was established by Alexander Hamilton's 1790 push to have the fledgling federal government assume and pay back debts states incurred during the Revolutionary War. It has gone largely unquestioned since, with just the occasional hiccup, including a 1979 debt-ceiling argument that delayed a few payments.
Recent demographic and economic changes, in particular the aging population and ballooning health-care costs, have made the long-term U.S. picture an ugly one, a problem exacerbated by a deep recession, which cut tax receipts and prompted a flood of fresh debt-financed spending.
Forging an agreement to tackle these problems has been elusive, with bitter partisan disagreements about tax policy and entitlement programs such as Medicare taking center stage.
The world's desire to invest in U.S. debt has a direct effect on businesses and consumers around the world. Many different types of debt, from the interest rate on a mortgage to the cost of a student loan, are pegged to the price the U.S. government pays to borrow money.
So far, economic turmoil in Europe and other parts of the world has continued to drive investors toward Treasurys, sparing the U.S. from a price usually paid by countries that can't get a handle on their debt problems. The phenomenon has kept interest rates paid on government debt very low, making it relatively inexpensive for the Treasury to finance its large deficits.
As a result of the downgrade, a few money-market funds might have to liquidate some of their Treasury holdings if they have tight rules about owning AAA-rated assets, but most aren't expected to be affected. Banks and insurers are unlikely have to hold significantly more capital against their Treasury holdings, though they could see their own bond ratings suffer.
J.P. Morgan Chase & Co. analysts estimate some $4 trillion worth of Treasurys are pledged as collateral by borrowers such as banks and derivatives traders. If that collateral isn't considered as high quality by lenders, the borrowers could be required to cough up more cash or securities to put the minds of lenders at ease.
That could force investors to sell off other assets to come up with the money. In a worst case scenario, credit markets could seize up, as they did during the Lehman Crisis.
Money-market funds held by millions of Americans hold some $1.3 trillion securities directly or indirectly exposed to Treasury and government agency securities, as well as short-term loans to financial institutions, known as repos, which are backed by Treasurys. Experts say that the downgrade won't force money-market funds to sell. But there are still risks.
If Treasurys tumble in value, funds will be forced to mark down their holdings, raising the potential for some to "break the buck" as the Reserve Primary fund did during the worst of the financial crisis”.
—Matt Phillips
作者：theoretical 在 谈股论金 发贴, 来自【海归网】 http://www.haiguinet.com
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