Seeking Alpha

S&P chastises U.S. over "political brinkmanship"

  • The U.S. will be downgraded to "selective default" (SD) if the debt ceiling isn't raised by mid-October and the governmnt fails to service a debt, says S&P, but there will be no change to the AA+ credit rating as long as the impasse is short-lived. "This sort of political brinkmanship is the dominant reason the rating is no longer AAA."
  • The story provides an opportunity to check on Treasurys amid the imminent government shutdown. The 10-year yield fell as low as 2.59% overnight, but has returned back to 2.61%, off one basis point on the session.
  • TLT -0.2%, TBT +0.4%.
  • Earlier: The Chicago PMI prints at 55.7 in September, beating expectations of 54.4 and prior of 53.
  • Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Comments (12)
  • Nitin B. Sharma
    , contributor
    Comments (161) | Send Message
     
    s&p using this situation as a way to justify their last downgrade. right in the middle of the justice department's lawsuit against them about that same downgrade. ooooh... :) gutsy, eh?
    30 Sep 2013, 03:29 PM Reply Like
  • bdy
    , contributor
    Comments (150) | Send Message
     
    Yeah good job out of them. werent they facing a law suit for the downgrade last year?
    30 Sep 2013, 04:05 PM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
     
    Sorry, it's not either AA+ or AAA paper, except very short term.
    1 Oct 2013, 08:55 AM Reply Like
  • TFCAB
    , contributor
    Comments (1957) | Send Message
     
    who anointed the S&P as arbiter of anything
    30 Sep 2013, 03:39 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (948) | Send Message
     
    It is gutsy of the S&P and I admire them for doing it.

     

    The justice department lawsuit shows just how much the government has become a mafia. The stalemate just how little congress (purposely small cap due to lack of respect) "serves" the people.

     

    S&P should be allowed to express whatever opinion it wishes without fear of reprisal from the government. Don't like the opinion, don't pay attention to it.
    30 Sep 2013, 03:52 PM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    Calling the Justice Department "a mafia" is irresponsible on your part. It simply undermines your credibility.
    30 Sep 2013, 04:02 PM Reply Like
  • Hammerhorn
    , contributor
    Comments (27) | Send Message
     
    I see a "mafia" as organized bullies. Does that not sound like the DOJ?
    1 Oct 2013, 01:25 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    AIP,
    To call the DOJ a "mafia" isn't that much of a stretch. It is funded with dollars taken by force, it offers protection from its own enforcement arm, it infringes on others freedoms to ensure its own sustainability, it plays by a different set of rules than everybody else, and it deals in illegal arms trade (see Fast & Furious).
    1 Oct 2013, 03:01 AM Reply Like
  • Hubert Biagi
    , contributor
    Comments (691) | Send Message
     
    Lol, S&P ratings? How about all those AAA ratings given to toxic mortgage securitizations, those financial weapons of mass destruction? Is S&P really going to now "chastise" anyone about anything?
    30 Sep 2013, 03:54 PM Reply Like
  • KJP712
    , contributor
    Comments (445) | Send Message
     
    I thought the S&P was a part of the government.
    30 Sep 2013, 04:34 PM Reply Like
  • taxman100
    , contributor
    Comments (261) | Send Message
     
    I cannot figure out who would want to own 30 year U.S. Treasury debt. In 30 years, either the currency will be greatly devalued, or U.S. credit will be so poorly rated that anyone holding one to maturity will lose their shirt either way.

     

    The current monetary system created after WWII will no longer exist in 30 years - what will take it's place is hard to tell.
    30 Sep 2013, 05:01 PM Reply Like
  • markrpat
    , contributor
    Comments (199) | Send Message
     
    SP (McGraw Hill)....naughty, naughty government. No more recess, go stand in a corner. Putting red ink on your books again...time for a teacher parent day.
    30 Sep 2013, 08:05 PM Reply Like
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