From CTV. I have to wonder why Dagong's assessment of American debt differs so much from the other agencies. I can't help but wonder, though, if Moody's and Standard and Poor's don't have a bit of a conflict of interest here; if the US dollar collapses those companies, which are US-based, have a lot more to lose. On the other hand, China would have a lot to lose if the dollar collapses too, so it's hard to say.
The dispute between Washington and Beijing about monetary policies and trade imbalances has spilled over into the more arcane world of debt ratings.
Citing concerns about Washington’s capacity to repay debt and the potential impact of another round of quantitative easing by the Federal Reserve, an unheralded Chinese bond rating agency has slashed its sovereign credit rating on U.S. government debt to the equivalent of single-A-plus from double-A, with a negative outlook.
The rebuke is mainly symbolic; the rating cut by Dagong Global Credit Rating Co. Ltd. will not have any impact on the market. But it is another sign of growing world anger over the U.S. decision to further loosen monetary policy and could be another indication the Chinese are becoming disenchanted with U.S. Treasury bonds.
Major mainstream rating agencies, such as Moody's Investors Service and Standard & Poor's, still give Washington their top, triple-A rating, despite also expressing concerns about soaring debt levels and record deficits.
Wednesday, November 10, 2010
China lowers US credit rating
This is interesting: