Can you expound on that?

In my industry, I might consider spreads or yields to indicate questions of creditworthiness. For example, CCC "junk" rated corporate debt, priced at very low spreads, is trading about 9%.

10-year US Treasury bonds are yielding less than 2% (within spitting distance of 50-year lows).

The only way the US Treasury cannot raise US dollars is in the event of a currency rejection. Every involuntary case of which in the history of monetary systems like the US has been after a major exogoneous shock which caused a major loss of productive capacity: loss of war on domestic soil, major governmental regime change (not going from a Neo-Con to a Liberal POTUS but from representative democracy to dictatorship), etc.


Currency rejection is possible, but so improbable given current and plausible outlooks, that it's hardly worth spending much time on (even though I have spent plenty of time on it here in the past :) ).

We were AAA, and now we're AA+. Can't that happen again?

What a rating agency rates treasury bonds for does not really matter. All that matters is how the market reacts to a downgrade. When we were downgraded last time it had basically no effect on the market.

One rating agency downgraded the Treasury bonds a notch, based primarily on their perception of US political dysfunction. That can happen again, but see the second question in that post...

:party:

After all, those ratings agencies were the same one rubber stamping "AAA" on baskets of mortgage securities they either (A) didn't bother to try and understand or (B) understood and thought were high-risk. They have virtually no credibility in my mind.

That's close enough for government work. :D (Technically, yields on the US 10-year went down and prices went up after the downgrade, but that was as much to do with Europe as it was to do with S&P).

Huge-ass image that will get mega-reduced:
http://www.accounting-degree.org/sca...g-scandals.jpg

Sub-titled: Don't worry, markets are efficient.

We used to see Bernie Ebbers around town. Not so much anymore.

Speaking of throwing down the gauntlet on the US bankruptcy idea...

From 2010-10-22. No one has taken him up on the offer. :brain:

https://www.miataturbo.net/attachmen...ine=1362753606

Your car is dirty. Vacuum it.

garage is currently below 40°F; ill wait.

Bah. 40°F around here is balmy spring weather. I'll be doing an oil/fuel filter change outside this weekend.

its supposed to be in 60s this weekend. ill wash all salt off then and vacuum, just for you.

Ell oh ell at your weird frozen rain.

Braineack, rejoice in the glory:
https://www.miataturbo.net/attachmen...ine=1362788873

he needs a permit for that raptor.

Got the oil changed, did you vacuum?

It's nearly 50 degrees here, a veritable heatwave. I love global warming.

ive bene lazy this morning. i plan to wash and vacuum both my cars today.

Well, I guess we're all in the clear now, because it just doesn't matter, and perceptions are apparently more important than fundamentals.

...sorry, just trying to get used to the upside-down rules in this new world.

Perceptions have always been the only thing that mattered. Under normal circumstances the "fundamentals" guide perception. The difference in this situation is that the "fundamentals" do not apply to the U.S. govt. This is why the market did not react poorly to a downgrade. The U.S. will not run out of money to pay its debts and the country was no where near a complete political meltdown like a coup or something.