BofA predicts: Another US debt downgrade coming in 2 weeks

[Mom2ten]

http://www.businessinsider.com/huge-prediction-from-bofa-another-us-debt-downgrade-is-coming-in-just-a-few-weeks-2011-10

[Joseph The Carpenter]

I better get some extra dog food.:panic

[$teve]

Would of been a lot better if the author of that article referenced his source of information. BI is not one of the most credible sources of info imo. They are very sensationlist with often mediocre analysis, and credibility sometimes wanting. ZH is good though imo. But thanks for sharing anyway, its worth keeping an eye on! I did a little research and couldn't find it mentioned in any other MSM or news media. Btw the link isn't working in the OP so will cite it again here:


Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks (http://www.businessinsider.com/huge-prediction-from-bofa-another-us-debt-downgrade-is-coming-in-just-a-few-weeks-2011-10)


In an analyst note, Bofa/ML Ethan S. Harris drops a bit of a bombshell prediction:

We expect a moderate slowdown in the beginning of next year, as two small policy shocks—another debt downgrade and fiscal tightening—hit the economy. The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan. The committee is more divided than the overall Congress. Since the fall-back plan is sharp cuts in discretionary spending, the whole point of the Committee is to put taxes and entitlements on the table. However, all the Republican members have signed the Norquist “no taxes” pledge and with taxes off the table it is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts. The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.

This is quite a stunning prediction, mainly because nobody is talking about this. And though the experts were 100% wrong in thinking that a downgrade would increase borrowing costs, it did cause a major market jolt when it happened, leading to a major blow to confidence in August and September.

[Sydney Spider]

I better get some extra dog food.:panic

:lol2

[Raphael]

It could be true. Yesterday I saw a picture of Uncle Sam tacked to a telephone pole with the caption "Do not lend money to this man".

[araj54]

It could be true. Yesterday I saw a picture of Uncle Sam tacked to a telephone pole with the caption "Do not lend money to this man".

:pound :lol2

[Mom2ten]

It could be true. Yesterday I saw a picture of Uncle Sam tacked to a telephone pole with the caption "Do not lend money to this man".

:lol2 that was good

[$teve]

Now reported on Reuters...

U.S. rating likely to be downgraded again: Merrill (http://www.reuters.com/article/2011/10/23/us-usa-rating-merrill-idUSTRE79M2J120111023)


(Reuters) - The United States will likely suffer the loss of its triple-A credit rating from another major rating agency by the end of this year due to concerns over the deficit, Bank of America Merrill Lynch forecasts.

The trigger would be a likely failure by Congress to agree on a credible long-term plan to cut the U.S. deficit, the bank said in a research note published on Friday.

A second downgrade -- either from Moody's or Fitch -- would follow Standard & Poor's downgrade in August on concerns about the government's budget deficit and rising debt burden. A second loss of the country's top credit rating would be an additional blow to the sluggish U.S. economy, Merrill said.

"The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan" to cut the deficit, Merrill's North American economist, Ethan Harris, wrote in the report.

"Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes," he added.

[Mountain Girl]

This article is saying that another rating agency will downgrade the US, if I read it correctly. I wonder if they're referring to Moody's, and I wonder if this is based on info, or speculation.

In August, when Standard and Poor downgraded the US, they said they would possibly downgrade it again in less than three months. I'm sure they will, too, because nothing has changed since then.

[jn31675]

I think all heads of government...senators, govenors, majors, the Senate, the House, and the President should all get together for 15 minutes and do nothing except look at a HUGE TV screen showing the real time national debt clock. I doubt it would even take the full 15 minutes for them to get the point. It is getting very close to 14.9 trillion.