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Fitchslapped: French Rating Agency Puts US AAA Rating On Negative Watch - Full Statement

Tyler Durden's picture




 

So what exactly did Reid know and when?

  • *UNITED STATES' AAA IDR RATING MAY BE CUT BY FITCH :3352Z US
  • FITCH SAYS PUTS U.S. ON RATING WATCH NEGATIVE AS U.S. AUTHORITIES HAVE NOT RAISED FEDERAL DEBT CEILING IN A "TIMELY MANNER
  • *FITCH STILL SEES U.S. DEBT CEILING TO BE RAISED SOON :3352Z US
  • *FITCH SEES RESOLVING US RWN BY END OF 1Q '14 AT LATEST
  • *FITCH STILL SEES U.S. DEBT CEILING TO BE RAISED SOON :3352Z US
  • *FITCH SEES U.S. ECONOMIC GROWTH REVERTING TO 2.25% AFTER 2017
The USD is under significant pressure now; US equities are undecided whether this is great news
Full Statement:
Fitch Places United States' 'AAA' on Rating Watch Negative

NEW YORK & LONDON -- October 15, 2013

Fitch Ratings has placed the United States of America's (U.S.) 'AAA' Long-term foreign and local currency Issuer Default Ratings (IDRs) on Rating Watch Negative (RWN). The ratings of all outstanding U.S. sovereign debt securities have also been placed on RWN, as has the U.S. Short-term foreign currency rating of 'F1+'. The Outlook on the Long-term ratings was previously Negative. The U.S. Country Ceiling has been affirmed at 'AAA'.

Fitch expects to resolve the RWN by the end of Q114 at the latest, although timing would necessarily reflect developments and events, including the duration of any agreement to raise the debt ceiling.

KEY RATING DRIVERS

In line with Fitch's previous statements, the RWN reflects the following key rating drivers and their relative weights:

High

- The U.S. authorities have not raised the federal debt ceiling in a timely manner before the Treasury exhausts extraordinary measures. The U.S. Treasury Secretary has said that extraordinary measures will be exhausted by 17 October, leaving cash reserves of just USD30bn. Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.

- Although the Treasury would still have limited capacity to make payments after 17 October it would be exposed to volatile revenue and expenditure flows. The Treasury may be unable to prioritise debt service, and it is unclear whether it even has the legal authority to do so. The U.S. risks being forced to incur widespread delays of payments to suppliers and employees, as well as social security payments to citizens - all of which would damage the perception of U.S. sovereign creditworthiness and the economy.

- The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S. This "faith" is a key reason why the U.S. 'AAA' rating can tolerate a substantially higher level of public debt than other 'AAA' sovereigns.

Medium

- The repeated brinkmanship over raising the debt ceiling also dents confidence in the effectiveness of the U.S. government and political institutions, and in the coherence and credibility of economic policy. It will also have some detrimental effect on the U.S. economy.

The 'AAA' rating reflects the U.S.'s strong economic and credit fundamentals, including:

- Its highly productive, diversified and wealthy economy; extraordinary monetary and exchange rate flexibility; and the exceptional financing flexibility afforded by the global reserve currency status of the U.S. dollar and the depth and liquidity of domestic capital markets - in particular the U.S. Treasury market. The U.S. sovereign credit profile also benefits from the respect for property rights, the rule of law and a high degree of social stability.

- Fitch continues to judge that the U.S. economy (and hence tax base) remains more dynamic and resilient to shocks than its high-grade rating peers. Fiscal and macroeconomic risks emanating from the financial sector are generally low and diminishing and becoming supportive of, rather than a drag on, economic growth. Fitch forecasts economic growth to pick up from 1.6% in 2013 to 2.6% in 2014 and to average 3% over 2015-17, before reverting to its assumed long-run trend growth rate of 2.25%. The projected recovery is supported by easing headwinds from private sector debt deleveraging, a pick-up in the housing market and a gradual decline in unemployment.

