{"id":24859,"date":"2017-08-24T07:45:45","date_gmt":"2017-08-24T12:45:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24859"},"modified":"2017-08-24T07:45:45","modified_gmt":"2017-08-24T12:45:45","slug":"fitch-threatens-us-with-downgrade","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24859","title":{"rendered":"Fitch Threatens US with Downgrade"},"content":{"rendered":"
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Fitch Threatens US with Downgrade<\/a><\/h3>\n<\/header>\n
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Did it forget how the US government hounded Standard & Poor\u2019s?<\/strong><\/p>\n

Bitter irony! Just yesterday, I had a conversation with Bill Tilles<\/a>, and we agreed on all three points. This morning, we\u2019re already proven wrong on one of them:<\/p>\n

    \n
  1. A government shutdown<\/strong> as Congress fails to pass spending levels for fiscal 2018? Yes, it could happen.<\/li>\n
  2. A failure to raise the debt ceiling<\/strong>, thus pushing the US government into default, or \u201cselective default?\u201d Very<\/em> unlikely. Lawmakers are political animals that use charades and posturing to accomplish their goals, but they\u2019re not stupid <\/em>(we hope).<\/li>\n
  3. A threat by US ratings agencies to slash the US credit rating<\/strong> due to the debt-ceiling charade and the consequences of a \u201cselective default?\u201d No way, we agreed. Ratings agencies learned their lesson from how the US government hounded Standard & Poor\u2019s after its 2011 downgrade of the US.<\/li>\n<\/ol>\n

    A new day, and we\u2019re already wrong. Standard & Poor\u2019s may have learned its lesson. But Fitch Ratings hasn\u2019t \u2013 though its\u00a0language<\/a> this morning was a lot kinder and gentler (emphasis added).<\/p>\n

    If the debt limit is not raised in a timely manner prior to the so-called \u201cx date,\u201d Fitch would review the US sovereign rating, with potentially negative implications. We have previously said that prioritizing debt service payments over other obligations if the limit is not raised \u2013 if legally and technically feasible \u2013 may not be compatible with \u2018AAA\u2019 status<\/strong>.<\/p><\/blockquote>\n

    In the most recent letter to Congress, Treasury Secretary Steven Mnuchin said that the US would run out of money by the end of September. This can likely be stretched into October. Just this week, Senate Majority Leader Mitch McConnell swore<\/a> there was \u201czero chance\u201d that \u201cwe won\u2019t raise the debt ceiling.\u201d<\/p>\n

    But Fitch adds that Congressional posturing alone could cause a downgrade \u2013 the same reason S&P downgraded the US during the debt ceiling fight in 2011. Fitch:<\/p>\n

    …click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Fitch Threatens US with Downgrade Did it forget how the US government hounded Standard & Poor\u2019s? Bitter irony! Just yesterday, I had a conversation with Bill Tilles, and we agreed on all three points. This morning, we\u2019re already proven wrong on one of them: A government shutdown as Congress fails to pass spending levels for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7792,3108,1548,827,4254,4255],"class_list":["post-24859","post","type-post","status-publish","format-standard","hentry","category-economics","tag-downgrade","tag-fitch","tag-ratings-agency","tag-united-states","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24859"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24859\/revisions"}],"predecessor-version":[{"id":24860,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24859\/revisions\/24860"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}