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My colleague Jo Moulds is watching, and provides some of the highlights: Moritz Kraemer of Standard & Poor's defended his firm's decision to cut the US credit rating, while still maintaining a AAA rating on several eurozone countries, such as Finland.
The chancellor has repeatedly justified the cuts as a reasonable response to unprecedented debt levels and the threat from credit ratings agencies to downgrade the UK's blue-chip AAA rating.
This signalled a "slightly greater than 50% chance" that Britain would lose its AAA rating with Fitch in the next two years.
A really good risk could be graded "AAA," and then it could be traded on the bond market!
David Riley of Fitch suggested that Scotland was unlikely to be granted a AAA rating if it won independence.
"In the past our assumption was interest would always be paid on time," says Steven Hess of Moody's, a ratings agency which has cautioned that even a brief default would cost America its coveted Aaa status.
Similar(8)
"As with some other major AAA-rated sovereigns, unless off-setting measures were adopted, the capacity of UK public finances to absorb adverse economic and financial shocks that would result in yet higher public debt while retaining its 'AAA' status has largely been exhausted," it said.
According to the European Spreadsheet Risk Group, spreadsheets were behind the collapse of the Jamaican banking system in the late 1990s, and their use was key in the development of collateralised debt obligations – the financial instruments that promised sub-prime mortgages could somehow become AAA-rated investments.
Was it "we have to invest $100mm somewhere and this gets 2bps more yield than other AAA-rated options"?
At the same time the spread between AAA-rated and lower-rated corporate bonds also widens, a sign that the supply of Treasuries has a broader effect on the price of safer assets.
Moody's Investors Service notes that, including what states owe, America's government debt will hit 100% of GDP in 2010, higher than other AAA-rated nations (see chart 3).
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