- The 'AAA' rating also reflects the halving of the federal budget deficit since 2010, which is now approaching a level consistent with debt stabilisation. The Budget Control Act passed in August 2011 implied significant fiscal consolidation and Congress and the Administration have adhered to the automatic spending cuts - the sequester - specified under the Act in the absence of agreement on an alternative and equivalent set of deficit-reduction measures. In addition, the passage of the American Taxpayer Relief Act on 1 January 2013, which implied a tax increase of more than USD600bn, has also contributed to the deficit reduction effort.

- Fitch's medium-term fiscal projections imply federal and general government (which includes states and local governments) gross debt stabilising next year and over the remainder of the decade at around 72% and 104% of GDP, respectively. This is below the 80% and 110% thresholds that Fitch previously identified as being inconsistent with the U.S. retaining its 'AAA' status.

- Nevertheless, public debt stabilisation at such elevated levels still render the US economy and public finances vulnerable to adverse shocks and in the absence of additional spending reform and revenue measures, deficits and debt will begin to rise again at the end of the decade. The U.S. is the most heavily indebted 'AAA' rated sovereign, with a gross debt ratio equivalent to double that of the 'AAA' median.

RATING SENSITIVITIES

The RWN reflects the following risk factors that may individually or collectively result in a downgrade of the ratings:

- Failure by the government to honour interest and/or principal payments on the due date of U.S. Treasury securities would lead Fitch to downgrade the U.S. sovereign IDR to 'Restricted Default' (RD) until the default event was cured. We would also downgrade the rating of the affected issue(s) to 'B+' from 'AAA', the highest rating for securities in default in expectation of full or near-full recovery. Debt securities approaching maturity or those with approaching coupon payments would be vulnerable to a downgrade. The Country Ceiling would likely remain 'AAA'.

In the event of a deal to raise the debt ceiling and to resolve the government shutdown, which Fitch expects, the outcome of a subsequent review of the ratings would take into account the manner and duration of the agreement and the perceived risk of a similar episode occurring in the future. It would also reflect Fitch's assessment of the following main factors:

- The impact of the debt ceiling brinkmanship and government shutdown on our assessment of the effectiveness of government and political institutions, the coherence and credibility of economic policy, the potential long-term impact on the U.S. sovereign's cost of funding and cost of capital for the economy as a whole, and the implications for long-term growth.

- Our assessment of the prospects for further deficit-reduction measures in future years necessary to contain government deficits in the face of long-term spending pressures and place public debt on a downward path over the medium to long term.

KEY ASSUMPTIONS

Fitch continues to believe that an agreement will be reached to end the current political impasse and raise the U.S. debt ceiling. Even if the debt limit is not raised before or shortly after 17 October, we assume there is sufficient political will and capacity to ensure that Treasury securities will continue to be honoured in full and on time.

Fitch's federal debt projections reflect its economic and fiscal policy assumptions and were detailed in the Special Report, 'U.S. Medium-Term Fiscal Projections - An Update' (dated 28 June 2013; see link below). Subsequent to that analysis, the Bureau of Economic Analysis revised the level of GDP up by around 3.4% due to revisions in the way GDP is calculated, including reclassifying spending on R&D and intellectual property as investment. This has had the statistical effect of lowering debt/GDP ratios, but has not significantly affected the trajectory of debt dynamics or its sensitivity to shocks. Since the June review, Fitch has revised down its forecasts for GDP growth for 2013 to 1.6% from 1.9% and for 2014 to 2.6% from 2.8%.

Fitch's medium-term fiscal projections incorporate assumptions regarding the medium-term growth potential of the US economy and do not incorporate potential upside benefits from shale gas or downside risks emanating from the eurozone and elsewhere. They draw heavily upon Congressional Budget Office (CBO) projections, including CBO assumptions and judgements regarding the take up of various benefits as well as the rate of growth of health care spending.

Financial sector risks are currently judged to be low as reflected by Fitch's stable outlook for the U.S. banking sector.

 

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Tue, 10/15/2013 - 16:52 | 4057753 emsolý
emsolý's picture

Banana yes, Republic... not so sure

Tue, 10/15/2013 - 16:52 | 4057766 James_Cole
James_Cole's picture

Next 'downgrade': Fitch lol

Tue, 10/15/2013 - 16:57 | 4057787 cougar_w
cougar_w's picture

Yo Tyler, where is the "Donkey Konk" graphic on this one?

