WAS “AA+;” NOW “AA”
by Sharon Rondeau
(Apr. 8, 2012) — On Thursday, Egan-Jones Ratings Company downgraded the U.S. credit rating from “AA+” to “AA.” Egan-Jones describes itself as “small, nimble, and very proud of our history of accuracy and value-added performance.”
Fox Business describes Egan-Jones as “among the major rating firms.” The company’s president, Sean Egan, reportedly said that there is “no end in sight to the increasing deficit” of the United States. Egan commented that the “rapid rise in debt to GDP” is a sign that the “underlying credit quality” of the U.S. is declining.
Egan-Jones appears to utilize stricter standards than larger rating companies. Other larger companies do not appear to have changed their U.S. credit ratings but are affirming “negative outlooks.”
During an interview, a reporter for Bloomberg stated that Egan-Jones does not supply its findings to the general public. Egan stated that his company is “independent” because it is “paid by institutional investors.”
In mid-February, Egan stated that the credit rating of the U.S. was declining following a credit downgrade from AAA to AA+ by major ratings companies last August. Egan stated that his company is “true to our investors.”
The credit rating reduction was announced the “worst weekly drop” in stocks during a single week this year.
Egan seems to have identified the historical reason for the fall of developed nations.
Argentina went into crisis and third world country status in 2001 for failure to bring their deficits under control, even after repeated warnings from the IMF and World Bank. The PIGS nations of Europe are following in Argentina’s footsteps. Greece, perhaps, has received it’s last and fatal “bailout”.
The United States is going down the very same road and the elected weasels are playing chicken, waiting to see who will be the first to propose cuts in government largess and save the country. Who will bet they don’t? And who is prepared for the scenario of America as part of the third world nation status?