CUZ IT IS ON BEOTCHEZ!

Tue, 10/15/2013 - 17:00 | 4057803 HoofHearted
HoofHearted's picture

Just following the script as Harry Reid wrote it. Now he can really pressure Boehner and the Rs to accept whatever he and Obombya put out there...

Tue, 10/15/2013 - 17:06 | 4057831 max2205
max2205's picture

Market is 1% from highs???doubt it....

Tue, 10/15/2013 - 17:08 | 4057836 Manthong
Manthong's picture

Moon Dew!

Next thing you know they’ll be a bringin’ bad joo-joo to Sock Jen.

Tue, 10/15/2013 - 17:11 | 4057865 camaro68ss
camaro68ss's picture

hahaha, where still AAA. bwhahahahaha

Tue, 10/15/2013 - 17:50 | 4058056 knukles
knukles's picture

Fitch Fries

Tue, 10/15/2013 - 17:13 | 4057867 Popo
Popo's picture

You would think that NOT raising the debt limit would be positive for the USD.   So... taking on more unrepayable debt is ...going to be good for the USD?   Nothing makes sense anymore...

Tue, 10/15/2013 - 17:27 | 4057921 onewayticket2
onewayticket2's picture

As long as the ebt cards and other freebies keep Rollin in, there will be no outrage...due to any downgrade, shutdown, etc.

30 min after the ebt shutdown....pandemonium.

Tue, 10/15/2013 - 17:30 | 4057951 fonzannoon
fonzannoon's picture

This is just so funny....

  • FITCH SAYS PUTS U.S. ON RATING WATCH NEGATIVE AS U.S. AUTHORITIES HAVE NOT RAISED FEDERAL DEBT CEILING IN A "TIMELY MANNER
Tue, 10/15/2013 - 20:48 | 4058758 rehypothecator
rehypothecator's picture

Indeed.  The only way to maintain the highest credit rating is to raise the debt ceiling every time, instantly, with no hint of disruptions.  

Tue, 10/15/2013 - 18:24 | 4058176 ElvisDog
ElvisDog's picture

Most of the EBT uses I come across could live off their accumulated fat for weeks, maybe all winter.....

Wed, 10/16/2013 - 05:33 | 4059606 cnmcdee
cnmcdee's picture

When the EBT does shut down wait about three weeks.  You should be able to take a bucket of rice down to the tough neighborhoods and trade it  for an I-phone, new laptop, or 20" chrome rims.

Wed, 10/16/2013 - 05:35 | 4059608 cnmcdee
cnmcdee's picture

If Foodstamps are scaled back in November it's a perfect time to short Wal-Mart, they probably make 20% of their food sales from EBT transactions.

Wed, 10/16/2013 - 05:31 | 4059601 cnmcdee
cnmcdee's picture

yah exactly if more debt is better for their ratings, they should just table a bill with infinity symbols for their limits, and drive that titanic right to the bottom of the ocean.

Tue, 10/15/2013 - 17:10 | 4057850 FL_Conservative
FL_Conservative's picture

Only in a banana republic can fucking Fitch put the US on negative watch ONLY because they haven't yet raised the debt ceiling.  What the fuck are they smoking?????????????

Tue, 10/15/2013 - 18:28 | 4058189 AllWorkedUp
AllWorkedUp's picture

But who farted. Harry said he just wants to start working together! Are you saying he's a lying scumbag?

As for the downgrade, what did he know and when did he know it?

Tue, 10/15/2013 - 16:59 | 4057806 Rainman
Rainman's picture

Screw donkey konk ....buy tommorow dip !

Tue, 10/15/2013 - 17:01 | 4057811 AlaricBalth
AlaricBalth's picture

"The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S. This "faith" is a key reason why the U.S. 'AAA' rating can tolerate a substantially higher level of public debt than other 'AAA' sovereigns."

http://www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=805079&origin=home&cm_sp=homepage-_-Featured_Content_Archive-_-Fitch%20Places%20United%20States'%20'AAA'%20on%20Rating%20Watch%20Negative

 

Faith: Belief that does not rest on logical proof or material evidence

Tue, 10/15/2013 - 17:04 | 4057817 TruthInSunshine
TruthInSunshine's picture

What willl two of NerObama's handlers & complete & total criminals, who received massive loads of taxpayer cheddar, being one Warren "Thank Lord for Bailouts" Buffett & Charles "Suck It, Taxpayers!" Munger, instruct their pet credit ratings agency, Moody's, to do?

Tue, 10/15/2013 - 17:54 | 4058065 BabyBen
BabyBen's picture

FITCHSLAPPED!

Tue, 10/15/2013 - 18:01 | 4058097 johngaltfla
johngaltfla's picture

Got SH?

Tue, 10/15/2013 - 17:03 | 4057823 debtor of last ...
debtor of last resort's picture

ZZZimbabwe.

Tue, 10/15/2013 - 17:11 | 4057863 RmcAZ
RmcAZ's picture

Fitch is dumb as fuck. They should be downgrading the U.S. because we ARE going to raise the debt ceiling, not because it may not get raised.

Tue, 10/15/2013 - 17:50 | 4058054 Rick Blaine
Rick Blaine's picture

Yeah, you can't make this shit up.

So, basically...if we STOP printing money to keep this charade going, THAT's what's going to hurt our credit rating.

It's like we're not even in the Matrix anymore...it's more like a Matrix within the Matrix.

Tue, 10/15/2013 - 19:16 | 4058378 DosZap
DosZap's picture

I just love it whe the SOB's that aren't going to have to pay this shit back, decides to downgrade on the premise(no agreement to shoot yourself in the head,and incur even more debt,an UNLIMITED ceiling seems to be a greater RISK than not agreeing).

Tue, 10/15/2013 - 16:53 | 4057755 LetThemEatRand
LetThemEatRand's picture

Gold Fitches!

Tue, 10/15/2013 - 16:59 | 4057800 IridiumRebel
IridiumRebel's picture

Great mindz think alike. I will let mine stand cuz of the small discrepancy in spelling, but let it be known you beat me to the punch. Kudos.

Tue, 10/15/2013 - 17:20 | 4057903 Rainman
Rainman's picture

Ida hated to lose that one too...kudos anyway.

Tue, 10/15/2013 - 16:54 | 4057761 AllWorkedUp
AllWorkedUp's picture

GOOD. BURN THE MOTHER FUCKER DOWN!!!

Tue, 10/15/2013 - 16:52 | 4057763 TeamDepends
TeamDepends's picture

Is this like suicide watch?

Tue, 10/15/2013 - 16:54 | 4057778 EscapeKey
EscapeKey's picture

No - this is extremely bullish.

Debt is good. More debt is better.

 

Tue, 10/15/2013 - 16:57 | 4057797 TeamDepends
TeamDepends's picture

But, shouldn't the fat man stop eating?

Tue, 10/15/2013 - 17:00 | 4057807 superflex
superflex's picture

Debt is good. More debt is gooder.

Tue, 10/15/2013 - 17:05 | 4057826 Motley Fool
Motley Fool's picture

Most debt is double plus gooder.

Tue, 10/15/2013 - 17:31 | 4057958 epwpixieq-1
epwpixieq-1's picture

No doubt that it is better, the only question is for Whom?

Tue, 10/15/2013 - 17:32 | 4057959 tom a taxpayer
tom a taxpayer's picture

Its like double secret probation.

http://www.youtube.com/watch?v=1tfK_3XK4CI

Tue, 10/15/2013 - 16:52 | 4057764 WallowaMountainMan
WallowaMountainMan's picture

"*FITCH SEES U.S. ECONOMIC GROWTH REVERTING TO 2.25% AFTER 2017"

"*FITCH SEES U.S.mortgage market safe,secure, and AAA rated"  2006

 

 

:)

Tue, 10/15/2013 - 17:36 | 4057976 tom a taxpayer
tom a taxpayer's picture

How dare Fitch say the Emporer is less than fully clothed!

Tue, 10/15/2013 - 16:57 | 4057768 SheepDog-One
SheepDog-One's picture

Fuckover process not 'timely' enough for the central bankster maniacal monetizer overlords! WTF has happened here, has ObaMao gone rogue? Watch out for spectacular false flag events now.

Tue, 10/15/2013 - 17:44 | 4058011 Wile-E-Coyote
Wile-E-Coyote's picture

They thought they had Hitler under control, look what happened there.

Tue, 10/15/2013 - 16:55 | 4057769 President Palin
President Palin's picture

I guess the US DoJ will launch a probe tomorrow to investigate Fitch's wrong doings in the past...

Tue, 10/15/2013 - 16:56 | 4057781 wallstreetapost...
wallstreetaposteriori's picture

I was thinking the same THING!!!  LOL

Tue, 10/15/2013 - 16:57 | 4057798 Winston Churchill
Winston Churchill's picture

The opposite.placeHolder just took some pressure off the jackboot on the ratings

agencies throats, to help jam up the republicans.

Tue, 10/15/2013 - 17:09 | 4057845 EscapeKey
EscapeKey's picture

Well, it's French. Isn't that enough for a conviction these days?

Wed, 10/16/2013 - 05:58 | 4059622 Analyse2
Analyse2's picture

@EscapKey

Fitch is as French as McDonald's is Mexican...

Fitch Ratings Inc. is a jointly owned subsidiary of Hearst Corporation and FIMALAC SA.

On April 12, 2012, Hearst increased their stake in the Fitch Group to 50%.

Previously, Hearst owned a 40% stake in the company, while FIMALAC was the majority owner with 60% stake. Fitch Ratings and Fitch Solutions are part of the Fitch Group.

Fitch Ratings is dual-headquartered in New York, USA, and London, UK

Fitch is as French as McDonald's is Mexican...But it's always fun to take a cheap shot at the French, isn't it ? 

It seems that the hate of Iraq’s warmongers is still there alive…

 



Tue, 10/15/2013 - 18:00 | 4058091 Agent P
Agent P's picture

Yup.  $5 billion lawsuit coming before Christmas.  Das right, nobody fucks with de Jesus! 

Tue, 10/15/2013 - 16:56 | 4057770 Kirk2NCC1701
Kirk2NCC1701's picture

Hey Fitch, watch this!  [Harry Reid sideways gesture]

http://www.zerohedge.com/news/2013-10-15/world-according-schizoharry-reid

Tue, 10/15/2013 - 16:55 | 4057771 SheepDog-One
SheepDog-One's picture

2017...after that, it's all good!

Well giant 'WHEW' to that! We'll probably all be dead!

Tue, 10/15/2013 - 16:55 | 4057773 the not so migh...
the not so mighty maximiza's picture

this won't stand man

Tue, 10/15/2013 - 17:02 | 4057791 SheepDog-One
SheepDog-One's picture

This agression will not, like, stand, man!

This aggresssion will not stand, Man. - YouTube

Tue, 10/15/2013 - 16:54 | 4057776 Chupacabra-322
Chupacabra-322's picture

Let the mayhem begin

Tue, 10/15/2013 - 16:54 | 4057777 thismarketisrigged
thismarketisrigged's picture

harry reid should fucking be arrested right now for trading on inside information.

 

there is no way he did not short this market after he found out that fitch would put us on negative watch.

 

how the fuck did he know it would be as early as today?

 

what a douchebag

Tue, 10/15/2013 - 17:05 | 4057827 philosophers bone
philosophers bone's picture

Even if he didn't trade, he leaked.  Still illegal.  Is there a secret piece of legislation passed by Congress/Senate that says public officials and the Fed (and Carl Icahn, presumably) are exempt from insider trading / tipping?   No wonder all we have is computers trading among each other.

Tue, 10/15/2013 - 18:27 | 4058185 Mototard at Large
Mototard at Large's picture

Actually, members of Congress and their staff ARE excempt from insider trading - as of last year.

 

http://www.cnbc.com/id/100647407

Tue, 10/15/2013 - 18:32 | 4058210 Pumpkin
Pumpkin's picture

This should tell you something about those 'laws' they pass in congress.  They are not law, but rather administrative rules.  As in rules for the administration.  If you violate one, you will get taken to an administrative hearing.  This will look and act just like a court, but has no judicial power.  Those courts are a fraud for you and me.  But for those within the adminstration, they are a real as real gets.  And it is perfectly lawful and legal for them to say who does and who does not have to follow those adminstrative rules.  As longs as they part of the administration. 

Tue, 10/15/2013 - 17:27 | 4057933 JFKFC
JFKFC's picture

Tyler posted an image last week or so where Fitch would downgrade us if we took it to the last minute.

Tue, 10/15/2013 - 16:56 | 4057779 Mercury
Mercury's picture

Well duh, everyone is watching with negativity.

Tue, 10/15/2013 - 16:56 | 4057795 cougar_w
cougar_w's picture

Yeah but now it's all official and like that.

Tue, 10/15/2013 - 17:02 | 4057808 Mercury
Mercury's picture

Hey, it's cov-lite debt we're talking about here and shit can get rocky sometimes...

Tue, 10/15/2013 - 16:57 | 4057788 OldE_Ant
OldE_Ant's picture

hahahaaa.  Negative watch.

Only took them what 5 years to figure that out.

Our independant rating agencies HARD at work TO FUCK anyone without a boner, UP THE ASS by putting a positive tilt on reality.

Tue, 10/15/2013 - 17:26 | 4057942 epwpixieq-1
epwpixieq-1's picture

Moody's is the last one standing. It will keep this precious AAA rating, till the printing press runs out of Ink, even if the Ink is bought on credit from China.

Tue, 10/15/2013 - 16:56 | 4057794 IridiumRebel
IridiumRebel's picture

Gold, Fitchez.

Tue, 10/15/2013 - 16:58 | 4057804 Iam Yue2
Iam Yue2's picture

Fitch can now expect a visit from the SEC’s Office of Compliance Inspections and Examinations seeking information about their (possible) rating decision.

Tue, 10/15/2013 - 17:05 | 4057824 cougar_w
cougar_w's picture

Actually that will be the FBI regarding their alleged insider trading activity. 

Tue, 10/15/2013 - 17:05 | 4057833 B2u
B2u's picture

NSA and IRS visits too....

Tue, 10/15/2013 - 17:01 | 4057805 GrinandBearit
GrinandBearit's picture

The futures market doesn't seem to care.

Tue, 10/15/2013 - 17:03 | 4057813 Dadburnitpa
Dadburnitpa's picture

So a bankrupt nation might be downgraded because it isn't able to get further into debt.  Maybe this would make sense to me if I got myself addicted to meth.

Tue, 10/15/2013 - 17:04 | 4057816 4 wheel drift
4 wheel drift's picture

next.... get the dead beats whores in DC and hang them by the balls.....

 

positive rating may be reinstated

Tue, 10/15/2013 - 17:02 | 4057819 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

BTFD - Buy The Fucking Default bitchez. Sunshine, unicorns, lollipops and optimism is all the rage. The MSM says so therefore it must be true.

Tue, 10/15/2013 - 17:19 | 4057828 NuYawkFrankie
NuYawkFrankie's picture

Futures getting very fitchety.

Tue, 10/15/2013 - 17:09 | 4057844 uncle_vito
uncle_vito's picture

Honey Badger market.   Doesn't give a shit.

Tue, 10/15/2013 - 17:08 | 4057848 Quinvarius
Quinvarius's picture

If the DOW does not give up 500 points tomorrow, Congress won;t cover their shorts and there will be no reason to fix anything.

Tue, 10/15/2013 - 17:19 | 4057902 TaperProof
TaperProof's picture

So the mystery billion dollar gold seller, who sells $500m+ at once maybe made a mistake selling his gold? lol

Tue, 10/15/2013 - 17:20 | 4057911 zebra
zebra's picture

Is there any Fitch office in the US soil that NSA can harass?

 

Tue, 10/15/2013 - 18:22 | 4058175 Mototard at Large
Mototard at Large's picture

They can always have the CIA drone them.  Much easier than that messy harassment stuff.

Tue, 10/15/2013 - 17:22 | 4057916 Dr. Engali
Dr. Engali's picture

In order to prevent a downgrade the country must take on more debt instead of paying down any debt . What a screwed up system we have in place.

Tue, 10/15/2013 - 17:39 | 4057993 Landrew
Landrew's picture

I would agree, nothing these past, WELL 1st. Bush Jr. term make any sense to me. A series of wars against the wrong people, Clinton with NAFTA and Glass Steagall, O'Bummer bailing out every bank in the world and doing nothing on jobs for 6 fucking years! I have a small farm to run to. I wish the best of luck to you all. This is some crazy shit and I never in my wildest imagination would ever think I would use that phrase!   

Tue, 10/15/2013 - 17:27 | 4057935 The worst trader
The worst trader's picture

Bullish! Capt Ben to the rescue! Print more and pump. No worries at all mon.

Tue, 10/15/2013 - 17:29 | 4057944 HamRove
HamRove's picture

So....The US is about to be Fitchslapped?

Please, For the love of Jesus, Please! Don't do it!

Tue, 10/15/2013 - 17:32 | 4057964 PowerPlayer
PowerPlayer's picture

It is ridiculous that money market funds are scared to hold US treasuries, but they are still AAA rated.

Tue, 10/15/2013 - 17:34 | 4057966 jrpuffnstuff
jrpuffnstuff's picture

I'm pretty confident we are going to default for a short period... wonder what that will really affect?  Is this a testing ground?

Tue, 10/15/2013 - 17:34 | 4057968 RaceToTheBottom
RaceToTheBottom's picture

Tyler, Why the point about the agency being French?

Is it that no US firm would tell the truth?

Or some underlying anti French statement?

Tue, 10/15/2013 - 17:38 | 4057987 Winston Churchill
Winston Churchill's picture

The US based ones are leaned on in regards to the US rating.

S+P downgrades, and is the only agency sued by Holder over RMBS ratings fraud.

Wed, 10/16/2013 - 06:12 | 4059635 Analyse2
Analyse2's picture

You are right. One can fairly ask the question …

It's funny that S&P or Moody's are never mentioned as "American S&P" and "American Moody's"...

Is the "French" adjective employed to downgrade the competence of this rating agency ?

By being American, are the other two rating agencies any more credible ? ...

Moreover Fitch is as French as McDonald's is Mexican... but it's always fun to take a cheap shot at the French, isn't it ? 

Fitch Ratings Inc. is a jointly owned subsidiary of Hearst Corporation and FIMALAC SA.

Hearst Corporation is American.

On April 12, 2012, Hearst increased their stake in the Fitch Group to 50%.

Previously, Hearst owned a 40% stake in the company, while FIMALAC was the majority owner with 60% stake. Fitch Ratings and Fitch Solutions are part of the Fitch Group.

Moreover Fitch Ratings is dual-headquartered in New York, USA, and London, UK

http://en.wikipedia.org/wiki/Fitch_Group

Tue, 10/15/2013 - 17:40 | 4057991 lolmao500
lolmao500's picture

So... Fitch doesn't put the US on negative watch for all the fraud, massive deficits and leverage... but NOT DEFAULTING is a cause for negative watch? Lulz?

I bet if the deficit was cut to 0, the US would be downgraded to C or something like that... fucking ridiculous.

Tue, 10/15/2013 - 17:44 | 4058018 orangegeek
orangegeek's picture

A move down in the USD moves the Euro higher.

 

Here's why:

 

http://bullandbearmash.com/about/usd/

 

When the USD falls, the US market indexes typically move higher.  And this here is Ben's motive - on the phone with Fitch this afternoon to do whatever it takes to keep the US indexes up.

Tue, 10/15/2013 - 17:46 | 4058039 Big Ben
Big Ben's picture

Fitch to USA: "I fart in your general direction."

Fri, 10/18/2013 - 11:39 | 4068924 Analyse2
Analyse2's picture

Are you a troll ?

Tue, 10/15/2013 - 17:56 | 4058083 Anonymouse
Anonymouse's picture

A serious question.

Last time this happened it was a + for USD as it triggered risk off

But this time it seems to be a - for USD.

Is it just because my portfolio is positioned for + USD or is something different this time?

Tue, 10/15/2013 - 17:58 | 4058085 starman
starman's picture

if you fucking yenks dont raise that debt limit well then then then ah ..... lik the fuck I care just print up 17Trills and pay off that debt and lets move on to QE eternity

Tue, 10/15/2013 - 18:11 | 4058125 22winmag
22winmag's picture

Fuck you scummy, useless credit rating agencies.

 

They are the dingleberries of the financial world.

Tue, 10/15/2013 - 18:19 | 4058159 Squeezedshorts
Squeezedshorts's picture

I have fattened myself for the day of slaughter by extorting wealth from people around the globe. I have a very strong sense of entitlement because I can bully other nations with my big bazooka's. I am the USA.

Come at me Fitchez!!!

Tue, 10/15/2013 - 18:23 | 4058165 firstdivision
firstdivision's picture

So Fitch, how's France's rating going? Oh they're AAAA with a possible upgrade. Gee, you guys sure are good at ratings..

Wed, 10/16/2013 - 09:14 | 4059943 Analyse2
Analyse2's picture

Stupid

Tue, 10/15/2013 - 18:36 | 4058227 NoTTD
NoTTD's picture

Bullish.

Tue, 10/15/2013 - 18:42 | 4058238 q99x2
q99x2's picture

Our central bank has installed software into the US financial system and we no longer depend on ratings or earnings or any of that shit anymore. We're good.

Tue, 10/15/2013 - 18:40 | 4058245 surf0766
surf0766's picture

"Even if the debt limit is not raised before or shortly after 17 October, we assume there is sufficient political will and capacity to ensure that Treasury securities will continue to be honoured in full and on time."

 

 

Not if the intent is to cause the crash

Tue, 10/15/2013 - 18:44 | 4058263 chump666
chump666's picture

Going to very interesting to watch the Fed go all in on the short end if the ceiling is breached.  Most likely will start a crash (stocks), i'd also wtach Japan/China and Asia dump foreign bonds - more so USTs en masse.  The ECB/NY Fed swaps and funding also could blow out.  Quite serious either way as safe flows will be chaotic.  lol maybe buy French debt? hahahahah

 

 

 

Tue, 10/15/2013 - 18:50 | 4058277 surf0766
surf0766's picture

The Fed is a political arm. They will not go all in. This is their chance to own it all even though it will not be a technical default.

 

"For the good of the American people, we have come together today in a bi-partisian way to implement the new order of currency"

 

no eat your peas

Tue, 10/15/2013 - 18:51 | 4058280 robertocarlos
robertocarlos's picture

The Chinese should call a news conference, then put all their trillion dollars of US bonds in a pile and burn it on live TV.

Tue, 10/15/2013 - 19:00 | 4058310 razorthin
razorthin's picture

'Negative' because they have not raised the debt ceiling in a 'timely manner'.  Default aside, how about 'Negative' because they keep raising it??

Tue, 10/15/2013 - 19:22 | 4058390 DosZap
DosZap's picture

The Chinese should call a news conference, then put all their trillion dollars of US bonds in a pile and burn it on live TV.

 

Hell no, continue to buy Au,Ag, ANYTHING OF TRUE VALUE!!!!!!!!,use it till you use me UP!.

Tue, 10/15/2013 - 20:34 | 4058707 hairball48
hairball48's picture

All these rating agencies are full of shit...Imean Perto Rico's bonds are still rated as investment grade...albeit very low investment grade...when they are clearly JUNK. Fuck Fitch, S&P, et al

Tue, 10/15/2013 - 20:51 | 4058767 sethstorm
sethstorm's picture

How long until the US puts Fitch's existence on negative watch?

Thu, 01/02/2014 - 06:54 | 4292747 KaliGi
KaliGi's picture

Looks like the nationality of rating agencies affects their ratings

"The Home Bias in Sovereign Ratings"

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2370374

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